Opinion ID: 1681558
Heading Depth: 1
Heading Rank: 1

Heading: Plea of the Four-Year Statute of Limitation

Text: We shall next dispose of the defendants' contention that the plaintiffs' cause of action was barred by the four-year statute of limitations. It is the defendants' position that the only remedy available to the plaintiffs was an equitable action to set aside the conveyances as fraudulent, and that such an action was barred by Article 5529, supra. The defendants contend that since the plaintiffs obtained their judgment in Ft. Davis after the fraudulent conveyances were made, the plaintiffs are not entitled to relate the judgment back so as to establish a lien on the property at the time of conveyance when legal title to the property stood in the name of the defendant. Thus, the defendants conclude that the plaintiffs had no judgment lien which they could establish and foreclose unless they first maintained an equitable action to set aside the fraudulent conveyance. On the other hand, the plaintiffs argue that since they were judgment creditors of the defendants, they had alternative remedies available. First, the plaintiffs argue that they could maintain an equitable suit to set aside the fraudulent conveyances as an obstruction to the collection of their debt. Alternatively, the plaintiffs insist they could establish and foreclose their judgment lien on the land fraudulently conveyed. The plaintiffs argue that this alternative remedy was available to them without first maintaining an equitable action to set aside the conveyances. We sustain the plaintiffs' position. In Eckert v. Wendel, 120 Tex. 618, 40 S.W.2d 796, 76 A.L.R. 855 (1931), the defendant, who was a debtor of the plaintiff, fraudulently conveyed certain land in 1921. Not until 1927 did the plaintiff-creditor institute proceedings whereby he obtained a judgment against the defendant for the debt. Thereafter, in 1928, the plaintiff brought suit to cancel the 1921 conveyance as fraudulent, and to establish and foreclose his judgment lien. In answer to the defendant's argument that the suit was barred by the four-year statute of limitations (Article 5529, supra), this court first set out the general rule that until a creditor fixes a lien his only remedy as against the grantee in a conveyance of real estate in fraud of his rights    is an action for a decree annulling the conveyance as an obstruction to the collection of his debt. Such an action is not one for the recovery of land, nor is it one to enforce a lien on land, but it is simply an action to cancel a conveyance of land because of fraud, and, no other period of limitation being prescribed for such an action, it comes within the four-year statute. However, the Court further held that since the plaintiff had obtained a judgment against the defendant, Article 5529, supra, did not bar his right to foreclose this judgment since:    a suit to enforce a subsisting judgment lien on land against a grantee in a conveyance void under our statutes as to the judgment creditor is not barred until the fraudulent grantee or his assigns acquires `full title' to the land, `precluding all claims,' under some statute of limitations which would bar an action for the recovery of real estate. There is no merit to the defendants' position that the Eckert decision conflicts with cases by this court which hold that a judgment lien does not attach to land until an abstract of judgment has been properly recorded and indexed. The Eckert case does not hold that a judgment creditor may relate his judgment back so as to establish a lien on land which is fraudulently conveyed prior to the creditor obtaining a judgment. No holding in the Eckert decision was based on the relation-back doctrine. The theory of the Eckert case is simply that a conveyance which is found to be fraudulent as to creditors is wholly null and void as to such creditors under the provisions of Articles 3996 [3] and 3997, [4] Vernon's Annotated Civil Statutes. It necessarily follows that the legal as well as the equitable title remains in the debtor for the purpose of satisfying debts. Thus, when the creditor obtains a judgment against the debtor, and properly records and indexes an abstract of such judgment, the creditor acquires a lien upon the land just as though no transfer had been made. In the Eckert case, decided in 1931, this court held that the legal remedy of establishing and foreclosing his judgment lien is available to a judgment creditor without first maintaining an equitable action to set aside the fraudulent conveyance. Furthermore, this remedy of foreclosure may be pursued by the creditor even when his equitable action to set aside a conveyance has been barred by Article 5529, supra. We can see no sound basis, at this late date, for overruling the Eckert decision and now holding that a debtor, by fraudulently conveying his land prior to the entry of judgment, may force a judgment creditor to pursue only an equitable remedy, and deprive the judgment creditor of his legal right to foreclose his judgment lien. Under the Eckert case, this direct attack based on his judgment is available to the creditor until the fraudulent grantee or his assigns acquire full title to the land, precluding all claims, under some statute of limitations which would bar an action for the recovery of real estate.