Hoeser v. Kraeka , 29 Tex. 450 ( 1867 )

Willie, J.

It appears very clearly from the evidence in this case that the conveyance from plaintiff in error to Mrs. Kraeka, was made in fraud of creditors; it was, therefore, void as to them. The only question for our consideration is, can it be enforced by the grantee against the fraudulent grantor?

Our statute of frauds declares such instruments void only as to the parties whose rights may be prejudiced thereby; and it has frequently been held under this statute, that against the grantor, and those claiming under him with notice of the fraud, such conveyances are valid and binding. (Danzy v. Smith, 4 Tex., 411; McLenny v. Floyd, 10 Tex., 166; Robinson v. Martel, 11 Tex., 155; Epperson v. Young, 8 Tex., 135.) And such has been the ruling of other courts upon statutes similar to our own. (7 Johns., 163; 4 Bibb, 65; 8 Porter, 351.)

But it is said, that whilst the law will respect such contracts, where they have been executed by a delivery of the property conveyed, yet it will not lend its assistance to compel a specific performance of such as are merely executory, it being a maxim of the law that in pari delicto potior est conditio defendentis. That in this case no actual delivery of the property conveyed ever took place; that possession remained with the grantor after the conveyance was made, and that the process of the law cannot now be invoked to compel him to deliver it up.

• There can be no doubt but that the payment of the purchase-money, the delivery of the property, the making and delivery of the deed, and the registration of it as required hy law, would have rendered this conveyance an executed contract. That the purchase-money was paid, and the possession of the articles conveyed given to the grantee, is stated in the deed and acknowledged therein by the grantor himself; and it is also manifest, that the deed was executed, delivered, and recorded according to the forms of the law. It cannot be urged by the grantor, under such circumstances, that no consideration was paid, and no actual transfer of possession made, for the purpose of impeaching the validity of the instrument. The enforcement of such conveyances at the suit of the grantee was doubtless intended as a punishment to the fraudulent grantor for his iniquitous attempt to avoid the payment of his just debts. To allow him to set up the two principal badges of fraud above mentioned, in avoidance of his conveyance, would be to permit him to escape this penalty in almost every instance. He cannot say to the creditor that the property belongs to the grantee, having been purchased by him for a valuable consideration, and that the purchaser holds a regular deed of conveyance therefor, executed, delivered, and recorded, and at the same time say to the grantee, that the deed was fraudulent, that no consideration actually passed, no delivery really took place, and that these facts were merely acknowledged for the purpose of putting the property beyond the reach of creditors.

The question as to how far the courts will go in enforeeing a fraudulent conveyance between the parties thereto, and those claiming under them, has frequently undergone judicial decision in England and America; and it has universally been held, that wherever the conveyance was completed, either by the actual or constructive delivery of the property, the grantee was entitled to recover, though the grantor was in possession of the property at the commencement of the suit, and had been continuously so from the date of the conveyance. And it has been further held, that if the transfer was by deed it would be binding, though no consideration was paid and no possession given. (Chitty on Cont., 362.) As far back as Yelverton’s Reports it was held to be law, that if A grant his goods to B in fraud of creditors, and afterwards die, B could recover the goods from A’s administrator, on the ground, among others, that the deed was void only as against creditors, but that it remained good as against the party himself and his executors and administrators. (Harvey v. Leader, Yelv., 196.)

The right of the grantee to recover rests upon stronger grounds, if possible, where, in addition to an execution and delivery of the deed, a registration of it has taken place; for at least, so far as conveyances purporting to be voluntary are concerned, the statute has made registration tantamount to a delivery of the property. (Lewis v. Castleman, Galveston T., 1864,) [27 Tex., 415.]

In accordance with the doctrine announced in the present opinion are the cases of Danzey v. Smith’s Adm’r., 4 Tex., 411, and Epperson v. Young, 8 Tex., 135. In neither of these cases was there any consideration paid or any actual delivery of the property conveyed, and in the latter the suit was brought by the^fraudulent grantee against the fraudulent grantor in possession. In both the fraudulent conveyance was enforced between the parties.

In the case of Rochelle v. Harrison, 8 Port., 351, the supreme court of Alabama went further, and enforced a fraudulent conveyance of slaves-at the suit of the vendee, where there was no consideration given, no instrument of writing evidencing the conveyance, and no actual delivery, but a mere written acknowledgment of the grantor that he held the slaves as a hirer from the grantee.

Whilst we do not decide that there are no cases in which the courts will refuse to enforce a fraudulent conveyance against the vendor in possession at the suit of his vendee, we think that the one now under consideration was properly sustained under the facts and circumstances proved upon the trial.

The verdict of the jury does not find the separate value of each article recovered, but the aggregate value of the whole. This was erroneous, as was decided in the case of Blakely v. Duncan, 4 Tex., 185. The defendant should have the privilege of returning any one or more of the articles recovered, instead of paying its value, and vice versa; but this would be denied him unless the separate value of each article was found.

The charge of the court, authorizing the jury to find more than the value of the properly, in order to insure its return, was erroneous, as has already been decided at this term in the case of Benson v. Pait.^* We are unable to determine whether it did or not have any effect upon the finding of the jury in this case, as the value placed by the jury upon each article sued for is not stated in the verdict. The erroneous charge, however, may have influenced them in estimating the price at which the appellants might retain some one or more of the articles, and is therefore an error which is itself fatal to the judgment.

For this error, and the failure of the jury to find the separate value of each article recovered, the judgment is reversed, and the cause Remanded.

* The record of this case was not furnished to the Reporter.