Freybe v. Tiernan

GAIEES, Associate Justice. This suit was brought by appellant to recover of appellee Teirnan, as sheriff of Galveston County, and the sureties on his official bond, damages for the seizure of a stock of goods, in which she claimed an interest. The goods were levied upon by virtue of a writ of attachment in favor of E. R. Singleton against Charles A. — 289 — Freybe, the son of appellant. Tiernan answered among other things that the plaintiff in the attachment suit had given him an indemnity bond, and prayed that he and his sureties on that bond be "made parties defendant. Singleton and his sureties appeared and answered, and upon the trial before a jury there was a verdict and judgment for the defendants. The facts which gave rise to the suit are as follows: Charles A. Freybe, in 1877, being then about nineteen years old, and having had his disabilities of minority removed, borrowed of his mother, the appellant, the sum of $2500, and with it purchased a half interest in a business then conducted by Singleton. He subsequently bought all of Singleton’s interest in the business and gave him his note for the purchase money. At the time of the loan from his mother he executed no written evidence of debt; but at a later date, and after some partial payments had been made, executed to her his promissory note for $2200 for the balance then due. On the 23d day of December, 1887, being unable to meet his obligations, and being indebted to Ullman, Lewis & Oo. and to Adoue & Lobit as well as his mother, he conveyed to them jointly all his stock of merchandise and certain other personal property in full satisfaction of their claims. It was after this sale that the writ of attachment was levied. The property was sold by the sheriff under the order of the court, and the proceeds were divided between the plaintiff in attachment, Ullman, Lewis & Go., and Adoue & Lobit, from which it would seem that Singleton did not contest the title of these firms to their respective interests in the property. Singleton and his sureties, in their answer to the present suit, alleged that the debt for which an interest in the goods was transferred to Mrs. Freybe was fictitious, and that therefore the sale to her was fraudulent. The testimony of Mrs. Freybe, who was examined on her own behalf, and that of her son, who testified for the defendants, leaves no doubt that the money was lent by her to her son as she claims, and that there remained due upon that particular transaction at the time of the sale the sum of $2195, the amount recited in the bill of sale as the consideration of the conveyance to her. But during the cross-examination of Mrs. Freybe it was disclosed that during the year 1875 her father-in-law in Germany gave her $1800 or $2000 in German money—the German dollar being worth 70 cents of our money. The testimony does not make it clear whether this was given to her alone or to her and to her children. But in the charge of the court it was disregarded and seems to have been treated as a gift to her for her own use. It was further disclosed by her testimony that in the year 1884 she collected in Germany, from her deceased father-in-law’s estate, $1800 or $2000 in German money. In one place she testified that this money was inherited by her children, and in another that it belonged to her and her children as heirs of her deceased father-in-law. She further testified that she was in moderate circumstances; that while she had considerable property she was largely in debt, — 290 — and that she had spent her son’s portion of the money in his maintenance and education. Under this state of case the court first charged the jury, in effect, that if at the time of the sale of the property in controversy Mrs. Freybe was indebted to her son on account of the money received by her-in Germany in 1884, and that she failed to give him credit therefor on her claim against him for the borrowed money, that they should find for defandants, and then proceeded to give the following further instruction: “In determining whether Mrs. Olympia Freybe was indebted to her son for moneys for which he should have had credit on her claim against him, you can not take into consideration any expenses she may have incurred for his maintenance, support, or education during his minority. Parents can not use the money or estate of their children to aid in their raising without the Probate Court authorizes them by special order, and there is no evidence that any such order was made.” In giving the instruction the court evidently acted upon the theory that the only method by which a mother can establish a debt against her child for expenses incurred on account of his maintenance and education is by means of the procedure in the County Court provided by our statutes in relation to guardians and wards. • In this view of the law we do not concur. There are cases in which equity recognizes the claim of the mother .against her child for reimbursement for expenditures made on account of Ms support and education; and our courts being courts of equity as well as law, we see no reason why such claim should not be sustained in any ■case in our courts, when under the evidence adduced a court of equity would have held it valid. At common law, it is the duty of the father to support his minor children, and upon the death of the father that duty devolves upon t-lie widowed mother. If, however, her means are limited and the children have means of their own, their maintenance and education becomes a proper charge against their OAvn estate. Mawbray v. Mawbray, 64 Ill., 383; Wilkes v. Rogers, 6 Johns., 566; Heyword v. Cuthbert, 4 Dev. Eq., 443. It is a sound principle that the corpus of the estate of an infant should not be entrenched upon for his support and education so lo,ng as the income is sufficient for that purpose; but it is held that Avhen the means of the parent are not ample, expenditures by the parent for the support and education of the minor child may be made a charge upon the body of the estate, provided it be so small that the income is wholly inadequate for the purpose. In Re Bostwick, 6 Johns. Ch., 100; Osborne v. Van Horne, 6 Fla., 360. The evidence upon the question of the mother’s ability to support and educate her children, and upon that of the amount of the expenditures made by her on her son’s account, was not very satisfactory; but we think it sufficient to go to the jury, and to have demanded a charge in accord — 291 — .anee with the principles announced. The charge under consideration was erroneous, and requires a reversal of the judgment. It is submitted that “the court erred in refusing to give charge Ho. 2 asked by plaintiff, which was as follows: 'Whether or not any lawful claim existed or exists in favor of Charles Freybe against the plaintiff on account of any money received by her in Germany in 1884, and whether or not any lawful claim existed or exists in favor of the plaintiff against Charles Freybe on account of the support, education, and maintenance of said Charles by plaintiff, and whether or not upon an inquiry into and offsetting of the said claim of the one against the said claim of the other, the balance, if any found, should be in favor of the plaintiff or of the said Charles, are all questions with which you have nothing to do in this case, and you are instructed not to consider them/” In support of the assignments relating to this ruling, it is insisted that the pleadings of defendants were not sufficient to admit evidence of the defense that at the date of the bill of sale C. A. Freybe had an offset against his mother which was not credited upon his debt, and that “said pleadings charged only that said debt, for the payment of which said bill of sale was made, was fictitious, had no existence in fact, and that the parties to said bill of sale had combined to defraud the creditors of C. A. Freybe, but in no way apprised plaintiff that defendants relied as a defense upon showing a counter-claim in favor of C. A. Freybe against the plaintiff.” We think, however, it would be a dangerous rule that would require a creditor who attacks a conveyance of his debtor for fraud to state with exactness and particularity the circumstances in which the fraud consists. Transactions of such a character are usually conducted secretly, and the details are known only to the parties immediately concerned. The allegation in the answer that the debt was ficticious we think was sufficient to admit evidence to show that it was in part unreal, and thereby to establish the fraudulent nature of the conveyance. It is also assigned that the court erred in refusing to give the following instruction as requested by appellant: “If the jury believe from the evidence that 0. A. Freybe was indebted to his mother, the plaintiff, after deducting the sum she may have owed him, if any, [in an amount] reasonably equal to the value of the goods sold by him to her, then you are instructed that the plaintiff is entitled to recover the value of the goods so sold to her at the time of their seizure under the writ of attachment.” We think the charge involves a legal proposition which, as applied to every case of like character, is unsound, but that it was probably sufficient to have called the attention of the court to a phase of the case upon which an instruction should have been given. We are of the opinion that when an insolvent debtor transfers to a creditor property in satisfac — 292 — tion of the debt, and in the conveyance overstates the amount of the indebtedness which purports to be extinguished by the transfer, such false statement, in the absence of some satisfactory explanation, should be held conclusive evidence of fraud. Its evident purpose is to obviate any question as to whether the value of the property exceeds the amount of the debt, and it is inconsistent with fair dealing. It was so held at the last term at Tyler in an opinion by the commission which was adopted by this court. Brasher v. Jemison, 75 Texas, 139. On the other hand, when a creditor accepts from his debtor property in satisfaction of his debt, and the value of the property is more than is fairly sufficient to discharge the obligation, we think the transaction fraudulent in law, whether the taking of the excess was intentional or not. The right of an insolvent debtor to prefer his creditor by a transfer of property to satisfy the debt is limited strictly to a conveyance of so much only as is reasonably necessary for that purpose. The unpreferred creditors are entitled to subject any surplus that may remain after satisfying such debts as the debtor may determine to prefer, and hence any appropriation by way of preference of more property than is reasonably sufficient to pay the preferred debt is a necessary infringement upon the rights of those who are not preferred. As long as the conveyance is recognized as valid, its inevitable result is to remove the excess beyond the reach of the other creditors, and the parties to the transaction are not permitted to say that they did not intend the necessary consequence of their action. This is the principle of the rule, and it is also supported by sound policy. When an insolvent debtor prefers a creditor he should be required to do it with strict regard to the rights of other creditors. A hope .should not be held out that an excessive transfer may be explained by parol evidence. To permit this would be to encourage fictitious transfers under the guise of preferences and to promote fraud. But the question which is presented by the phase of the case now under consideration is, should the amount of the debt recited in the conveyance as its consideration be overstated, not intentionally but on account of a mistake of fact or law, and should at the same time the value of the property conveyed not exceed the amount of the actual indebtedness, ought the transaction to be held fraudulent? We think not. In such a case there is neither an actual intent to defraud nor is there legal fraud resulting from a transfer of more property than is sufficient to pay the debt. We think the court should have charged the jury in accordance with the law as here announced. We do not concur in the proposition urged by appellee that a mere acquiescence of 0. A. Freybe in the appropriation of his money by his mother, and his failure to demand it, should under the circumstances be considered a discharge of the debt. His acquiescence is proper to be — 293 — looked to as evidence in determining whether his mother owed him anything on account of the money received in Germany or not, but it should have no other effect. We deem it unnecessary to consider the other questions presented. For the errors indicated, the judgment is reversed and the cause remanded. Reversed and remanded. Delivered February 25, 1890.