Taylor v. Gillean

• Decision Date: 01 January 1859
• Citation: 23 Tex. 508
• Parties: DAVID TAYLOR ET AL. v. WILLIAM C. GILLEAN ET AL.
• Court: Texas Supreme Court

23 Tex. 508

DAVID TAYLOR ET AL.

v.WILLIAM C. GILLEAN ET AL.

Supreme Court of Texas.

1859.

Effects in the hands of a receiver appointed by the court, are not subject to the process of garnishment.

Notes and accounts cannot be levied on and sold; and, therefore, are not liable to garnishment. 21 Tex. 614;26 Tex. 283.

An intervenor in an injunction suit, cannot successfully oppose the dissolution of the injunction, unless he have made out a case which entitles him to one; and he must have given bond, and verified his petition by affidavit.

Pending a motion against a receiver, to enforce the observance of an order dissolving an injunction, and restoring to the defendants the property in his hands, which is resisted by him, on the ground that a petition has been filed by intervenors, to subject the property to their debt (the court having intimated its opinion upon the sufficiency of the petition of the intervenors), it is not an improper exercise of judicial discretion, to refuse the intervenors leave to amend, and, upon motion of the defendants then filed, to dismiss their petition.

Whether equity will assist a creditor to reach the choses in action of his debtor, not tangible by legal process, examined, and authorities discussed, but left undecided.

If the power of a court of equity can be invoked in such a case, it is only where the petition shows that all legal remedies have been exhausted.

Where debts have been assigned, the debtors may be garnished, and the assignee made a party, to contest the validity of the assignment.

APPEAL from Anderson. Tried below before the Hon. John H. Reagan.

This suit was commenced on the 12th of March, 1856, by John Shackleford against William C. Gillean, John E. Smith, Reuben A. Reeves, and William A. Van Alstyne, as to the latter of whom it was, by consent, dismissed at the ensuing term of the court.

The plaintiff alleged in his petition, that in the spring of 1855, Gillean and Smith were partners, conducting two mercantile establishments in Anderson county; one at Palestine, in the firm name of W. C. Gillean & Co., the other at Kickapoo, in the firm name of J. E. Smith & Co.; that the said defendants were largely indebted to merchants in the city of New York, who agreed to give them time, if they would settle their indebtedness by drafts drawn in their favor, on the petitioner, and accepted by him, payable at twelve and twenty-four months; and that the plaintiff had accepted such drafts, in consideration of the agreement of the said Gillean and Smith, to secure him against loss on account of the acceptance thereof; to do which, it was agreed, that they should transfer to him an amount of notes and accounts, then due to the said firms, sufficient fully to protect him against the said acceptances first due; and should enter the same in their books, to his credit, and hold them in trust for him; and that they should collect the same in money or cotton, and remit the money collected, and ship the cotton to him at Galveston (where he was engaged in the commission business), for sale, in time to realize funds to meet the said first drafts when due; and should secure the payment of the second drafts, by the notes of certain parties, executed to the plaintiff, and to be held by him as collateral security. That, in pursuance of the said agreement, he had accepted drafts for them to the amount of $10,847.37, and that Gillean and Smith had transferred to him notes and accounts set out in an exhibit to his petition, and had made the entries of the same in their books, in his favor, as agreed upon; but that they had failed and refused to remit the money and cotton collected on the same, as they had agreed; that the first of the drafts had fallen due, and had been paid by the plaintiff; and that Gillean and Smith, combining with the other defendants for the purpose of defrauding him, had assigned and transferred to the said Reeves, in trust for the purpose of paying certain fraudulent and fictitious debts, all the notes, accounts, books, and effects, and property of every character and description, belonging to the said firm of W. C. Gillean & Co.; and that among the effects so transferred, were a large amount of the notes and accounts previously transferred to the plaintiff, and held in trust for him, and also a large amount of other effects, the proceeds of the said trust fund. The plaintiff then prayed, that all the defendants might be enjoined from, in any manner, disposing or making use of any of said property belonging to said firms; that a receiver might be appointed by the court, to whom the defendants should deliver all of the said property, notes, accounts, books, etc., who should collect the same, and apply the notes and accounts transferred to him, and effects into which any of them had been changed (as to which a discovery was prayed) to the payment of what was due to the said plaintiff on account of the drafts paid by him, and the others, when due.

The injunction was granted, and a receiver appointed as prayed for, to whom the defendant Reeves delivered all of the property and effects transferred to him by Gillean and Smith.

At the next term of the district court, which commenced its session two days after the filing of the said petition, the defendants appeared, and moved the court to dissolve the injunction, and restore the property placed, by its order, in the hands of the receiver. This motion was sustained as to all the property (except such of the notes and accounts as had been transferred to the plaintiff) that might be in the hands of the receiver; and with this exception, the receiver was ordered to restore the effects delivered to him.

In the meantime, however, and during the same term of the court, the appellants, David Taylor, Henderson & Gaines, and Gregory & Co., had each recovered judgments for large amounts, against the said firms of W. C. Gillean & Co., and J. E. Smith & Co., and caused writs of garnishment to be issued upon each of their judgments to A. E. M'Clure. And the appellants, as judgment creditors, filed in this cause, their petition as intervenors, in which they charged that Gillean and Smith were insolvent; that they were creditors before the execution of the assignment to Reeves; that the same was fraudulent, and made to delay and hinder them in the collection of their debts; and that the pretended debts, to secure the payment of which the assignment purported to be made, were without consideration. It was further alleged, that the said intervenors had had writs of garnishment served upon the receiver, who, it was prayed, might be permitted, by order of the court, to answer what effects belonging to the said Gillean and Smith, were in his hands; and that he should retain and collect the same, and apply them (except so much thereof as the plaintiff, Shackleford, should be entitled to) in payment of their debts.

This petition was not, however, sworn to, nor was an injunction asked, or a bond tendered.

On a subsequent day of the same term of the court, the plaintiff, Shackleford (in which he was joined by the intervenor, Taylor, for himself, and on behalf of the other intervenors), filed an application, asking the court to review its order, partially dissolving the injunction; and that the same should be set aside, and the receiver directed to retain all of the said effects in his hands for collection, subject to the future order of the court. This application was refused, and the case continued until the next term; not having been filed in time to stand for trial at that term, and the defendants not having answered.

At the next term of the court, the defendants filed their answers to the merits, and also a motion setting forth, that the receiver had not complied with the order of the court, by restoring the effects delivered to him, etc., and asking that he should be compelled by the court, to comply with the order.

The receiver answered, that he had not restored the effects, etc., as directed in the said order, because the intervenors had caused writs of garnishment to be served upon him, and had filed their petition as intervenors, in this case; and praying that he might be permitted to answer the said writs, which he asked might be taken as a part of his answer to the motion.

To this answer the defendants filed exceptions, upon the argument of which, the court intimated an opinion, that the petition of the intervenors was insufficient to entitle them to the relief sought; that it should have been sworn to, and an injunction bond tendered: whereupon, the intervenors asked for a sufficient time to amend their petition, so as to comply with the views intimated by the court; and that the ruling of the court on the motion might be suspended for that purpose. This was refused, and the receiver was, by order of the court, directed within two days, to comply with the order made at the former term, and restore the effects in his hands: and exceptions then filed by the defendants, to the petition of the intervenors, were sustained, and their petition dismissed. To which several rulings of the court the intervenors excepted.

John E. Cravens, for the appellants. The object of this suit was, to subject so much of the property of the debtors, in the hands of the receiver, as was not subject to the claim of Shackleford, to the payment...