Case ID: sw2d_25/html/0601-01.html
Source: Caselaw Access Project
Author: {"author": "HARVEY, P. J. CURETON, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

UNIVERSAL AUTOMOBILE INS. CO. OF DALLAS v. CHRISTENSEN et al.
    No. 1263-5299.
    Commission of Appeals of Texas, Section A.
    March 12, 1930.
    
      Levy, Levy, Barker & Kahn, of Galveston, for appellant. ■
    Terry, Cavin & Mills, of Galveston, for ap-pellees.
   HARVEY, P. J.

The Court of Civil Appeals has submitted the following certificate containing certified questions:

“The appellees, John Christensen and A. J. Rasmussen, who composed the business firm of John Christensen & Company, brought suit in the court below against Victoria and George Smith to recover upon notes executed ¡by the defendants and secured by mortgage lien upon an automobile owned by them. .In' this suit plaintiffs sued out a writ of garnishment against the appellant. The writ was served on appellant on June 17, 1927, and on June 20, 1927, appellant filed an answer denying that it was indebted to the defendants in any amount or had any effects of defendants in its possession, or Knew of any person or persons indebted to defendants or having effects belonging to defendants in their possession.
“On September 24, 1927, plaintiffs filed affidavit controverting appellant’s answer. This controverting affidavit was answered under oath by appellant.
“From these affidavits and the undisputed evidence adduced on the trial, the following facts are shown:
“Appellees recovered in their suit against Victoria and George Smith for a sum in excess of the amount adjudged against appellant as garnishee.
“Garnishee corporation had issued a policy of liability insurance in favor of the Universal Terminal Warehpuse Company covering claims for property damage or personal injuries. An automobile belonging to the Universal Warehouse Company was involved in a collision with a car owned by Victoria Smith and George Smith, against which car a mortgage existed in favor of John Christensen & Company. George Smith, Victoria Smith, Willie Herd and Mary Gilbeau filed claims for personal injuries and property damages against the Universal Terminal Warehouse Company. Discharging its obligation to the Warehouse Company under the terms of said insurance policy, garnishee corporation settled all of said claims for a sum of Two Hundred Twenty Five ($225.00) Dollars, for which amount a sight draft was drawn by the Galveston Insurance Agency, local agents for garnishee corporation, on said corporation, the draft being payable at Dallas, Texas, to said claimants dr their order. Having learned that Christensen & Company held a mortgage against the car involved in said collision, the local insurance agency notified Christensen & Company, as a matter of accommodation, of its intention to deliver said draft. One of the members of said firm, A. J. Rasmussen, thereupon came to the office of the Galveston Insurance Agency and according to the undisputed testimony of J. M. Jacobs, General Manager of the local agency, offered no objection when he was told that the draft was to be paid to said claimants. He was present when the draft was delivered on June 16, 1927. Thereafter, on June 17, 1927, the Writ of Garnishment was served on the local agency. Subsequent to June 20,1927, the date the answer of garnishee was filed, said draft was presented for payment at Dallas on the second day of July,'1927, and was then paid. The delay was due to the fact that the payees did not succeed in getting the draft cashed in Galveston and carried it to Houston and finally had it put through for collection, after they had obtained the signature of Gustavia Livingston as an endorser thereof. Gustavia Livingston was known at the Houston bank in question and put the draft through for collection in her name and received payment from said bank after the draft was’ paid in Dallas. However, the said Gustavia Livingston received no part of said money but paid over the whole amount to the payees named in the draft.
“The trial of the case on October 26, 1927, resulted in a judgment against garnishee for the sum of One Hundred Fifty ($150.00) Dollars, that being a portion of the total amount of the draft which was received by Victoria Smith and George Smith, and for all costs of court.
“As shown by the above statement, the draft was made payable jointly to the four claimants, and tiie undisputed evidence shows was issued and accepted in settlement of the claims of all of the payees without any agreement or understanding between the drawer and payees as to the amount any one of the payees would receive, or as to what portion, if any, of the amount was in settlement of the claim for damages to the Smith automobile.
“The draft when presented for payment and paid by appellant was endorsed by all of the payees and by Gustavia Livingston. It also contained -the endorsement of the forwarding bank that it was held ‘for collection only.’
“When the appellant paid the draft at Dallas on July 2, 1927, it had no information as to what portion of the amount was payable to the defendants, Yictoria and George Smith, and did not know whether the original payees or the subsequent endorser, Gustavia Livingston, was the owner, and had no means of knowing whether or not Gustavia Livingston was a purchaser and holder of the draft for value in due course of trade.
“An appeal from this judgment is pending in this court on motion for rehearing, and the case being one in which the jurisdiction of this court is final, we deem it proper to certify for your decision the following questions,' which are not entirely free from doubt and which we deem important to the jurisprudence of the state.
“First: Upon the facts above stated, was the liability of appellant upon the draft to Victoria and George Smith a' liquidated indebtedness to them for which appellant could be held liable to appellees in garnishment proceedings?
“Second: Was appellant protected under our negotiable instrument act in the payment of the draft to Gustavia Livingston?”

Although the sum due by the insurance company to the four claimants, collectively, became liquidated by the agreement of the parties, and is evidenced by the draft, the sum due the Smiths under the draft remained unliquidated. The transaction in which the draft was given supplied the insurance company with no data from which the sum due the Smiths may be calculated, nor did the company, when required to make answer to the writ of garnishment, possess the means of ascertaining what sum was due the Smiths under the draft. In circumstances similar to these, it has been held that it is unreasonable to compel the garnishee to answer under oath “what/ if anything, he is indebted to the defendant.” The claim of the Smiths against the company, being unliqui-dated, was not subject to the garnishment. Waples-Platter Grocer Co. v. Texas & P. R. Co., 95 Tex. 486, 68 S. W. 265, 59 L. R. A. 353.

We recommend that the first certified question be answered in the negative. An answer to the second question is unnecessary.

CURETON, C. J.

The opinion of the Commission of Appeals answering the certified question is adopted an¿ ordered certified.