Court Opinion

ID: 4133020
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:33:01.845942+00
Date Added: 2024-06-11T14:37:39.448101
License: Public Domain

T~XAA'ITORNEYGENERAL
                                      OF TEXAS
                                     Aus-cmr.    T-e         78711
   JCBBN     L.     EllLL
*TroRN~           GENEmAL

                                                July 30.   1974

           The Honorable Tom Hanna                            Opinion   No.   H-   358
           Criminal District Attorney
           Jefferson County                                   Re: Rights of purchaser    at
           P. 0. Box 252 3                                    an execution sale based    on
           Beaumont,  Texas   77704                           a void 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 on a void judgment.     In connection
           with your request we have received from an interested       party a memorandum
           with attachments    which indicates that the facts you have presented to us
           are subject to dispute and may ultimately have to be resolved in litigation.
           It is not the function of this office to resolve factual questions.    This
           opinion is based on the facts that you have presented to us, but it 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 a judgment against a defendant and his sureties in the amount
           of thirty five thousand dollars.    This judgment was void as to the sureties
           because process was never served on them.         Nevertheless,    on the basis
           of the judgment,   execution was levied on some real property belonging to
           one of the 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   of the judgment.

                   Subsequent to the execution sale the judgment 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 1685
The 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 of a purchaser
with respect to the property purchased at a sheriff’s  sale on a.void judg-
ment.

         The general rule is that an execution sale based upon a judgment
which is not void but merely erroneous      will be sustained if the purchaser
is a stranger to the judgment.       Thus, when the purchaser at an execution
sale is someone other that the judgment creditor and is acting in good
faith, his title to the property in question will not be disturbed’ or affected
by a subsequent reversal     of the judgment.   Stroud v. Casey,    25 Tex. 740
 (1860); Texas Co. v. Dunlap, 41 S.W.2d 42 (Tex. Comm. App.,           1931);
Glaze v. Johnson, 65 S.W. 662 (Tex. Civ.        App.1901,   writ ref.); and Cordray
v. Neuhaus, 61 S.W. 415 (Tex. Civ. App. 1901, writ ref.).

         A different rule is applicable,    however,    when the judgment upon
which an execution sale is based is void.        In this situation a purchaser
at the sale, even though bona fide and not the judgment creditor,           obtains
no title in the property purportedly      sold and furthermore     has no cause
of action against the judgment 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 on a void judgment.        The judgment was void because the record
indicated that process was never properly served upon Huff.             Stegall was
a stranger to the judgment and a bona fide purchaser.            Nevertheless    the
Supreme Court held that, because the judgment was void, the sale under
it did natdivest Huff of title to -his land.    In addition the Court held that
Huff was 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, no writ), and Texas Co. .v. Dunlap, 21 S.W.
2d 707 (Tex. Civ. App., Waco, 1929), affirmed 41 S.W.2d 42 (Tex. Comm.
App. 1931).

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

.:
                  The principle established   in Stegall plainly controls the fact situa-
         tion you have presented to us.     The surety whose property was sold at an
         execution sale based on a void judgment’has       not been divested of his title
         to that property.    The purchaser   at the sale, though entirely innocent, has
         no cause of action against the surety for the purchase price he paid to the
         sheriff because otherwise the surety might be forced to pay a debt he did
         not owe.   In short the purchaser   must look elsewhere    for relief from his
         predicament.

                   Ordinarily,  in resolving   the claim of an execution sale purchaser
         against a judgment creditor for reimbursement          of purchase money, Texas
         courts apply the doctrine of caveat emptor,        holding that neither the judg-
         ment creditor nor the sheriff may be held responsible         for a failure of title
         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 to assume the posture of the judg-
         ment creditor and pursue whatever claims the creditor has remaining
         against the judgment debtor.        Rosenthal and Desberger     v. Mounts,    130
S.W. 192 (Tex. Civ. App.,       1910, no writ).   Subrogation would be of no
         avail to the 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          in an 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 of the caveat emptor
         doctrine and stated that in circumstances     where the judgment creditor had
         already been satisfied in full “nothing would be more unjust than for the
         purchaser    at a void execution sale to receive nothing for the money he
         pays but the holder of the jtdgment be permitted to retain that money in
         satisfaction   of his 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.   1687
 The Honorable      Tom Hanna      page 4        (H-358)

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

         In the fact situation you have posited,     the judgment creditor,   i. e.,
 the county, in effect has been paid twice.       The county’s judgment against
 the defendant and his sureties has been satisfied in full, and in addition it
 has received the money paid by the purchaser at the execution sale based
 upon a void judgment.      The purchaser   on the other hand has received nothing
 for his money.    In these 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 the judgment upon which an execution sale
                    is based is void, a purchaser at the sale obtains no
                    title,in the property and has no cause of action against
                    the judgment debtor for the purchase price paid.
                    Ordinarily   the doctrine of caveat emptor would pre-
                    clude the purchaser     who finds himself inthis situa-
                    tion from recovering     his purchase money from the
                    judgment creditor.      But where the judgment creditor
                    has in effect been paid twice,~,courts would as a matter
                    of equity require him to repay the purchase money to
                    the.purchaser.

                                                            ery truly yours,

                                                           Attorney   General   of, Texas
 APPRb&D:

v--          -‘-

 DAVID M. KENDALL,           Chairman
 Opinion Committee

                                          p.    1688