Ward v. McKenzie

• Decision Date: 01 January 1870
• Parties: A. L. WARD v. K. MCKENZIE AND OTHERS.
• Court: Texas Supreme Court

33 Tex. 297

A. L. WARD

v.K. MCKENZIE AND OTHERS.

Supreme Court of Texas.

1870.

1. A non-resident creditor is entitled to avail himself in our courts of the remedy by attachment of lands in this state belonging to his debtor, although the debtor be himself a non-resident of this state. This right of non-resident creditors is not based on the principle of mere comity, when they are citizens of any of the states of the union; but is secured to them by that clause of the United States constitution which provides that “the citizens of each state shall be entitled to all the privileges and immunities of citizens in the several states.”

2. The jurisdiction which our courts acquire by an original attachment against a non-resident debtor is not dependent upon the character of the demand, but is conferred by the levy of the attachment upon his property.

3. A non-resident creditor who has recovered judgment in another state against his debtor, or who has otherwise a just demand against him, can maintain a suit in our courts to set aside a voluntary conveyance of land in this state, made by his insolvent debtor, and to subject such land to the payment of his demand; and it is not necessary that a creditor shall, before assailing such a conveyance for fraud, recover judgment in a court of this state upon his demand. (Denison, J., dissenting.)

4. It is competent in our courts, by reason of their mixed and plenary legal and equitable powers, for a creditor to maintain a single action against his debtor and his debtor's grantee of land under a fraudulent conveyance; and in such suit to obtain service by attachment of the land if the defendants are non-residents of the state; and in one and the same judgment to recover upon his demand against his debtor and set aside the fraudulent conveyance, with decree for sale of the land to satisfy the demand. (Denison, J., dissenting.)

5. In a suit of the character just indicated, it was not error to exclude the testimony of the debtor and his wife, offered by the debtor's grantee and co-defendant, for the purpose of proving a valid consideration for the conveyance. The ruling in the case of Rogers & Oliver v. Patterson, 31 Tex. 605, that a party to the record is not a competent witness for his co-suitor, referred to and approved.

6. See opinion of Denison, justice, for the reasons assigned by him for dissenting from the principal rulings of the majority of the court.

ERROR from Colorado. Tried below before the Hon. I. B. McFarland.

This case presents questions of importance, both as principles of law and as matters of practice. The most material facts are clearly stated in the opinion of the majority of the court, delivered by Mr. Justice Lindsay; but in view of the dissenting opinion of Mr. Justice Denison, it is proper to relate certain other matters not adverted to in the opinion of the majority.

The defendant, Samuel Ward, at his first appearance in the cause, on the first of November, 1859, excepted to the jurisdiction, because it appeared by the petition that all the parties to the suit, both plaintiffs and defendants, were non-residents of the state. But he also filed at the same time exceptions to the petition in the nature of special demurrers, together with a motion to quash the attachment, and with an answer on the merits, alleging a full and adequate consideration for the conveyance to A. L. Ward.

At the same date, the defendant A. L. Ward, filed general exceptions to the petition, for insufficiency, accompanied by an answer, setting up the same consideration for the conveyance which was alleged by his father and co-defendant, Samuel Ward.

And, also, on the same day, the defendant Hughes, describing himself as a citizen of New York, appeared to the suit, and moved to quash the attachment, besides excepting to the petition on special causes of insufficiency, and then proceeding with an answer to the merits, disclaiming any beneficial interest in the land, but setting up that he held it in trust for his co-defendant, A. L. Ward, alleging that the conveyance to him by A. L. Ward was without the knowledge or privity of Samuel Ward, and solely superinduced by considerations of prudence, specifically detailed, wholly disconnected from the pecuniary liabilities of Samuel Ward.

At that and the succeeding spring term, 1860, general continuances are entered, and there is no further notice of the cause until October, 1865, when it was again continued.

Nothing further of consequence was done until the spring term, 1868, when the plaintiffs amended and alleged that, notwithstanding the conveyance to A. L. Ward, and from him to Hughes, the land in question had all the time been and still was the property of Samuel Ward, and those conveyances were fraudulent contrivances to screen it from his creditors, and especially from the plaintiffs, who had been such creditors ever since 1849; that at the time the conveyances were made Samuel Ward was notoriously insolvent, and that fact was well known to all the defendants; and that certain notes of one Bowie, alleged by Samuel and A. L. Ward as the consideration paid by the latter to the former for the land, were not the property of A. L. Ward, but belonged to Samuel Ward, if they had any existence at all.

At this same term the plaintiffs filed exceptions to the depositions of Samuel Ward and Lucy A. Ward, his wife, which had been taken in behalf of A. L. Ward, and which seemed to be very material to his defense, as going far towards proving a full consideration paid by him to his father for the land in question. Besides exceptions to the manner in which the depositions were taken and returned, the plaintiffs objected on the further ground that by one of the answers it appeared that A. L. Ward was present at the taking of the depositions; but in these exceptions the competency of the witnesses was not called in question. At the trial, however, the depositions were objected to on the score of their incompetency as witnesses, and were excluded by the court on that ground; to which the defendants duly excepted.

At the fall term, 1868, A. L. Ward pleaded in reconvention, claiming damages for the wrongful suing out of the attachment and consequent depreciation of his title, and for his outlays, etc. The plaintiffs filed exceptions to this plea in reconvention, and the plea was stricken out.

At the same term the defendants renewed their motions to quash the attachment, alleging as an additional ground that the attachment bond was void for want of seal or scroll. The plaintiffs excepted to this motion, because it was filed without leave of the court, because the original motion waived the defect in the bond, and because no sufficient notice of the motion had been given.

On the twenty-second of September, 1868, the cause seems to have come on for trial, and there is an entry that on that day the exceptions of the defendants to the jurisdiction of the court, and also their demurrers to the petition, were overruled, and that the depositions of Samuel Ward and wife were excluded; to all which the defendants excepted.

The next day the jury returned a verdict against Samuel Ward for $11,885.16, and that the land described in the petition was liable for the debt; whereupon, the court rendered judgment against Samuel Ward for that sum, and decreed that the deed to A. L. Ward and his deed to Hughes be canceled and annulled, and that the land be sold to satisfy the plaintiff's debt. Neither in the judgment and decree, nor any where preceding it, does any order quashing the attachment appear; but immediately following it, and as of the same date as the judgment, an entry appears, giving only the style of the case, with the words “attachment quashed” appended.

It has not been deemed necessary to insert the charges given and refused, because the rulings of this court are not predicated on those charges, but on the questions raised on the whole record.

The case is brought up by A. L. Ward upon writ of error.

J. T. Harcourt and W. H. Goddard, for plaintiff in error. It is confidently asserted that the plaintiffs below could not contest the conveyances to A. L. Ward and Hughes--could have no right to drag them and their title into suit, until after having recovered a judgment in this state against Samuel Ward, and thereby obtained a lien on the land in dispute. As a legal proposition, this is almost too plain for argument.

The word, “creditors,” as used in our statute of frauds and fraudulent conveyances, has the same signification that it has in all statutes in pari materia, from that of 13 Elizabeth down to that enacted in the last state admitted into the union, and this signification has long been settled by the highest authority. “Voluntary conveyances cannot be set aside, except by creditors who have reduced their debts to judgment before the death of the party, for until that time they constitute no lien on the land.” Story, Eq. § 375, and note on p. 40. “A creditor must have completed his title at law, by judgment and execution, before he can question the disposition of the debtor's property.” * * * “Until he has established his title he has no right to interfere.” * * * “Unless he has a certain claim upon the property of the debtor he has no concern with his frauds.” Wiggins et al. v. Armstrong et al. 12 Johns. Ch. 144.

It would be idle to multiply authorities. The principle is too clearly established to be disputed, that it is not creditors at large, but creditors who have a lien or claim upon the specific property, who are entitled to attack their debtor's conveyance of it as fraudulent.

The case at bar is virtually a proceeding on the part of the plaintiffs, as between them and A. L. Ward, to try the right of property in this land; and how can a creditor try the right of property, with his debtor's vendee, upon the bare allegation that the vendor is his debtor, and before he has himself acquired any right or claim to the property in...