Houghton & Robinson v. Rice

FISHER, Chief Justice. Opinion.—This action was by appellants, in the form of trespass to try title, against appellee, to recover a tract of land situated in McCulloch County. Appellee for answer pleaded in abatement that he was insane at the time of the filing of this suit and was then insane, and was in such condition more than four years previous to the bringing of the suit. He also pleaded general demurrer, general denial and not guilty, and specially answered that appellants’ claim the land by virtue of a seeriff’s sale made October 2, 1894, under execution issued on a judgment rendered in favor of the State National Bank as plaintiff against appellee and C. G. Prude as principals and appellants as endorsers; that about January 1, 1892, appellee became insane and has been insane ever since; that during all that time W. R. Rice, appellee’s brother, managed appellee’s business affairs for him, all of which was well known to the officers of the State National Bank, appellants and their attorney, F. M. Newman, Esq., and would have been known to them had they used ordinary diligence; that W. R. Rice left McCulloch County on a business trip to the Indian Territory about April 3, 1894, where he stayed till late in September that year, when he was informed that the property of John N. Rice in McCulloch County was about to be sold under execution; that immediately upon receiving such notice, W. R. Rice left for home in McCulloch County, traveling with all possible speed, but found the property sold upon his arrival in McCulloch County; that the officers of the State National Bank, appellants and their attorney, F. M. Newman, Esq., at the time of the issuance of execution, levy and sale, well knew, and by the exercise of ordinary diligence could have known, that at the time of the issuance of execution, levy and sale appellee was insane and that said W. R. Rice was managing appellee’s business affairs and was absent from McCulloch County and State of Texas, and that there was no one in said county at the time to protect the interest of appellee; but that said bank and appellants, for the purpose of harassing and defraud *564 ing appellee, and that appellants might buy the land greatly below their value, caused said execution to be issued and levy and sale made at a time when appellee was insane and there was no one to protect his rights, which they did by buying $2925 worth of property for $685; that appellants paid no value for said lands, but caused the amount of their bid to be credited on the execution; that the lands could have been sold for treble the amount they brought had appellee been represented upon such sale; and asked that the sale of the land be set aside and that appellee recover the land in controversy. The court below rendered judgment to the effect that appellants take nothing by their suit and that appellee recover from the appellants the land in controversy and costs. We find that appellee was common source of title, and that the State Rational Bank, October 9, 1885, recovered judgment against appellee and one C. G. Prude as principals and appellants as endorsers on a note, with judgment over in favor of appellants for the amount they were required to pay under said judgment. On October 30, 1885, this judgment was transferred by the bank to appellants. Appellants caused to be issued an execution on this judgment, and the same was levied upon the land in controversy by the sheriff of McCulloch County and the land sold to appellants for the sum of $685. The property at the time was reasonably worth the sum of about $2925. The appellee, at the time of the sale, was insane, and that fact was known to the agent and attorney of the appellants. W. R. Rice, a brother of appellee, was the business agent and manager of the property of his insane brother, and was at the time of the sale and previous thereto absent from the county of McCulloch and then in the Indian Territory. Appellants at the purchase of the property under the execution sale paid nothing of' value therefor, as the consideration for said purchase was credited upon the judgment, then owned by appellants. The real question in the case is whether the insanity of appellee at the time of sale, with knowledge thereof upon the part of appellants, coupled with the inadequacy of the consideration in the purchase of the lands, were grounds sufficient upon which -to authorize the court below to set aside the execution sale. There is no attack made in this case upon the validity of the judgment under which the sale was made. It is doubtful if a sale of property of an insane person under execution to one who has knowledge of that fact, under our statutes that regulate the administration of estates of insane persons, can be held valid for any purpose; but, under the facts of this case, this is a question that is not required to be decided, for we are of the opinion that a sale-under execution, to a purchaser for an inadequate consideration, of the property of an insane person, with knowledge of such insanity, and who credits his bid upon his judgment, may be set aside in a proceeding instituted for that purpose. Alexander v. Haskins, 68 Iowa, 74. The answer of the appellee was in effect a direct attack upon the sale to the appellants upon the ground alleged, and it was not bringing into *565 controversy collaterally that sale, as claimed hy the appellants. Therefore, in an attack of this character upon the sale, it may be set aside upon grounds that show it to be voidable, as we hold to be the case here: Judgment affirmed. Warren W. Moore, for appellants, moved for a rehearing on the following grounds: 1. Because this court erred in its decision in holding that an execution sale, to a purchaser for an inadequate consideration, of the property of an insane person, who had knowledge of such insanity, and who credits his bid upon the judgment, may be set aside, in a suit of trespass to try title by the purchaser, at the instance of such insane person, as defendant, upon an answer setting up such facts, because such facts render the said execution sale voidable and such an answer is a direct and not a collateral attack upon such execution sale. Such holding is in direct conflict with the decisions of the Supreme Court in the cases of Haskins v. Wallet, 63 Texas, 218, and Smith v. Perkins, 81 Texas, 157. 2. Because this court erred in its finding of fact that appellants purchased the land in controversy for $685, because the price paid at the execution sale was $729.33, the court having ignored the sum of $44.33 costs, paid in addition to the sum $685. 3. Because this court erred in holding that the purchase of land of the value of $2590.50, at an execution sale for $685 (or for $729.33 if this court should reform its finding of fact in accordance with the facts as stated in the foregoing paragraph), and crediting such latter sum upon the jndgment by the purchaser was a purchase for an inadequate consideration. 4. Because this court erred in its finding of fact that appellants had knowledge of the insanity of appellee when they levied the execution and purchased the land in controversy at the sale thereunder, or at the time of the levy, or at the time of the sale, because there is absolutely no testimony upon which to base such finding.