Joseph Linz & Bro. v. Atchison

38 S.W. 640, 14 Tex. Civ. App. 647, 1896 Tex. App. LEXIS 409

• Court: Court of Appeals of Texas
• Decided: November 25, 1896
• Status: Published

Opinion

KEY, Associate Justice.

Appellants caused writs of attachments to be issued against J. T. Melton, and levied' upon certain personal property in the actual possession of appellee W. B. Atchison. Atchison instituted this statutory proceeding for the trial of the rights of property. The levy was not made by giving notice to Atchison, but by actual seizure by the sheriff, who took the property from Atchison’s possession.

The trial court filed the following conclusions of fact and law:

“1. That on November 28, 1891, J. T. Melton executed and delivered to W. B. Atchison the deed of trust described in defendant’s answer and that said trustee immediately accepted the same and took possession of goods therein described.

“2 The following named debts mentioned in said mortgage covering the goods in controversy were fictitious and fraudulent, to-wit: S. V. Sands, $530; C. E. Sands, $530. That the following were valid subsisting debts: Hamilton; $1000; W. B. Atchison, $250; J. T. Sands, $1400, and M. E. Sands, $540—there being no proof that Hamilton, Atchison, J. T. Sands and M. E. Sands had knowledge of the fictitious character of the two debts first named.

“3 .The beneficiary Hamilton is not shown to have ever accepted under said mortgage and if he did accept it was after the three several attachments of plaintiffs had been run.

“4. The evidence is silent as to whether the defendant Atchison knew of or participated in any fraud of J. T. Melton in the execution of said mortgage, he not having been called to testify as a' witness. J. T. and O. C. Melton testified that J. T. Melton owed said Atchison $250 at time of execution of said mortgage, evidenced by a note or due bill, and there was no other evidence as to the genuineness of said debt.

“5. That plaintiffs sued out and caused to be levied writs of attachment as hereinafter named, and Atchison made claimant’s affidavit and bond under the statute, with J. A. Rushing, J. G. Mitchell and A. M. Robertson as sureties.

“6. Said goods were of the value of $3821.46 at the date of the levy of said attachments, and after the claimant’s bond was filed said goods were sold and disposed of in bulk and at retail to various parties, and it is now altogether impossible that they or any part of them can be returned in their original condition.

“7. J. T. Melton was and is indebted to the respective plaintiffs in the several amounts claimed by them, as follows:

“To Jos. Linz & Bro., $814.57 and 6 per cent interest from 22nd March, 1892.

“To Geo. Walshe & Co., $611.65 and 6 per cent interest from 2nd February, 1892.

“To Simpson, Porter & Co., $822.62 and 6 per cent interest from 22d March, 1892.

“Besides costs of suit, Linz & Bro., $51.40, Walshe & Co., $12.20, and Simpson, Porter & Co., $12.40, and on the 28th day of November, 1891, said Linz & Bro. sued out and levied attachment on said goods, wares and merchandise for the said debt, interest, &c., and on the 29th day of November, 1891, said writs of the other plaintiffs were respectively levied.

“8. That immediately upon the execution of the trust deed in question the trustee, Atchison, took actual possession of the goods in question, and said deed of trust was duly filed and recorded as a chattel mortgage prior to the levy of the several attachments of the plaintiffs herein, Atchison being in possession at the time of such levies.

“9. That the main intent and motive in J. T. Melton in the execution of the trust deed in question was to secure the debts and parties therein named, and that such deed was not fraudulent and void, unless the fact that he included fictitious debts made it so; and the court concludes, as matter of law, that the fact that J. T. Melton included as among the debts attempted to be preferred the said fictitious debts of said two Sands children would and did not have the effect of wholly avoiding the deed; but, on the contrary, to the extent of said valid debts, the deed was good, and Atchison’s possession lawful; and that the creditors’ remedy was to garnishee Atchison or to attach by giving notice to Atchison as provided by law. To the extent of the fictitious debts, the court finds that J. T. Melton’s intent was fraudulent and with intent to hinder and delay his creditors, and this intention was shared in by O. C. Melton; but there is no proof that Atchison or the other beneficiaries had any knowledge of such fraudulent intent, and the court finds that the trustee had the legal right to retain the actual possession of the goods without interference and to execute the trust as provided by his deed by the payment of all valid debts.”

Opinion.—Both J. T. and O. 0. Melton testified by deposition to the genuineness of the $250 debt to Atchison which is secured by the mortgage. Atchison himself did not testify, and it is contended on behalf of appellants, that, as the court found that J. T. Melton intended to defraud some of his creditors, and O. C. Melton participated in such fraudulent intention, and appellee Atchison failed to testify to the genuineness of his claim, the finding of the court that it was a valid debt is not supported by competent evidence, and should be disregarded by this court.

We do not feel authorized to sustain this contention. It is not always the case that because a debtor has attempted to defeat' certain creditors, therefore he will not swear the truth; and where a jury, or a trial judge acting in lieu of a jury, has given credence to the uncontroverted evidence of such a debtor, corroborated, as in this case, by other testimony, we do not feel at liberty to set aside the finding.

We therefore sustain the finding of the trial court that the claims of Atchison, Hamilton and J. T. Sands and M. E. Sands were valid debts against J. T. Melton. It is true that Hamilton was not shown to have accepted under the mortgage; but if his claim be eliminated there will remain valid claims amounting to 82190 secured by mortgage. But of this amount it is urged that the claims of J. T. Sands and M. E. Sands, amounting to 81940, should be stricken out, because their agent, O. C. Helton, who accepted the terms of the mortgage for them, had knowledge of and participated in the fraudulent purpose of J. T. Melton. If the soundness of this argument be conceded, and the claims of these two beneficiaries be rejected, there will still remain the claim of appellee Atchison that is not tinctured with any of these vices; and if the claim of but one secured creditor be genuine and he is free from fraudulent conduct the mortgage is valid, although, as to other creditors, it may be fraudulent and inoperative. Rider v. Hunt, 6 Texas Civ. App., 238; Kraus v. Haas, 6 Texas Civ. App., 665; Byrd v. Perry, 7 Texas Civ. App., 378.

It is stated in appellants’ brief, though we find no such' pleading in the record, that they offered to pay off Atchison’s debt; and the contention is urged by counsel that, conceding the validity of Atchison’s debt and of the mortgage for the purpose of paying his debt, the mortgaged property being greatly in excess of that debt, they are entitled to judgment in this case against the appellees for such excess.

The argument is, that, although appellants did not levy their attachments in the manner required by statute when a person other than the defendant in attachment is rightfully in possession of the property, still their levy was valid as against the mortgagor, and by giving bond and recovering possession appellees have waived the irregularity of appellants’ levies.

But if it be conceded that appellants acquired a lien by their levy, such lien was junior and inferior to Atchison’s mortgage lien, and the latter was entitled to possession of the mortgaged property—the only right involved in this proceeding. However, we are referred to the fact, as shown by uncontroverted testimony, that Atchison has sold the mortgaged property for considerably more than enough to pay his claim. But this is not a suit by a lien holder to recover damages for conversion of the encumbered property; and no matter what the proof may show, on the pleadings in the record relief along that line can not be granted by this court. As shown by the record, this is purely a statutory proceeding to try the right of property; and it being made to appear that Atchison was a mortgagee rightfully in possession of the property when it was seized under the attachments sued out by appellants, the court properly rendered judgment for him and his sureties. Osborn v. Koenigheim, 57 Texas, 91; Erwin v. Blanks, 60 Texas, 583; Garrity v. Thompson, 64 Texas, 597; Willis and Bro. v. Thompson, 85 Texas, 302.

Again, as appellants have alleged and proved that appellee Atchison was and is insolvent, it is obvious that their real object is to hold liable appellees Rushing, Mitchell and Robertson, the sureties on the bond for the trial of the right of property given by Atchison. And this we are clearly satisfied cannot be done under the pleadings and evidence now in the record. The liability of such sureties, as fixed by the terms of the bond, was dependent upon Atchison’s failure to establish his right to possession of the property. Sayles’ Civ. Stats., art. 4824. And, Atchison having established his right to such possession, there was no breach of the bond; and the sureties are not parties to the suit otherwise than as sureties on the bond; and it is not alleged nor proved that they had unlawfully misappropriated or converted the mortgaged property. In fact, no such conversion is charged against Atchison or any one; but the argument seems to be, that the levy of appellants’ attachments should be given the effect of service of a writ of garnishment and entitle appellants to recover of appellees the difference between the value of the goods and Atchison’s debt.

We cannot sustain this position; but, on the contrary, think the court rendered the proper judgment, and it will be affirmed.

Affirmed.

Appellants filed motions for rehearing, based substantially upon the points and authorities embraced in their original brief. The motions were overruled. In response to a request contained in the motion of Creo. Walshe & Co. and Simpson, Porter & Co. the court made the following additional findings of fact:

“(a) That the attachment of Linz Bros, was levied on the goods in controversy on 28th Nov., 1891, while same were in the actual possession of the trustee Atchison, and were taken into the possession of the sheriff; that on the next day and while the goods were still held by the sheriff under the Linz writ, these appellants caused their respective writs to be levied subject to the lien of the Linz writ, in the manner prescribed by law for levy on goods in custodia legis; and that thereafter on Dec. 2nd, the trustee Atchison filed his claimant’s bond.

“(b) That in procuring the execution of and in the acceptance of the mortgage J. T. and M. E. Sands were represented by O. C. Melton, who was a participant in the fraud of the grantor J. T. Melton.

“(c) That at the time of the execution of said mortgage J. T., S. V., M. E. and C. E. Sands were minors, under the age of 21.

“(d) That in fact O. C. Melton, who acted as the agent of J. T. and M. E. Sands, in the acceptance of said mortgage, had knowledge of and participated in the fraudulent intent of the grantor.”

Writ of error refused.