Texas Nat. Bank of Beaumont v. Edson

WALKER, Chief Justice. August 10, 1931, E. G. Edson, as a deed of gift, conveyed to his wife, Eleanor W. Edson, the following described property, of the reasonable market value, on the date of the conveyance, of $30,000: J.ots 3, 4, and 5, in Block 485 of the city of Houston, S.S.B.B., Harris' County, Texas. This deed was filed for record in the deed records of Harris county October 13, 1931. On the date Mr. Edson deeded this property to his wife there was against it 'a lien to secure an indebtedness of Mr. Edson in the sum of $17,500, which Mrs. Edson paid out of her separate estate between the dates March 24, 1932, and November 21, 1934. On October 5, 1933, appellant recovered judgment against E. G. Edson in the district court of Jefferson county for the sum of $38,042.49, which was the balance due on certain notes executed by Mr. Edson to appellant prior to August 1, 1931. On January 18, 1937, this judgment was abstracted in the abstract judgment records of Harris county, showing a balance due on the judgment of $31,849.75, also on the 18th day of January, 1937, appellant abstracted a second judgment against Mr. Edson for the sum of $37,104.-74. On the 19th day of November, 1936, E. G. Edson filed his voluntary petition in bankruptcy; and appellant duly filed its claim in the bankruptcy proceedings. On December 5, 1936, J. Zorn was elected trustee in bankruptcy for the Edson estate, and was discharged as trustee on the 19th day of May, 1937. Edson filed his petition for discharge in bankruptcy on the 31st day of November, 1936, which was granted on the 20th day of June, 1938, over appellant’s objections. During the pendency of the controversy over Edson’s discharge in bankruptcy, appellant never at any g time took any action calculated to render its claim of a lien on the property in question justiciable in the bankruptcy court. No formal demand was made upon the trustee in bankruptcy to take or attempt to take possession of such property, nor was any action of any kind taken by appellant regarding this property. This suit was filed by appellant in the district court of Jefferson county against appellees, Mrs. Eleanor W. Edson and her husband, E. G. Edson, pleading the execution of the deed by Edson to his wife; its judgment against Edson and the abstracting of these judgments; and quoting from the petition, “That the deed from E. G. Edson to Mrs. Eleanor W. Edson, being a deed of gift as hereinbefore alleged, ■and having been executed and delivered at the time when E. G. Edson was insolvent and without sufficient property within the State of Texas subject to execution to pay his existing creditors, sam.e was therefore void under Article 3997 [Vernon’s Ann. Civ. St.], and the legal and equitable title to said property at all times re [259] mained in the defendant, E. G. Edson, and under and by virtue of the recording and indexing of said abstract of judgment, a valid, binding and subsisting lien was created upon said property, and plaintiff is entitled to have same established and foreclosed”; the Edson bankruptcy proceedings; the appointment of the trustee in bankruptcy; and his failure to claim the property in controversy as a part of the assets of the Edson estate. The prayer was that the deed from E. G. Edson to his wife “be decreed void and set aside, canceled and held for naught and that plaintiff’s lien created by virtue of said abstracts of judgment be established and foreclosed and that'the property be ordered sold as under execution.” Appellees answered by general and special demurrers, general denial, and specially that by reason of the bankruptcy proceedings against Edson and his discharge therein, appellant acquired no lien against the property in controversy. They also specially plead the several statutes of limitations. On trial to the court without- a jury, judgment was against appellant that it take nothing, and in favor of appellees that they go hence without day and recover their costs, from which appellant has duly prosecuted its appeal to this court. In support of its judgment, the trial court filed conclusions of fact and law, from which we have taken the facts summarized above. The court further found that on August 10, 1931, the date E. G. Ed-son conveyed the property in controversy to his wife, he was solvent and that this deed “was valid under the provisions of Article 3997 of the Revised Civil Statutes, and that said E. G. Edson was at the date of such conveyance and at the date of its recordation in Harris County, Texas, to-wit: On August 10, 1931 and October 13, 1931, possessed of property within the State of Texas subject to execution sufficient to pay his existing debts.” The court also found in favor of appellees on the issue of four years limitation and- “that the filing of the abstract of judgment herein in Harris County, Texas after November 20, 1936, the date upon which E. G. Edson was adjudicated a bankrupt, did not fix a judgment lien upon the property here involved.” We affirm the trial court’s conclusion that E. G. Edson was solvent on August 10, 1931, the date he executed the deed in controversy to his wife. The evidence raised the issue that on December 31, 1930, E. G. Edson owned the following property, of the reasonable market value indicated: Cash in Banks. $ 6,800.00 Stock — The B. F. Goodrich Co. 650 shares. 13,000.00 “ The Texas Corporation 750 shares. 24,750.00 Stock — Equity with Brokers. 25,000.00 “ Various N. Y. Stock Exchange, listed. 100,000.00 “ and Bonds, Miscellaneous. 100,000.00 $ 269,550.00 Stock — The Wilson Holding Company. 603,000.00 “ The Edson Realty Company. 357,000.00 $ 960,000.00 Notes Receivable .1. 43,000.00 Mortgage note Receivable. 3,500.00 ' 46,500.00 Real Estate — Houston, Texas. 56,500.00 “ “ Kansas City, Mo. 6,500.00 “ “ Kaplen, Texas .■. 5,000.00 “ “ Beaumont, Texas . 38,000.00 “ “ Eleanor Apartments & Property. 65,000.00 “ “ Residence and Furniture. 35,000.00 $ 206,000.00 Personal Jewelry, Etc 20,000.00 Automobiles (5) . 5,000.00 $ 25,000.00 $1,507,050.00 [260] The evidence also raised the issue that on. February 1, 1932, E. G. Edson owned the following property, of the market value indicated: Cash in Banks. $ 2,000.00 New York Stocks. 65,000.00 Miscellaneous Stocks & Bonds. 57,000.00 Stock — The Wilson Holding Company 603,000.00 Stock — The Edson Realty Company... 175,000.00 $ 902,000.00 Notes Receivable . 46,500.00 Real Estate: Kansas City. 6,500.00 Houston . 10,000.00 Beaumont. 35,000.00 Eleanor Apartments ... 65,000.00 Residence and Furniture 35,000.00 141,500.00 Total Assets $1,090,000.00 The Wilson Holding Company and the Edson Realty Company are Texas corporations. It would serve no useful purpose to review the testimony on the issues of the ownership of this property and of its value. Certain witnesses testified that this property belonged to E. G. Edson, and that its reasonable cash market value was the several sums indicated. The trial was to the court without a jury and he accepted as true their testimony. Appellant’s construction of the testimony is to the effect that on the date the deed was executed by Edson to his wife, and on the date that deed was recorded, E. G. Ed-son owed debts to the amount of $563,823.-80, and a further liability in a certain receivership proceeding of $100,000. On the statement made, E. G. Edson owned property of the reasonable market value, on December 31, 1930, of $1,507,050, and on February 1, 1932, of $1,090,000, against an indebtedness as claimed by appellant of $563,823.80. We think the court’s finding that E. G. Edson was solvent on the 10th day of August, 1931, does not contravene in any way the following statement of the law announced by our Supreme Court in Walker v. Loring, 89 Tex., 668, 36 S.W. 246, 247: “It does not mean that the conveyance is valid if the property, at a fair market value, is sufficient to cover the debts. Nor does it mean that it is enough merely that the property, if discovered, is subject to levy and sale. But it means that he must retain property of which he has the open and visible ownership of such value that when subjected to forced sale it will yield a sufficient sum to pay all the existing debts as well as the taxable costs of their collection.” On this conclusion, the judgment of the lower court must be affirmed; so, we pretermit a discussion of appellant’s assignments against the court’s conclusion “that the filing of the abstract of judgment herein in Harris County, Texas after November 20, 1936, the date'upon which E. G. Edson was adjudicated a bankrupt, did not fix a judgment lien upon the property here involved” — in our judgment this conclusion is a correct construction of the facts of this case on this issue. We also pretermit a discussion of the finding in favor of appellees on the limitation issue. The judgment of the lower court should be in all things affirmed, and it is accordingly so ordered. Affirmed.