Case Name: CURTIS SHARP CUSTOM HOMES, INC. and Curtis Sharp, Appellants, v. Jo Ann GLOVER and David Gene Glover, Appellees
Court: Texas Courts of Appeals
Jurisdiction: Texas
Decision Date: 1985-11-04
Citations: 701 S.W.2d 24
Docket Number: No. 05-84-00455-CV
Parties: CURTIS SHARP CUSTOM HOMES, INC. and Curtis Sharp, Appellants, v. Jo Ann GLOVER and David Gene Glover, Appellees.
Judges: GUITTARD, C.J., and STEPHENS, VANCE, ALLEN, WHITHAM, MALO-NEY, HOWELL, McCLUNG and ZIMMER-MANN, JJ., join in the majority opinion.
Reporter: South Western Reporter Second Series
Volume: 701
Pages: 24–32

Head Matter:
CURTIS SHARP CUSTOM HOMES, INC. and Curtis Sharp, Appellants, v. Jo Ann GLOVER and David Gene Glover, Appellees.
No. 05-84-00455-CV.
Court of Appeals of Texas, Dallas.
Nov. 4, 1985.
Rehearing Denied Dec. 13, 1985.
Talmage Boston Payne & Vendig, Dallas, for appellants.
David L. Sherwood, Dallas, for appellees.

Opinion:
DEVANY, Justice.
Jo Ann Glover, one of the appellees, was employed by Curtis Sharp Custom Homes, Inc., and Curtis Sharp, appellants ("Sharp"), as a secretary and bookkeeper, beginning in January, 1980. It is alleged that she embezzled over $70,000.00 from Sharp during the course of her employment. Jo Ann Glover was convicted of that crime and Sharp later filed a civil suit against her and her husband, David Gene Glover, the other appellee. The court gave judgment to Sharp for $70,786.00, and, apparently, found that $5,004.31 of those embezzled funds were used to pay for improvements to the previously existing homestead property owned by the Glovers. We say "apparently" because there was no specific finding recited in the judgment that this is so. As part of that civil judgment, the court granted Sharp an "equitable lien" in the amount of $5,004.31 against "Jo Ann Glover's undivided half interest in the Glover homestead," but also held that Sharp take nothing against David Glover. No appeal was taken from that judgment, hence, it must be considered final. Subsequent to that judgment, Sharp demanded payment from the Glovers, but they refused to pay. Thereafter, Sharp filed the present suit to foreclose the equitable lien against Jo Ann's undivided one-half interest in the homestead. Each side filed a motion for summary judgment. On February 2, 1984, the trial court issued summary judgment for the Glovers, ruling that the equitable lien granted in the first lawsuit could not be foreclosed. We affirm.
In a single point of error, Sharp contends that its equitable lien can be foreclosed against Jo Ann's homestead interest. We disagree. The court in Smith v. Green, 243 S.W. 1006, 1007 (Tex.Civ.App.—Amarillo 1922, no writ), stated the fundamental principle that:
The Constitution (article 16, § 50) protects the homestead against forced sale for the payment of all debts except for purchase money, taxes and improvements, and provides that no lien on the homestead shall be valid except it be created for such character of debt, and provides that the lien to secure a debt for improvements must be created in a particular manner; otherwise it cannot exist. (Emphasis added.)
In the instant case, the embezzled funds were property which Sharp was deprived of and which, by judicial decree, resulted in a personal judgment and a purported equitable lien against Jo Ann Glover's previously acquired interest in the homestead property to the extent of $5,004.31. Since the purported equitable lien was imposed by judicial decree, we must examine the jurisdiction of the trial court in that case over the subject matter, to-wit: the homestead, in view of the language of the constitution. TEX.CONST. art. XVI, § 50.
In 1951, this court stated "that a forced sale of the homestead in satisfaction of a debt of any character except as provided by the Constitution . is void." Cline v. Henry, 239 S.W.2d 205, 208 (Tex.Civ.App.—Dallas 1951, writ ref'd n.r.e.). The court in that case went so far as to state that a lien created by judicial decree against a homestead was void. Cline, 239 S.W.2d at 208.
We distinguish the cases cited by Sharp from the instant case. In none of those cases was a lien imposed upon a previously existing homestead and then allowed to be foreclosed against the homestead property. Taking these cases in chronological order, we find a common underlying principle used by the courts in arriving at the results. The cases we refer to are: Smith v. Green, 243 S.W. 1006 (Tex.Civ.App.—Amarillo 1922, writ ref'd); First State Bank of Ellinger v. Zelesky, 262 S.W. 190 (Tex.Civ.App.—Galveston 1924, no writ); Meyers v. Baylor University in Waco, 6 S.W.2d 393 (Tex.Civ.App.—Dallas 1928, writ ref'd); and Bush v. Gaffney, 84 S.W.2d 759 (Tex.Civ.App.—San Antonio 1935, no writ).
In Smith v. Green, the wrongfully used partnership funds were used for improvements on the homestead which the married couple continued to occupy. When they exchanged the homestead for another, they received a new homestead plus $11,500.00 in cash which they deposited into a bank. The court's rationale permitted the imposition of a constructive trust which allowed the court to follow the trust property through its mutations into its changed form which was the bank deposit of $11,-500.00, not the new homestead.
In Ellinger, the husband embezzled funds which he used in part to purchase and improve property, which he subsequently declared as homestead. The court used the doctrine of constructive trust to hold that the husband was never the owner of the property. In Meyers, again the husband stole funds and purchased a home which he subsequently declared homestead. Again the doctrine of constructive trust was used to follow the funds. In Bush, a fraud in real estate was used by Bush to purchase a homestead. The court used the constructive trust doctrine to follow the proceeds into property which became homestead after purchase.
We distinguish these cases based on the rationale that, where a constructive trust is declared to exist on the stolen funds, the trust property may be traced in its muta tions to property purchased with the stolen funds, providing the property can be identified and is not a previously existing homestead. The property acquired belongs to the beneficiary of the trust and a subsequent declaration of homestead is too late to protect the mutated stolen constructive trust property.
The case before us is unique because a prior final judgment has imposed a lien on one-half of the already existing homestead. Since the Glovers did not make a direct attack upon that judgment, either by a bill of review or an appeal, it must be considered as final, although it may be void for want of jurisdiction over the subject matter. Middleton v. Murff, 28 Tex.Sup.Ct.J. 396, 689 S.W.2d 212 (1985). In Middleton at 397, 689 S.W.2d 212, the supreme court stated that it recognized:
an exception to the Rule 329b(f) requirement of a bill of review in cases where the court rendering the judgment had no "jurisdictional power" to do so. We have defined "jurisdictional power" in this sense to mean "jurisdiction over the subject matter, the power to hear and determine cases of the general class to which the particular one belongs."
The record presented to us in this case includes the petition of Sharp in the first lawsuit, which clearly states that Sharp seeks a lien on a family homestead. Hence, the court in that first lawsuit knew it was dealing with a constitutionally protected homestead, which is evident from the judgment. While we have no authority over the former judgment, we are, nevertheless, compelled to collaterally view the equitable lien as a nullity. In this case, David Glover filed a separate answer in the court below in which he attacked the validity of the equitable lien established in the first lawsuit and cited the constitution as his basis for such attack. Thus, we are presented with the question of a final, non-appealable judgment which appears void on its face, and which one of the appellees collaterally attacked. The question then is whether his attack is limited to a bill of review in the former lawsuit or may he attack the lien imposed by the former judgment in this subsequent action? The answer lies in what the supreme court meant in its definition of "jurisdiction" over the subject matter in Middleton.
Since we are bound by legal precedent, we look for help in Barnett v. Eureka Paving Co., 234 S.W. 1081 (Tex.Comm'n App.1921, opin. apprvd), a landmark case on this subject, which held the prior judgment a nullity based on facts almost identical to those in the present case. The court held in Barnett that the trial court lacked the jurisdiction to impose a lien on a homestead in violation of the constitution.
In the case before us, the original petition in the former lawsuit is presented in the record and it identifies the property, against which the lien is sought, as homestead. The judgment of the former lawsuit clearly sets forth that the lien is against a homestead. Hence, the question of whether the court was aware that the property before it was homestead is clear from the record. The next question is: knowing that the property was homestead, did the court have the power to confer the lien?
As indicated above, we have determined that Barnett v. Eureka Paving Co., 234 S.W. 1081 (Tex.Comm'n App.1921, opin. apprvd), is a fundamental case on the subject. That case is similar to the case before us and we are compelled to follow it. Because of the importance of Barnett to our decision, we present the following detailed summary of the facts therein.
In Barnett, the original or former lawsuit occurred in 1917 and was brought by the City of Houston. The question before the Commission of Appeals of Texas was whether the judgment rendered in the former lawsuit foreclosing a paving lien was authorized by the constitution. In the original lawsuit, no answer was filed and a default judgment was issued. It was a final, non-appealable judgment. Based upon the lien granted in that final judgment, an order of sale was issued. A second lawsuit was filed "praying for an injunction and also to have set aside, can-celled and annulled the former judgment on the ground that the property was a homestead, and . [that] the court had no jurisdiction to render any judgment in the case at all." 234 S.W. at 1082. In dealing with the identical situation we have before us, "[t]he trial court set aside and annulled the former judgment so far as it established and foreclosed a lien upon the property, and removed the cloud cast upon the title to the property by reason of said judg-ment_" 234 S.W. at 1082. That second lawsuit was appealed to the 9th district of the court of civil appeals, as the present case has been appealed to this court. The 9th district reversed and rendered the judgment of the court below.
The case was reviewed by the Commission of Appeals of Texas, which observed that the lien was levied on a homestead. The Commission clearly established that in the former lawsuit, the trial court knew it had a homestead before it. The Commission examined the petition in the first lawsuit (as we have done in our case), and stated: "The language of the petition makes it too plain for argument that the Plaintiff . knew the property was . homestead...." 234 S.W. at 1082. The Commission went on to say: "It is but juggling with words to say that it did not appear in the original suit that foreclosure of a lien was sought against the homestead." 234 S.W. at 1082. In commenting on the reversal by the court of civil appeals, the Commission stated:
The Court of Civil Appeals seems to have laid much stress on the fact that the defense of homestead was not set up in [the former cause]. As has been shown, no answer was filed and no defense of any kind was set up, but the plaintiff's [City of Houston's] own pleading in that case made a defense for the defendant in that, as has been said, it knew the property was a homestead....
234 S.W. at 1082. The commission went on: "In so far as it was sought to enforce a lien against the homestead, no defense was needed, except the absolutely prohibitive provision of the Constitution." 234 S.W. at 1082. The Commission noted the fact that the homestead character of the property was undisputed "and hence, regardless of any defense, the decree entered in [the former lawsuit] was a nullity, and it is not necessary to discuss the question of res adjudicata, on which the Court of Civil Appeals based its holding." 234 S.W. at 1082.
The Commission, in holding that the mandatory provision of the constitution, concerning the protection of the homestead, removes such property from the jurisdiction of the court, stated: "The general rule is well established that a judgment rendered by a court even of general jurisdiction is void, if it had, at the time of the rendition of the judgment, no jurisdiction of the . subject matter." 234 S.W. at 1083.
In reviewing the law of this state on the subjects of collateral attack, homestead, conferred jurisdiction of the district court and provisions mandated by the constitution, since Barnett, we find that the constitutional provision against forced sales of homesteads is of a mandatory character and it has been held with considerable unanimity that forced sales of property constituting a homestead are void and subject to collateral attack, even when the homestead character of the property is not affirmatively disclosed by the record. A judgment ordering a sale is vulnerable to collateral impeachment on the theory that the property was a homestead not only when this fact is revealed by the record but also when the record is silent on the issue. It further appears that the former judgment can stand only when the record discloses that the issue of whether homestead exists has been determined adversely to the one claiming the homestead exemption, in which case the judgment cannot be collaterally attacked. Cline v. Niblo, 117 Tex. 474, 8 S.W.2d 633, 636 (1928). See 34 TEX. JUR.2d Judgments § 314 (1962).
In following the subsequent history of Barnett, we find it is consistently followed. The latest of those cases is Sibert v. Devlin, 508 S.W.2d 658, 662 (Tex.Civ.App.—Texarkana 1974, no writ), which holds, "if the district court was without the jurisdictional power to render the judgment ., that judgment was and is void and it may be set aside . (citing Barnett)." Poynor v. Bowie Independent School District, 627 S.W.2d 517, 519 (Tex.App.—Fort Worth 1982, writ dism'd), holds that "[a] void judgment is not res judicata in a subsequent suit involving the same parties and subject matter." Continental Casualty Company v. Street, 364 S.W.2d 184, 186 (Tex.1963), holds that "the appellate court has jurisdiction to declare the invalidity of a void judgment." (Emphasis added.)
We conclude, therefore, that the trial court in the first lawsuit lacked jurisdiction over the subject matter because of the mandatory provision of the constitution in protecting the homestead from the imposition of any lien except as permitted by the constitution.
Therefore, we hold that the equitable lien imposed in the first lawsuit against the wife's undivided one-half interest in the previously acquired Glover family homestead may not be enforced because of the protection afforded the homestead by TEX. CONST, art. 16, § 50 (Vernon 1955). The judgment of the trial court denying foreclosure is affirmed. All costs of this appeal are assessed against appellants.
GUITTARD, C.J., and STEPHENS, VANCE, ALLEN, WHITHAM, MALO-NEY, HOWELL, McCLUNG and ZIMMER-MANN, JJ., join in the majority opinion.
SPARLING, J., concurring.
AKIN, J., dissenting.
GUILLOT, J., joins in the dissenting opinion.