Sawyer v. J. F. Wieser & Co. ( 1904 )

This is a suit by Wieser Co. against L. M. Sawyer and M. A. Cooper Co., naming the members of the firm, and the Provident National Bank. The bank is no longer a party, as it was dismissed from the case. The purpose of the suit was to hold Sawyer and Cooper Co. for the sum of $300, which the petition alleged the appellants by a fradulent conspiracy had deprived them of. It is averred that Wieser Co., among others, were preferred creditors in a deed of trust executed by one J. E. Kline, wherein the appellant Sawyer was named as trustee, and that the stock of goods, wares and merchandise of Kline was transferred to Sawyer for the benefit of the appellee and the other preferred creditors; that after this deed of trust had been executed and the goods delivered to Sawyer, Cooper Co. by attachment process seized and levied upon the goods, and that Cooper Co. claimed at the time to be creditors of Kline; that the goods were appropriated by Cooper Co. under the attachment process, and thereafter Sawyer, for the benefit of the appellees, Wieser Co., and the other preferred creditors, brought suit in the District Court of Hamilton County against Cooper Co. and the members of the firm for the value of the goods so appropriated by them, and recovered a judgment against them for the sum of $1700, with interest thereon at the rate of 6 percent per annum from the 10th day of December, 1895; that said judgment was appealed from by Cooper Co., and was affirmed; that thereafter the appellants, Sawyer and Cooper Co., fraudulently conspired together for the purpose of defeating the purposes of the judgment and the rights of the plaintiff therein, and that in accordance with such fraudulent and corrupt conspiracy, Sawyer, at the request of Cooper Co., went to the City of Waco and received from Cooper Co. payment of the judgment before recovered against them, and that in furtherance of the conspiracy a garnishment process was sued out by Cooper Co. against Sawyer, claiming that he was indebted, or had property or effects in his hands belonging to Kline; and that in furtherance of the conspiracy and the purpose to defraud the plaintiffs, the attorneys of Sawyer were allowed to prepare his answer in the garnishment suit, which answer, it is alleged was favorable to Cooper Co., and one of the purposes of the conspiracy was to bring the garnishment suit in Waco, in a county other than the residence of Sawyer and the plaintiffs, which was Hamilton County, for the purpose of requiring the plaintiff and the other preferred creditors to go away from their home and to journey to McLennan County, in order to litigate whatever rights they might have to the fund garnisheed; that defendants Sawyer and Cooper fraudulently caused the judgment in the District Court of Hamilton County previously recovered against Cooper to be declared satisfied; that the plaintiffs demanded of Sawyer their pro rata share of the amount claimed to have been paid him by Cooper under the judgment in the District Court of Hamilton County in accordance with the terms of that judgment and the deed of trust; that Sawyer is insolvent and that a judgment against him would be worthless; that thereafter the plaintiff with other preferred creditors was cited to appear in the District Court of McLennan County, where the garnishment proceedings were then pending, in which court the plaintiff, with the other preferred creditors presented a plea of privilege to be sued in Hamilton County, the county of their residence, which plea the District Court of McLennan County sustained. Plaintiffs' petition then concludes with a prayer that they have judgment for their debt, that is, the sum of $300 with interest; and we understand this to mean that the purpose and object of the plaintiffs' case was merely to recover the proportion of a sum, which, as preferred creditors under the deed of trust, they were entitled to, by reason of the judgment of Sawyer against Cooper Co., which amount had been paid by Cooper Co. to Sawyer, but which by reason of conspiracy alleged between Sawyer and Cooper Co., the effect was to defeat the plaintiffs' claim, and the other preferred creditors under the deed of trust.

The defendant pleaded the judgment rendered by the District Court of McLennan County in the garnishment suit as res adjudicata, and also Cooper Co. pleaded their privilege to be sued in McLennan County, the county of their residence. And they also presented other issues by their answer, which are not necessary to be noticed in detail.

It appears from the evidence in the record that Sawyer's residence was in Hamilton County, and that Cooper Co. resided in McLennan County. Both being joined as defendants, and being jointly responsible for the same act, suit was properly brought by the appellees in Hamilton County, the residence of Sawyer. One of the defendants residing there fixed the venue there as to the remaining defendants.

Demurrers were addressed to the petition upon the ground that the acts of fraud were not sufficiently and definitely stated. These demurrers were overruled. We are of the opinion that the averments were sufficient; and we are also of the opinion that if the facts alleged were true, in view of the law to be subsequently discussed, they constituted a fraud upon the rights of the appellees and the other preferred creditors, who are protected by and had previously recovered the judgment against Cooper Co.

The assignments of error that contend that the garnishment proceeding in McLennan County was res adjudicata, and was final as to the rights of the appellees, are overruled. The appellees, although given the opportunity to appear in that case, were not concluded by the judgment rendered. They asserted their privilege to be sued in the county of their residence, and not McLennan County, and the trial court in the garnishment case sustained this plea of privilege. At the time that that judgment was rendered they were not a party to the case, and their rights were not presented nor litigated.

Other questions are raised in the brief by various assignments of errors, but it is unnecessary that we should discuss them in detail, in view of the conclusion we have reached on the facts of the case, when construed in connection with the opinion heretofore rendered by this court in Cooper Co. v. Sawyer, 31 Texas Civ. App. 620[31 Tex. Civ. App. 620]. The judgment there rendered by us affirming the judgment of the District Court is final; and if we are correct in the views to be expressed, the trial court in disposing of this case should have peremptorily instructed a verdict in favor of the appellees. We there held that the suit instituted by Sawyer, as trustee against Cooper Co., for the value of the property that they had appropriated by virtue of the attachment process, was practically and in effect a suit for the benefit of the appellees and other accepting creditors of Kline. In that case Sawyer recovered a judgment which was for the benefit of the appellees and the other accepting creditors, and the practical effect of it was to establish the right of the appellees and such other creditors to a superior right in the judgment against Cooper Co., and the proceeds that might thereafter be paid to Sawyer by Cooper Co. in discharge of that judgment. The judgment does not in terms declare that this was its effect, but this is the effect that the law will give to it, when construed in connection with the opinion cited.

In that case the defendant alleged that the debts mentioned in the deed of trust were fictitious and fraudulent, and that the deed of trust was executed to hinder, delay and defraud the creditors of Kline and his father, J. K. P. Kline, who had formerly owned the stock of goods; that the trustee had not taken possession of the goods when the writ was levied, and that none of the creditors had accepted under the deed of trust before the levy of the writ. This was the plea of Cooper Co., and we said, "that the verdict of the jury settled all of these issues against the defendant, and that a careful examination of the statement of facts convinces us that there was evidence to sustain the finding of the jury upon each of these issues." Cooper Co. pleaded these defenses against the action of Sawyer, which was for the benefit of the appellees and the other accepting creditors, in bar of their right to recover. The issues were presented and passed upon, and as against Cooper Co., the verdict and judgment rendered in that case definitely settled the questions as to the deed of trust not being fradulent and that the goods were in possession of the trustee when levied upon by the attachment process, and that the creditors, among whom were the appellees in this case, had accepted the terms of the deed of trust before the levy of the writ. And we refused, upon the appeal of Cooper Co. to disturb the verdict, either in the amount or upon any of the grounds urged in their assignments of errors. The effect of this judgment was to establish in Sawyer the legal title in trust for the appellees in this case, and the other preferred creditors, to the sum that Cooper Co. subsequently paid in satisfaction and discharge of this judgment. And they knew, and so did Sawyer, that when they sued out the garnishment process on the theory that the money paid in discharge of this judgment was the property of Kline, that such assertion was fictitious, and that if the effort to acquire the fund would be successful, it would practically amount to a legal fraud upon the rights of the appellees and the other preferred creditors. The appellees and those creditors were not parties to the case when that judgment was rendered, and it was the duty of Sawyer, as the trustee, to plead and assert the true facts with reference to their rights, and urge them in the trial court; but it does not appear from the evidence in the record that the full nature of the rights of the appellees and the other preferred creditors was made known to the trial court in the garnishment proceedings, and that it passed upon that question. Cooper Co., by virtue of the previous judgment that had been rendered against them in the District Court of Hamilton County, were precluded in the garnishment proceeding from assailing the validity of the deed of trust executed by Kline for the benefit of the appellees on the ground of fraud and that the beneficiaries there named had not accepted its terms. These matters were adjudicated against Cooper Co. in that judgment; and we are constrained to the opinion that if Sawyer and Cooper Co. had made known to the trial court in the garnishment proceeding, and developed this branch of the case, and the rights of the appellees thereunder, that that court would not have held the fund garnisheed as the property of Kline Co. and subjected it to the debt of Cooper Co.

We find no error in the record and the judgment is affirmed.

Affirmed.