Brown Shoe Co. v. Shor

Plaintiff in error sued out a writ of garnishment against defendant in error in the county court at law, No. 1, of Dallas county, Tex. Defendant in error answered not indebted, which answer was controverted by plaintiff in error. Upon a trial before the court judgment was rendered in favor of defendant in error and an appeal has been prosecuted to this court.

At the request of plaintiff in error, the trial court filed the following findings of fact and conclusions of law:

"Findings of Fact. "1. Plaintiff is the owner and holder of a valid and subsisting judgment rendered on December 5, 1931, against Head-Hargrove Company, a co-partnership, M. G. Hargrove, C. E. Hargrove and J. W. Head, co-partners therein, which judgment is in the amount of $461.55, with interest at six per cent from the 1st day of January, 1931, all of which amount is ``still unsatisfied.'

"2. On January 8th, 1931, Head-Hargrove Company, M. G. Hargrove, C. E. Hargrove and J. W. Head, acting by their duly authorized agent M. G. Hargrove, executed a Deed of Assignment of all of its and their property not exempt from execution, to J. I. Shor, for the benefit of its and their creditors, share and share alike, under the terms of Title 12 of the 1925, R.C.S. of Texas, pertaining to assignments for the benefit of creditors.

"Acting under the authority of such deed J. I. Shor, as such assignee, took possession of all such assets and property of Head-Hargrove Company, M. G. Hargrove, C. E. Hargrove and J. W. Head, jointly and individually, not exempt from execution, and proceeded to convert same into cash at public sale after advertising such sale in the newspapers. At such sale all of such assets were sold for the sum of $5,105.00 cash. Fixtures at Brownfield and at Quitaque, valued at $1742.00 were turned over to the landlords in settlement of rent claims.

"The amount of unsecured indebtedness of such partnership and such individuals at the date of such assignment was $17,468.00. Subsequently a dividend in the sum of fifteen per cent of the claims was paid to such accepting creditors and at the time of the institution of this cause of action garnishee had in his hands the sum of $918.26, being the balance remaining in his hands derived from the sale of the assets conveyed by said partnership and said individuals.

"3. Each of said individual assignors had a homestead, household furniture and fixtures and wearing apparel and an automobile which were exempt from execution and were not conveyed by the deed of assignment.

"4. J. I. Shor, as such assignee, did not file any bond in Dallas County where he resided, or in the Counties where the property of the individuals or partnership was located, nor did he cause any advertisement of his qualification as assignee under the assignment to appear in any newspaper in the County of his residence or in the County of the residence of either of the partners or partnership or where the property was located. Said Shor, however, sent a letter to each creditor listed by the assignors setting forth the making of such assignment, a statement of the assets and liabilities of the assigned estate and a notice of the public sale at which said property was sold, a copy of which letter was received by plaintiff herein.

"5. Plaintiff although listed by assignors as an unsecured creditor and being of the same class as the accepting creditors, refused to accept under said assignment and filed suit against the partnership and individual members, in which suit the aforesaid judgment was rendered in its favor on December 5, 1931."

"Conclusions of Law. "1. The deed of assignment of J. I. Shor, executed by Head-Hargrove Company, a copartnership, and its individual members, M. G. Hargrove, C. E. Hargrove and J. W. Head, as above set forth, was sufficient to pass title to all of its and their assets not exempt from execution to J. I. Shor, for the benefit of its and their creditors.

"2. The failure of the assignee to give bond and to advertise his qualifications as such assignee, does not invalidate the assignment, such provisions of the statute being directory only.

"3. Title 12, of the 1925 R.C.S. of Texas [articles 261-274] being valid, the assignment was sufficient to pass title to all of the assets of Head-Hargrove Company and the individual partners thereof to J. I. Shor and he held such assets and the proceeds derived therefrom as assignee for the benefit of creditors in trust for such creditors.

"4. The fund of $918.26 so held by defendant, J. I. Shor, as assignee for the benefit of creditors, of Head-Hargrove Company and the individual partners thereof was not subject to garnishment by plaintiff as judgment creditor to said partnership and said individuals."

Plaintiff in error assigns error: (1) That the court erred in finding that Head-Hargrove Company, M. C. Hargrove, C. E. Hargrove, and J. W. Head executed a deed of assignment for the benefit of their creditors under the terms of title 12 of the 1925 Revised Civil Statutes; (2) that the court erred in finding that defendant in error was acting under the authority of such deed of assignment; (3) that the court erred in concluding as a matter of law that the deed of assignment was sufficient to pass title to defendant in error; (4) that the court erred in concluding as a matter of law that the provision of the statute as to the qualifying of an assignee was directory only; (5) that the court erred in concluding as a matter of law that defendant in error held the assets of the Head-Hargrove Company as assignee for the benefit of creditors under the provision of said title 12; (6) that the court erred in concluding as a matter of law that the sum of $918.26 was held by the defendant in error as assignee for the benefit of creditors; and (7) that the court erred in rendering judgment against plaintiff in error because title 12 of the Revised Civil Statutes was invalid, being in conflict with article 1, § 8, clause 4, of the Constitution of the United States.

The title in question is not an insolvency law, Keating v. Vaughn,61 Tex. 518, 524, and is not in conflict with or suspended by the National Bankruptcy Law (11 USCA). Star v. Johnson (Tex.Civ.App.) 44 S.W.2d 429, writ of error refused (Tex. Sup.) 47 S.W.2d 608; Patty-Joiner Eubank Company v. R. B. Cummins, 93 Tex. 598, 57 S.W. 566; Dodgion v. J. M. Radford Grocery Co. (Tex.Civ.App.) 50 S.W.2d 837.

Unless for some other reason the assignment was invalid, the funds in the hands of the assignee were not subject to garnishment. Star v. Johnson, supra, and authorities cited.

The remaining contention of plaintiff in error is that the assignee's failure to file a bond in Dallas county, where he resided, or in the counties where the property of the individuals or partnership was located, and his failure to advertise his qualification as assignee under the assignment in a newspaper in the county of his residence or of the residence of either of the partners or of the partnership or in the county where the property was located, entirely invalidated the assignment and left the title in the assignors, and, therefore, subject to garnishment.

In its assignments of error it questions the findings of fact made by the trial court, but there having been no statement of facts filed with the record, we must accept the findings as made and limit our consideration of validity of the assignment to the facts above enumerated. As said by the Supreme Court in Foreman v. Burnette,83 Tex. 396, 18 S.W. 756, 759, in upholding the validity of an assignment where the assignee was not a resident of the county in which the assignor resided: "It has been held that the omission of property from the inventory, the failure to annex an inventory, the failure to include all of the creditors in the schedule, and the failure of the assignee to file a bond, will not avoid the assignment."

In view of the provision of the statute itself (article 266, R.S. 1925), the holding of the Supreme Court in Windham v. Patty Matthews,62 Tex. 490, and the above expression of the Supreme Court in Foreman v. Burnette, the assignment was not avoided by failure of the assignee to file his bond. See, also, In re Freeman (C.C.A.) 35 F.2d 952.

If an assignment would not be avoided by the assignee's failure to file his bond and by a failure to comply with other requirements of the statute, such as those above enumerated, then we fail to see how a failure to give notice of his appointment in the newspapers could be so held, especially where, as here shown by the findings of fact, plaintiff in error received a letter from the assignee notifying it of the assignment.

The judgment of the trial court is affirmed.