Davis v. Sittig

Citations

• 65 Tex. 497
• 1886 Tex. LEXIS 696

Syllabus

<p>1. Promissory note—Illegal consideration—Assignment without endorsement— Such assignee takes subject to all defenses against original payee—Notice —Estoppel — Fraud on creditors — Maker of note may plead fraud, THOUGH a participant—October 23, 1877, L., being largely indebted to one Walthew and divers other persons, and being insolvent, made to B., with intent to defraud his creditors, a pretended sale and conveyance of his entire interest in his deceased parents’ estates, which were then being administered in the probate court of Galveston county by B., the executor. This interest was the only property or property rights possessed by L. At the same time B., who was fully apprised of L.’s purpose, in pursuance of an agreement between them, and in order to give the transaction the appearance of a bona fide sale, executed to L. his promissory note for §5,000, payable January 1, 1883, bearing eight per cent, interest, and expressing as its consideration a transfer of L.’s interest in his deceased parents’ estates. The deed from L. to B. recited the note, and was duly recorded in the records of deeds of Galveston county. It was distinctly understood, at the time, between L. and B. that no property was to pass by the conveyance; that the note was never to be enforced against B., and that D. was to incur no liability by reason of its execution. In 1882 the estates were partitioned amongst L. and the other legatees, and, shortly thereafter, the portion allotted to L., consisting of realty, was sold under execution, to satisfy Walthew’s claim, which had been reduced to judgment, Walthew becoming the purchaser. This property, which proved insufficient to satisfy Walthew’s claim, was subsequently adjudged to him by decree of the district court. The note was in form negotiable, but was never endorsed. On May 25, 1880, L. having, in the meantime, lost the note, transferred and assigned his interest therein, by a separate writing, to his brother,, who, in like manner, transfe