Not being able to agree with my Associates. I hereby file the following dissenting opinion:
On November 5, 1927, and prior thereto, G. B. Gillespie and wife were indebted to appellants, Williams Chastain, in the sum of $561. On said date appellants sued the Gillespies on their indebtedness and obtained a writ of attachment against their property, which was levied upon the seven bales of cotton in controversy as the property of the Gillespies. Appellee, W. E. Laird, made claim to said cotton by affidavit and claim bond, and a trial of the right of property in said seven bales of cotton was had before a jury. The verdict of the jury being favorable to appellee, judgment was rendered accordingly, from which judgment appellants have duly appealed and present the record here for review.
This is the second appeal in said cause, the first being reported in 13 S.W.2d 944.
Under their first four propositions, appellants contend, in effect, that the court should have instructed a verdict in their favor as they requested; that a creditor may purchase from his insolvent debtor property sufficient to satisfy his debt, but that if such creditor purchases from his insolvent debtor property materially in excess in value of the creditor's debt and he pays over to said insolvent debtor the remainder of the excess value after satisfying his own debt, in cash *Page 508 or negotiable paper to use and dispose of as such debtor may see fit, regardless of the intent with which the debtor conveys such property and regardless of the intent with which the creditor receives such property and pays the excess value into the hands of the insolvent debtor, and such transaction is in law fraudulent and void, neither such creditor nor debtor will be heard to say such deal was made in good faith and no fraud was intended.
The record shows that G. B. Gillespie and wife were wholly and notoriously insolvent, and that appellee, W. E. Laird, knew said parties were so insolvent. The Gillespies were indebted to appellee Laird in the sum of $350, and they were also indebted to appellants, Williams Chastain, in the sum of $561. On November 5, 1927, appellants filed suit against Gillespie and wife and sued out and had levied an original writ of attachment on seven bales of cotton as the property of Gillespie and wife. On the same day, and a few hours before said attachment was levied, appellee, W. E. Laird, purchased ten bales of cotton, including said seven bales, from Mrs. Gillespie, his sister. The purchase price of said cotton was $1,051.35. Appellee paid himself by deducting the $350, the amount the Gillespies owed him, and gave to Mrs. Gillespie his check, payable to her order, for $701.35, the remainder of the purchase price of the cotton. Said negotiable check was delivered by appellee to the said Mrs. Gillespie without any conditions or restrictions as to the appropriation of the proceeds of said check. Appellee testified as follows:
"The reason I bought more cotton than just enough to pay my debt is because of the conversation I had with Mr. Wade. Mr. Wade represented the loan company that had loaned money on this Gillespie farm. He was agent for the company that made the loan and he was in after me about the interest on that loan. I had no interest in the place out there, only an interest that I did not want my sister to lose the place. I didn't owe Wade anything. I wasn't personally obligated to pay Wade anything, only I had told him that I would use my influence in every way to see that he got the money out of this cotton on the interest on the loan. Then after I had this conversation with Mr. Wade I went out and bought this cotton. * * *"
Appellee testified further:
"This is the check. It is for $701.35. I did not have any agreement with her (Mrs. Gillespie) that she was to hold this check. The money was there in the bank to take care of that check. I had the money in the bank at any time to cover that check. I expected Mrs. Gillespie to cash the check if she wanted to. I told her to cash the check. She asked me about it and I says, `Go ahead and cash the check.' She says, `I am afraid if I cash the check they will garnishee it' She told me that was the reason she didn't cash the check. She told me that after they had already attached the cotton. I don't know just when it was, but it was sometime the next week after the cotton was attached. To make a collection was one reason I bought the cotton and the other reason was to place the money to the loan company. That is the reason I went and bought the cotton, so Mrs. Gillespie would pay the interest on the loan that she owed on her farm and satisfy Mr. Wade. * * * I testified yesterday as to why I went out there to buy this cotton; one was to collect my debt and the other was to pay the interest on this loan against the place. As to whether or not I went direct from talking to Tom Wade directly to my sister's, I must have gone out there pretty quickly. I don't remember just how long it was after my conversation with Tom Wade that I went out there."
Mrs. Gillespie testified:
"I was afraid Williams Chastain would try to get this money for this check, because they had attached the cotton and if I cashed the check I was afraid they would try to get it. That is the reason I never attempted to cash the check and never went to the bank to see anything about it."
Appellee testified further, in substance, that when he gave his sister the check for $701.35 he did not give it to her "with any strings on it"; that he expected her to cash the check; that after he found out she had not cashed the check, he then redeemed it by paying off some debts. The record shows appellee paid the interest on the loan in the total amount of $512. He paid this on February 6, 1928. He paid $138.44 taxes on the farm on January 30, 1928. He paid an annuity for $50 on December 31, 1927, and another annuity for $100. All of these amounts appellee testified he paid for Gillespie and wife and in this way redeemed the check for $701.35. Mrs. Gillespie held said check from November 5, 1927, until about February 6. 1928, until appellee had paid the debts above, and then returned said check to appellee. All of the above facts are established without controversy.
The appellee, Laird, had the right to purchase an amount of said cotton reasonably sufficient to satisfy his own debt against the Gillespies of $350, but he did not have the right to purchase three times the amount necessary to satisfy his own debt, and use his said excessive purchase to defeat appellants' in the collection of their demand. At the price appellee paid for the cotton, three bales would have been almost, if not entirely, sufficient to satisfy his debt of $350. Why did he buy the whole ten bales? Appellee, Laird, repeatedly answered this question to the effect that he had two reasons, one was to *Page 509 collect his own debt, and the other was to enable his sister to pay the excess to the loan company. Appellee testified he was in no way liable to the loan company. The loan company had a lien on the farm, but none on the cotton which appellee bought. Appellee not only bought three times as much cotton as was necessary to satisfy his own claim, but gave his sister a negotiable check for the remainder, $701.35, which enabled Mrs. Gillespie, if this transaction is allowed to stand, not only to hinder and delay appellants in the collection of their debt, but to defeat their attachment proceeding altogether, and to place the remainder of said cotton or its proceeds beyond the reach of all creditors. Appellee testified, in substance, that he bought the excess cotton and gave his sister the negotiable check therefor to enable her to pay said money to the loan company, and later, when he learned she had not cashed the check, appellee, some three months after he gave his sister said $701.35 check, "redeemed" same by paying the claim of the loan company, and other amounts sufficient to absorb the 8701.35 check, and then Mrs. Gillespie turned back to appellee his said check. There can be no doubt from this record but that appellee bought the excess in amount of said cotton either for the purpose of enabling his sister to appropriate said excess as she saw fit, or for the purpose of having said excess applied to debts exclusive of appellants' debt; and in either event, the result of said transaction was to hinder and delay appellants and other creditors in the collection of their debt, and was therefore, as to appellants, fraudulent and void in law. Elser v. Graber, 69 Tex. 222, 6 S.W. 560; Armstrong v. Elliott, 20 Tex. Civ. App. 41, 48 S.W. 605, 49 S.W. 635; Seligson Co. v. Brown Brown, 61 Tex. 180; Oppenheimer v. Halff et al.,68 Tex. 409, 4 S.W. 562; Black v. Vaughan, 70 Tex. 47, 7 S.W. 604; Willis et al. v. Yates (Tex. Sup.) 12 S.W. 232; Williams v. Moore,6 Tex. Civ. App. 340, 25 S.W. 1010; Coughran v. Edmondson, 106 Tex. 540,172 S.W. 1106, 1108; Paddock et al. v. Jackson, 16 Tex. Civ. App. 655,41 S.W. 700, 702; Stevens v. Cobern, 109 Tex. 574, 213 S.W. 925; Houston Nat. Exchange Bank v. Mennis (Tex.Civ.App.) 243 S.W. 689; Watson v. Schultz (Tex.Civ.App.) 208 S.W. 958; Guaranty State Bank, etc., v. Maxwell et al. (Tex.Civ.App.) 15 S.W.2d 659; Oppenheimer v. Guckenheimer, 39 Fla. 617, 23 So. 9; First Nat'l Bank v. Fry et al.,216 Mo. 24, 115 S.W. 439, 443; John Deere Co. v. Sullivan, 158 Mo. 440,59 S.W. 1005; Seger et al. v. Thomas et al., 107 Mo. 635, 18 S.W. 33. These propositions, it is thought, should be sustained. But further, under other propositions, appellants contend there was no evidence that appellee at the time he bought the cotton agreed to pay any debts of the Gillespies. It is thought this proposition should be sustained. There is no evidence whatever of any agreement or understanding had between appellee and Mrs. Gillespie at the time the cotton was bought, and the check given, to the effect that either one of them would pay any debts, or see that the proceeds of said check were applied to the payment of any debts. There is no evidence that appellee in the early part of 1927 or any other time agreed to pay any of the debts of the Gillespies. The above being true, the sale of said cotton to appellee was void as against creditors as a matter of law and the intention with which such sale was made became immaterial. The parties cannot perform an act which the law denounces as fraudulent, and say that such act was done in good faith, with no fraudulent intent. Elser v. Graber, 69 Tex. 222, 6 S.W. 560; Seligson v. Brown, 61 Tex. 180; Black v. Vaughan, 70 Tex. 47. 7 S.W. 604; Stevens v. Cobern, 109 Tex. 574, 213 S.W. 925; Watson v. Schultz (Tex.Civ.App.) 208 S.W. 958. The sale of said cotton by Mrs. Gillespie to appellee on the terms and under the circumstances above set out was in law fraudulent and void as to other creditors, and especially as to appellants, notwithstanding the finding of the jury to the effect that Mrs. Gillespie did not intend to delay, hinder, or defraud appellants in the collection of their debt. Such was the necessary result of said transaction.
Under other propositions appellants contend further that the court erred in submitting to the jury the question of whether at the time the cotton was sold by Mrs. Gillespie to appellee Laird, "it was understood between the parties that the said W. E. Laird was obligated to see that the debts of the Gillespies were paid to an amount equal to the difference between the amount owed by the Gillespies to Laird and the value of the cotton in question." Appellants excepted to said charge because there was neither pleading nor evidence tending to raise such issue. The record shows that Mrs. Gillespie and appellee, Laird, were the only parties and witnesses to the sale of the cotton. They both testified as to what was said and done, and neither of them claimed that any understanding or agreement was had that in any way bound or obligated Laird to assume or pay any debt or debts of either of the Gillespies. Laird did not agree to assume and become liable for such interest, but turned such excess over into the hands of his sister and told her to cash the check which he thought she would do, and had done, until he got a statement from his bank of his account which showed that such check had not been cashed. This was some time after November 5, 1927. It will thus be seen the manner in which the cotton was handled not only enabled the Gillespies to convert into money the cotton, which was subject to appellant's attachment, but placed such money in the hands of the Gillespies where neither the appellants nor *Page 510 the loan company nor any other creditor could subject it to their indebtednesses. None of the creditors of the Gillespies could have sued appellee because he had not made himself liable for their debts. It thus clearly appears that appellee did not by distinct agreement at the time of the sale bind and obligate himself in any form or manner to apply, or to see that the excess in the value of the cotton was applied to the creditors of the Gillespies, but expected Mrs. Gillespie to cash the check, and when he found out that she had not cashed the check for fear appellants would garnish the money, he then went, in February, three months after the levy of appellants' attachment, and paid off some debts to redeem his check. It is thought this action on his part could not give validity to the sale of the property made on November 5, 1927, which it is thought clearly was fraudulent and void, in its entirety, as to appellants and other creditors of the Gillespies. Oppenheimer v. Halff,68 Tex. 409, 4 S.W. 562, 564; Elser v. Graber, 69 Tex. 222, 6 S.W. 560, 564.
As said by our Supreme Court in the first case cited above:
"The law gives to the creditor sufficient protection when it allows him to acquire an honest preference by the purchase of property from the debtor in good faith in payment of the sum due him; and, when the right to do this is made the pretext to place beyond the reach of other creditors property legally subject to their claims, and not necessary to the payment of his, the law will not undertake, in an entire transaction, to separate the valid from the invalid, but the whole transaction, as to other creditors, will be held invalid."
It is thought these propositions should be sustained.
Under other propositions appellants also complain of the action of the court as follows: While appellee was testifying he was asked by his counsel in reference to a conversation between himself, T. S. Wade, and Mrs. Gillespie, which took place early in the year 1927 long before the attachment was levied, to which conversation appellants objected because same was immaterial, irrelevant, incompetent, and hearsay as to any issue involved in this case, which objection the court overruled and permitted the witness to state, in substance, that early in the year 1927, about nine or ten months before the attachment was levied upon the cotton, he had a conversation with T. S. Wade, agent of the loan company, in which it was agreed between him (T. S. Wade), the witness, and the Gillespies, that the money from the cotton crop to be raised by the Gillespies during the year 1927 should go on the payment of the interest then past due on the loan on the farm. The alleged conversation, it is thought, was immaterial and inadmissible for any purpose. It was not had at the time the cotton was sold by Mrs. Gillespie to appellee, but, if at all, was in the early part of the year 1927, some ten months before the cotton was attached. If such agreement was made, as appellants were not parties to it and had no notice of its existence, their rights could in no, way be affected thereby. If made at all, it could at most only have been in the nature of a verbal chattel mortgage, of which appellants had no notice until long after their attachment lien attached to the cotton levied upon, and it is thought if such verbal agreement was made, it created no obligation upon the part of anyone. As I view the case, all the evidence without dispute shows affirmatively that the excess value of the cotton in the sum of $701, in the form of a negotiable check, was, at the very time of the sale and as a part thereof, without any restrictions as to the use of same, delivered to Mrs. Gillespie, thus placing the $701, the excess value of said cotton, beyond the reach of all creditors and by reason of which the sale of said cotton to appellee, at the time same was made, was in law fraudulent and void as to all creditors, appellants' attachment lien on said seven bales of cotton arose at once on the levy of said writ. Elser v. Graber, 69 Tex. 222, 6 S.W. 560; Oppenheimer v. Halff, 69 Tex. 409, 4 S.W. 562; Seligson v. Brown, 61 Tex. 180; Black v. Vaughan, 70 Tex. 47, 7 S.W. 604; Stevens v. Cobern, 109 Tex. 574,213 S.W. 925; Halff v. Goldfrank (Tex.Civ.App.) 49 S.W. 1095 (writ refused); Guaranty State Bank v. Maxwell (Tex.Civ.App.) 15 S.W.2d 659. And if a sale is found to be fraudulent in part, it will be deemed fraudulent in toto and set aside. Elser v. Graber, 69 Tex. 222, 6 S.W. 560; Lambeth v. McClinton, 65 Tex. 108; Black v. Vaughan, 70 Tex. 47,7 S.W. 604; and said sale of the cotton being in law fraudulent and void at the time it was made, and appellants' attachment lien having at once attached, the subsequent efforts of appellee to have the excess value of the cotton two or three months later applied to debts other than appellants' could in no way validate said sale or invalidate appellants' attachment lien. The rights of the parties were fixed under the facts existing at the time the levy was made.
It is thought appellants were entitled to recover, and that this case should be reversed and rendered for appellants. *Page 511