# T~XAA'ITORNEYGENERAL OF TEXAS
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### T-e 78711

JCBBN L. EllLL *TroRN~ GENEmAL July 30. 1974

The Honorable Tom Hanna Criminal District Attorney Jefferson County P.0. Box 252 3 Beaumont, Texas 77704 Opinion No. H- 358
Re: Rights ofpurchaser at an execution sale based on avoid judgment.
Dear Mr.. Hanna:

You have requested our opinion as to the rights of one who purcha.ses real property at a sheriff’s sale based ona void judgment. Inconnection with your request we have received from an interested party amemorandum with attachments which indicates that the facts you have presented tous are subject todispute and may ultimately have to be resolved in litigation. Itis not the function ofthis office to resolve factual questions. This opinion is based onthe facts that you have presented tous, butit does not represent any determination on our part as to the accuracy of these facts.

You state that in a criminal bond forfeiture proceeding the county obtained ajudgment against a defendant andhis sureties in the amount ofthirty five thousand dollars. This judgment was void as to the sureties because process was never served onthem. Nevertheless, onthe basis ofthejudgment, execution was levied onsome real property belonging to one ofthe sureties. An execution sale was conducted by the sheriff, and the property was purchased for five hundred dollars which amount was paid over to the county in partial satisfaction ofthejudgment.

Subsequent to the execution sale thejudgment was reversed by the Court of Criminal Appeals on the ground that the State had failed to tender the required judgment nisi into evidence. Purkey.v. State, 494 S.W. 2d 541, No. 45, 862 (Tex. Crim. App., May 16, 1973). The case was later retried and a judgment was again entered against the sureties. This judgment has since

ps 1685The Honorable Tom Hanna page 2 (H-358)

been satisfied in full by the sureties. You ask us to assume that the original judgment was void and then ask what are the rights ofa purchaser with respect tothe property purchased at a sheriff’s sale ona.void judgment.
The general rule is that an execution sale based upon ajudgment which is notvoid but merely erroneous will be sustained if the purchaser is a stranger to thejudgment. Thus, when the purchaser at an execution sale is someone other that thejudgment creditor and is acting in good faith, his title to the property inquestion will not be disturbed’ or affected by a subsequent reversal ofthejudgment. Stroud v. Casey, 25 Tex. 740 (1860); Texas Co. v. Dunlap, 41S.W. 2d42 (Tex. Comm. App., 1931); Glaze v. Johnson, 65 S.W. 662 (Tex. Civ. App.1901, writ ref.); and Cordray v. Neuhaus, 61S.W. 415 (Tex. Civ. App. 1901, writ ref.).

A different rule is applicable, however, when thejudgment upon which an execution sale is based is void. Inthis situation a purchaser at the sale, even though bona fide and not thejudgment creditor, obtains no title in the property purportedly sold and furthermore has no cause ofaction against thejudgment debtor for the purchase price paid. This principle was first established in Texas in Stegall v. Huff, 54 Tex. 193 (1881). Stegall had purchased real property belonging to Huff at a sheriff’s sale based onavoid judgment. The judgment was void because the record indicated that process was never properly served upon Huff. Stegall was a stranger to thejudgment and abona fide purchaser. Nevertheless the Supreme Court held that, because thejudgment was void, the sale under it did natdivest Huff oftitle to -his land. Inaddition the **Court** held that Huffwas under no obligation to reimburse the innocent purchaser because otherwise Huff might indirectly be forced to pay an indebtedness which he did not owe. Stegall, supra at 197. See also Flanary v. Wade, 113 S.W. 8 (Tex. 1908), Houston Ice and Brewing Co. v. Stratton, 89 S.W. 1111(Tex. Civ. App., 1905, nowrit), and Texas Co. .v. Dunlap, 21S.W. 2d 707 (Tex. Civ. App., Waco, 1929), affirmed 41S.W. 2d42 (Tex. Comm. App. 1931).

p. 1686The Honorable ,Tom Hanna page 3 (H-358)

**.:** The principle established in Stegall plainly controls the fact situation you have presented to us. The surety whose property was sold at an execution sale based on avoid judgment’has not been divested ofhis title to that property. The purchaser at the sale, though entirely innocent, has no **cause** ofaction against the surety for the purchase price he paid to the sheriff because otherwise the surety might beforced to pay a debt he did not owe. Inshort the purchaser must look elsewhere for relief from his predicament.

/ Ordinarily, in resolving the claim ofan execution sale purchaser

against ajudgment creditor for reimbursement ofpurchase money, Texas courts apply the doctrine of caveat emptor, holding that neither thejudgment creditor nor the sheriff may be held responsible for afailure oftitle to property purchased at a sheriff.‘8 sale. Even though the purchaser obtains nothing for his money, he is not entitled to recover the purchase. price from them. Russell v. Sarkeys, 286 F. 2d 736 (5th Cir. 1961); The purchaser, however, is permitted toassume the posture ofthejudgment creditor and pursue whatever claims the creditor has remaining against thejudgment debtor. Rosenthal and Desberger v. Mounts, 130 S.W. 192 (Tex. Civ. App., 1910, nowrit). Subrogation would be ofno avail tothe purchaser in the fact situation you have described. The original judgment was void and the second judgment has been fully satisfied. The county no longer has any claims against the defendant and the sureties which could be pursued by the purchaser inan effort to get back his money;

However, where equitable considerations dictate otherwise, the caveat emptor doctrine is not applied inflexibly. For instance, in Stock v. Hartgraves, 236 S.W. 2d 257, 258 (Tex. Civ. App. *San Antonio, 1951, writ ref.), the court rejected a strict application ofthe caveat emptor doctrine and stated that in circumstances where thejudgment creditor had already been satisfied in full “nothing would be more unjust than for the purchaser at avoid execution sale to receive nothing for the money he pays but the holder ofthejtdgment be permitted to retain that money in satisfaction ofhis judgment. ” See also Estes v. Doty, 90 S.W. 2d 754, 756 (Term. 1936); Danner v. Murnan, 178 N.W. 987 (S.D. 1920); and

p. 1687The Honorable Tom Hanna page 4 (H-358)

Schwinger v. Hickok, 53 N.Y. 280 (1873).

Inthe fact situation you have posited, thejudgment creditor, i.e., the county, in effect has been paid twice. The county’s judgment against the defendant and his sureties has been satisfied infull, and in addition it has received the money paid by the purchaser at the execution sale based upon avoid judgment. The purchaser onthe other hand has received nothing for his money. Inthese circumstances it is our opinion that, in accordance with the equitable principles we have outlined, the **courts** would find the **caveat** emptor doctrine inapplicable and would require the county to repay the purchase money to the purchaser.
SUMMARY
When thejudgment upon which an execution sale is based is void, a purchaser at the sale obtains no title,in the property and has no cause ofaction against thejudgment debtor for the purchase price paid. Ordinarily the doctrine of caveat emptor would preclude the purchaser who finds himself inthis situation from recovering his purchase money from the judgment creditor. Butwhere thejudgment creditor has in effect been paid twice,~,courts would as a matter of equity require him to repay the purchase money to the.purchaser.

APPRb&D: ery truly yours,

Attorney General of,

v-- -‘- DAVID M. KENDALL, Chairman Opinion Committee Texas

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