Court Opinion

ID: 3963294
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:23:20.528617+00
Date Added: 2024-06-11T07:43:47.925999
License: Public Domain

This appeal is from a judgment of the District Court of Harris County in a proceeding by garnishment instituted by the appellee, Elizabeth P. Floeck, against the Planters and Mechanics National Bank, of Houston, and John A. Patton, of Harris County, to reach effects of W.D. Alexander, against whom she had a judgment for about $3000. The answers of the garnishees disclosed, that the bank had in its hands at the time of the service of the writ of garnishment two notes executed by one G.A. Gibbons to the said W.D. Alexander, indorsed to it for collection, and past due when so transferred; that subsequent to said indorsement, and prior to the garnishment, John Finnigan  Co., the appellants, presented to the bank and notified it of an order in favor of that firm for such proceeds when collected; and that said Patton was the trustee of the said Gibbons in a chattel mortgage to secure said notes and others, but that the property assigned to said Patton had become involved in litigation adverse to his claim and possession which was then still pending, *Page 521 
setting out in full the nature thereof. Both the bank and Patton asked to be discharged on their answers.
The writs of garnishment were served December 5, 1894; the garnishees filed their answers on January 4, 1892. On December 16, 1892, plaintiff controverted the answers, and alleged that the matters of litigation set up had been settled, and that garnishee Patton had received for the said Alexander the sum of $2669.98; that the order given by Alexander in favor of John Finnigan  Co. was without consideration, and was given for the purpose of defrauding the creditors of Alexander. John Finnigan Co. were made parties to the proceeding, and answered, that the order was made in good faith to pay two notes made by Alexander to them, and to secure such future advances as they might make to him.
The case was tried below without a jury; and having found that the assignment of Alexander to John Finnigan  Co. of the proceeds of the Gibson notes was fraudulently made with the intent to hinder and delay the creditors, the court rendered judgment in favor of the plaintiff for the sum of $1400, the amount which had been paid or advanced by Finnigan  Co. to Alexander after notice of the service of the writ of garnishment.
Appellant contends, that the finding of the court is not supported by the evidence, and that at most, judgment should not have been for more than the difference between the proceeds of the Gibson notes and the amount of Alexander's notes to them and such advances as they had made to him prior to the garnishment. While the evidence is meager, still we believe it is sufficient to support the finding as to the fraudulent character of the assignment made by Alexander to Finnigan  Co. Such being the case, the court properly rendered judgment in favor of the appellee, and should have rendered it for the entire amount of proceeds of the Gibson notes. There being no error of which the appellants can complain, the judgment will be affirmed.
Conclusions of Fact. — 1. Elizabeth P. Floeck was the owner of a judgment obtained by the plaintiff therein against the defendant therein in the District Court of Harris County, on April 4, 1879, in suit number 10,407, Peter Floeck v. W.D. Alexander and William Guion, for the sum of $2500, besides costs of suit, with interest thereon at the rate of 12 per cent per annum from the date thereof. Such judgment had been properly kept alive, was in full force, and there was due thereon about the sum of $3000 when the garnishment was applied for.
2. As appears from the answer of the garnishees, W.E. Alexander indorsed to the Planters and Mechanics National Bank, for collection, on or about September 1, 1891, two notes executed by G.A. Gibbons to him; one dated July 6, 1888, due one day after date, for the sum of $1305, with interest at the rate of 10 per cent per annum, having a credit on interest of $50; the other dated February 10, 1888, due one *Page 522 
day after date, for the sum of $1890, with interest at the rate of 10 per cent per annum, having a credit on interest of $62. Gibbons was the son-in-law of Alexander.
3. John Finnigan  Co. were dealers in hides and wool up to 1891, when they commenced also to buy cotton. In 1887 they bought some wool at Ballinger and Wichita Falls on joint account with Alexander, on which there was a loss. Alexander entered into their employment in September or October, 1891, in their cotton business, at a salary of $50 a month.
4. On September 8, 1891, G.A. Gibbons executed a deed of trust or chattel mortgage in which he conveyed to James A. Patton his entire stock of goods, wares, merchandise, and implements, contained in his tailoring establishments in Houston and San Antonio in trust for the payment of certain indebtedness mentioned in said deed of trust in the order named, among which were the Alexander notes as above described, and as having been transferred to said Planters and Mechanics National Bank by said Alexander. As appears from the answer of the trustee, Patton, he was restrained from proceeding with the execution of the trust, on October 4, 1891, by the order of the United States Circuit Court for the Eastern District of Texas, made in two cases therein pending against said Gibbons, and said goods were taken from his possession and put in the hands of receivers. But when the case was tried below, Patton, as trustee, had received and paid over to the bank on said notes the sum of $2669.98.
5. On or about October 1, 1891, John Finnigan  Co. presented to the bank the following order or assignment:
"HOUSTON, TEXAS, October 1, 1891.
"Planters and Mechanics National Bank, Houston, Texas:
"Please pay to the order of John Finnigan  Co. the proceeds of two notes of G.A. Gibbons transferred by me to your bank, after paying yourselves all amounts due you on all collection charges or expenses of collecting. Said notes being described as follows: One note dated July 6, 1888, due one day after date, and calling for $1305, and 10 per cent interest until paid; and one note dated February 10, 1888, due one day after date, and calling for $1890, with 10 per cent interest until paid.
Yours respectfully,
[Signed]      "W.D. ALEXANDER."
6. R.E. Paine, a member of the firm of John Finnigan  Co., testified, that the consideration of the assignment by Alexander to his firm was the payment of two notes executed by Alexander, payable one to order of John Finnigan  Co., with 10 per cent interest per annum, dated September 1, 1891, due at thirty days, for $895.75, and the other to the order of R.E. Paine, with 10 per cent interest, one day after date, September 28, 1891, for $850, indorsed by Paine to Finnigan  Co.; also, for the payment of such small amounts as the firm *Page 523 
should advance Alexander; that the consideration of the notes was to cover the indebtedness of Alexander to them on account of losses in their joint purchase of wool, for which Finnigan  Co. advanced the money; that some of the wool was held and not sold until about three years after its purchase. He testified further, that he did not know that Alexander owed any one. No other member of the firm testified or was accounted for.
7. While there was no direct evidence of the insolvency of Alexander, we conclude from all the facts that he was insolvent, and that John Finnigan  Co. knew of his insolvency. They dealt with him as an insolvent person.
8. None of the transactions testified to by Paine as furnishing the consideration of the Alexander notes, nor any memorandum of their existence, are entered in the books of John Finnigan  Co.; nor do the books show that Alexander was indebted to them. Commencing October 22, 1891, and ending March 8, 1892, John Finnigan  Co. paid to Alexander in cash $1745, of which $1410 was paid after notice of the garnishment.
9. We see no reason to reverse the conclusion of the trial court that the assignment made by Alexander to John Finnigan 
Co. of the proceeds of the Gibbons notes was fraudulently made with intent to defeat the collection of the debt of plaintiff and other creditors.
Conclusions of Law. — Upon the facts, judgment should have been entered in favor of the plaintiff for the entire amount of the proceeds of the collection in the hands of the bank.
                    ON MOTION FOR REHEARING.