Sawyer v. First National Bank of Hico

93 S.W. 151, 41 Tex. Civ. App. 486, 1906 Tex. App. LEXIS 394
CourtCourt of Appeals of Texas
DecidedJanuary 31, 1906
StatusPublished
Cited by10 cases

This text of 93 S.W. 151 (Sawyer v. First National Bank of Hico) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sawyer v. First National Bank of Hico, 93 S.W. 151, 41 Tex. Civ. App. 486, 1906 Tex. App. LEXIS 394 (Tex. Ct. App. 1906).

Opinions

SIMMOHS, Associate Justice.

This was a suit brought in the *489 District Court of Hamilton County by the First National Bank of Hico, as a preferred creditor in a deed of trust, and as the owner of the claims of two other preferred creditors, against L. M. Sawyer, trustee, a resident of' Hamilton County, Texas, and M. A. Cooper & Company, a firm composed of M. A. Cooper, B. C. Barrett and C. B. Adams, residents of McLennan County, and H. K. Brewer, a resident of Erath County, alleging that the defendants had been guilty of fraud in depriving plaintiff of its pro rata part of a judgment which had been rendered against the firm of Cooper & Company for the benefit of the preferred creditors. It is unnecessary for us to set out the allegations of the petition and answer; but from the findings of fact of the trial court and the statement of facts in the record, we give the following statement of the case, and adopt it as our findings of fact together with the conclusions of fact of the trial court.

On the 9th day of December, 1895, one J. B. Cline executed a deed of trust on a certain stock of goods, wares and merchandise, situated in the town of Hico, Hamilton County, Texas, naming L. M. Sawyer as trustee, to secure plaintiff in the sum of $457.09, and to secure four other named creditors. Plaintiff had become the owner of the claim of Mrs. H. C. Cline amounting to $820 and the claim of Mrs. Dyer for $800, who were named as beneficiaries in the deed of trust. M. A. Cooper & Co., of Waco, Texas, were creditors of J. B. Cline and J. K. P. Cline, and suit was then pending in the District Court of McLennan County against J. B. and J. K. P. Cline, and said firm caused a writ of attachment to be issued out of said court and to be levied December 10, 1895, upon the stock of goods, wares and merchandise in the possession of L. M. Sawyer, trustee, and afterwards the attachment lien was foreclosed and the proceeds applied on the judgment of said M. A. Cooper & Co. Thereafter, L. M. Sawyer, as trustee, acting for appellee and the other beneficiaries, brought suit in the District Court of Hamilton County against M. A. Cooper & Co., the number of said suit being 1009, and on the 15th day of September, 1902, he recovered judgment against M. A. Cooper & Co., and the members of said firm for the sum of $1,700, with interest at the rate of six percent per annum from the 10th day of December, 1895, until paid. An appeal was taken from this judgment by the defendants to the Court of Civil Appeals for the Third Supreme Judicial District of Texas, and the judgment and decree of the District Court of Hamilton County was duly affirmed.

In the latter part of Ma)r, 1903, L. M. Sawyer, trustee, went from Hamilton to Waco at the suggestion of H. K. Brewer, a member of the firm of M. A. Cooper & Co., to collect the money on said judgment which had been affirmed by the Court of Civil Appeals. After he reached Waco, he was introduced to M. A. Cooper, of the firm of M. A. Cooper & Co., who gave him a certificate of deposit on the Provident National Bank of Waco, Texas, in the following form: ‘^Deposited in the Provident National Bank of Waco, Texas, to credit of L. M. Sawyer, trustee for J. B. Cline, $2,477.95 (signed) B. A. Sturgis, Cashier.” Thereafter, ,and while sitting in the office of the attorney for M. A. Cooper & Co., the sheriff came in and served him, Sawyer, with a writ of garnishment May 19, 1903; and his answer was prepared by said attorney, which answer asked that process issue to the *490 beneficiaries in the deed of trust, which was accordingly done. There were four garnishment suits against Sawyer and the Provident National Bank, which were, upon proper motion, consolidated. The beneficiaries who resided in Hamilton and Erath Counties, plead their privilege to be sued in the county of their residences, and the plea was sustained by the District Court of McLennan County, and said beneficiaries were dismissed from the proceedings.

Afterwards, in the trial of the consolidated garnishment suits, judgment was rendered October 23, 1903, for Cooper & Company against Sawj'er, as garnishee, and the Provident National Bank, as garnishee, in the sum of $2,406.41, together with all costs. The beneficiaries in the deed of trust after their plea of privilege had been sustained, filed a motion for a new trial, and asked that they might be permitted to litigate their rights in McLennan County, which motion was by the court overruled; and, upon request, findings of fact and law were filed by the court in the consolidated garnishment proceedings. On the 19th day of May, 1903, the day the garnishment writ was served on L. M. Sawyer, trustee, there was due and unpaid upon the judgment rendered in cause No. 1009 the sum of $2,477.95. We find that the acts of Sawyer and Cooper & Co., in diverting the trust fund, was a fraud upon the rights of the beneficiaries and that they collusively acted in accomplishing that purpose.

Opinion. In the case at bar M. A. Cooper & Co. and individual members of the firm, filed their plea of privilege, asserting their right to be sued only in McLennan County, the county of their residences, which plea was by the court overruled, and exception taken thereto. This court is of the opinion that the trial court properly overruled the plea of privilege raised in the tenth assignment of error. If there was fraud in the transaction, and it was so alleged in the petition and found by the court, then suit was properly instituted in the District Court of Hamilton County against Sawyer, as trustee, whose residence was in said county, and M. A. Cooper & Company, nonresidents, could be properly joined in such suit. (Sawyer v. Wieser, 84 S. W. Rep., 1101; Rev. Stats., art. 1194, subd. 4 and 7; Cobb v. Barber, 92 Texas, 311.

We are of the opinion that the lower court was correct in overruling the general demurrer set up in the eleventh assignment of error, for the reason that the petition sets out in detail the facts which are relied upon as constituting the fraud, and does not depend upon allegations, which are mere conclusions of law.

The thirteenth, fourteenth and sixteenth assignments of error raise practically the same question, although in a different form; and that is, that the court erred in not sustaining defendant’s special answer of res judicata.

We are of the opinion that the trial court’s action in this respect was correct. L. M. • Sawyer, trustee, in his answer filed in the garnishment proceedings in the District Court of McLennan County had inter-pleaded the beneficiaries in the deed of trust. After proper service they had come into court and filed their plea of privilege to be sued in their own county, and this plea was sustained by the District Court *491 of McLennan County. Afterwards, the beneficiaries desiring to come into said garnishment suit, made a motion for a new trial, which was overruled; and we think the court properly expressed the position of the beneficiaries in its conclusions of law, wherein he stated that, not being parties thereto, they were not bound thereby. It is a general rule that in a suit by or against a trustee in a deed of trust, the beneficiaries are necessary parties.

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Bluebook (online)
93 S.W. 151, 41 Tex. Civ. App. 486, 1906 Tex. App. LEXIS 394, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sawyer-v-first-national-bank-of-hico-texapp-1906.