Rivera v. White, Guardian

On the 28th day of October, 1897, plaintiff in error, who resided in Chicago, conveyed the land in controversy to his sister, the wife of Harry L. White, one of defendants in error, who resided in Texas, by a deed reciting the payment of "one dollars and other considerations." In fact, there was no consideration, but the property was conveyed upon an agreement that Mrs. White should hold it in trust for plaintiff for the purpose of avoiding a claim for alimony which plaintiff feared his wife, who had sued him in Illinois for a divorce, would make against him. Mrs. White also agreed to sell the property for plaintiff's benefit or reconvey it to him. The divorce was granted in April, 1898, but there is no evidence that any claim for alimony was ever set up or allowed, or that facts existed entitling the plaintiff's wife to such an allowance. Mrs. White died without having reconveyed the land, leaving her husband and some minor children surviving her. White executed to plaintiff a release of all claim to the land and plaintiff brought this action against the minor children, joining White as their guardian, to recover the property. A recovery was denied him in the District Court and Court of Civil Appeals, the latter court basing its decision upon the proposition that the deed was binding upon him and that the trust could not be enforced because of his intent, with which the deed was made, to defraud his wife of her alimony.

There could be no doubt of the correctness of this holding if it appeared that the wife had a well-founded claim for alimony against her husband at the time the deed was made. It is held that such a claim constitutes the wife a creditor entitled to protection under the statute of frauds (Lott v. Kaiser, 61 Tex. 665 [61 Tex. 665]); and it is well settled in this court that deeds made in fraud of creditors pass title as between the parties to them, and that agreements on the part of grantees to hold in trust and to reconvey will not be enforced. Eastham v. Roundtree, 56 Tex. 110 [56 Tex. 110]. But it does not appear in the case before us that there was any creditor whose rights or interests could be prejudiced by the conveyance, and the question is, whether or not the mere motive which impelled the party to make the deed will preclude him from enforcing the trust upon which it was executed.

There are some authorities which decide this question in the affirmative, and with these the Court of Civil Appeals agreed. Tantum v. Miller, 11 N.J. Eq. 551; Jackson v. Dutton, 3 Harr. (Del.), 98; Fletcher v. Fletcher, 2 MacArthur (D.C.), 38. There is an intimation of Judge Moore in Cameron v. Romele, 53 Tex. 243 [53 Tex. 243], tending in the same direction, but the decision was based upon another point and that now before us was not determined.

Other authorities, with better reason, we think, hold that where there is no creditor there is no fraud, and therefore no policy of the law to prevent the enforcement of the trust. Brady v. Elison, 2 Hayw. (N.C.), 348; Smith v. Bowen, Id., 296; Kervick v. Mitchell, 68 Iowa 273; Day v. Lown, 51 Iowa 364; O'Conner v. Ward, 60 Miss. 1027. See also Vandever's Admr., v. Freeman,20 Tex. 333.

The statute of frauds, for the protection of creditors, makes void all conveyances of property made by their debtors with intent to defraud them, and, in order to carry out its policy and deter debtors from such attempts to put their property beyond the reach of creditors and, at the same time, secure to themselves the enjoyment of it by secret arrangements with those to whom it is apparently conveyed, the statute makes such conveyances valid and binding between the parties; and courts, in furtherance of this policy, refuse to give any relief against such conveyances and to enforce any agreements or trusts growing out of them. But the statute applies only to conveyances made by debtors, and it is therefore only to these that such consequences should attach. The statute does not prohibit conveyances by persons who are not indebted, and no policy of the law is thwarted by a mere motive which can not work injury to creditors. Ellis v. Valentine, 65 Tex. 547. The motive with which such a conveyance is made and the fears by which it is prompted are of no importance unless there are creditors to be protected by the statute. When the statute does not apply to the case, there is nothing to prevent the court from enforcing the rights of the parties as they are fixed by their agreements. That a conveyance upon a trust, such as that shown by the evidence, constitutes the cestui que trust the equitable owner of the property is not to be disputed, unless the motive with which the deed is made vitiates the trust; and, we think, the law has no concern with the futile intent to protect the property from a claim which its owner fears may be asserted against him, but which is never asserted and does not exist. The law of this State does not entitle the wife, suing for divorce, to alimony as a matter of course, and there is no evidence that the law in Illinois is different. Rev. Stats., art. 2896; Wright v. Wright, 6 Tex. 29. The facts of the case are, therefore, not such as to preclude plaintiff from enforcing the trust upon which the conveyance was made.

The judgments of the District Court and the Court of Civil Appeals will be reversed and judgment will be here rendered for the plaintiff for the land. But, as the defendants are minors and their guardian has made only such defense as he was bound to make, the costs of the suit will be adjudged against the plaintiff.

Reversed and rendered for plaintiff in error.