Amarillo Nat. Bank v. Sanborn

• Decision Date: 27 June 1914
• Docket Number: (No. 637.)
• Citation: 169 S.W. 1075
• Parties: AMARILLO NAT. BANK v. SANBORN et al.
• Court: Texas Court of Appeals

169 S.W. 1075

AMARILLO NAT. BANK v. SANBORN et al.

(No. 637.)

Court of Civil Appeals of Texas. Amarillo.

June 27, 1914.

On Motion for Rehearing, October 10, 1914.

Appeal from District Court, Potter County; Jas. N. Browning, Judge.

Suit by the Amarillo National Bank against William Harrell and others. From a judgment for defendants, plaintiff appeals. Affirmed in part, and in part reversed and rendered.

A. A. Lumpkin, of Amarillo, for appellant. Madden, Trulove & Kimbrough, Jno. W. Veale, W. Boyce, and Gustavus & Jackson, all of Amarillo, for appellees.

HALL, J.

Appellant bank filed this suit on the 20th day of August, 1912, and applied for a writ of garnishment, claiming an indebtedness against William Harrell, in the sum of $4,058.30, evidenced by a note dated February 1, 1909, bearing interest from date at the rate of 10 per cent. per annum, and providing for 10 per cent. attorney's fees. It is alleged that said note had a credit of $2,000, paid March 9, 1909, and bore indorsement showing interest paid to May 26, 1909; and the action was further based upon one note executed by appellee William Harrell, in the sum of $300, dated March 22, 1909, due July 22, 1909, with interest after maturity at 10 per cent., and providing for 10 per cent. attorney's fees. Writs of garnishment were issued August 20, 1912, and served upon appellees Ellen M. Sanborn, H. G. Hendricks, and W. Boyce on August 21st and August 24th, respectively. On December 9, 1912, the defendant William Harrell, as principal, with H. G. Hendricks, Al Popham, and W. Boyce, as sureties, executed and delivered his replevin bond to the clerk of the district court, replevying the moneys and properties impounded by said writs of garnishment, executing said bond in the sum of $7,300.

It appears that prior to July 12, 1910, appellee Harrell was the owner of a certain note in the sum of $10,000, signed by O. H. Nelson. Prior to said date Harrell employed H. G. Hendricks and W. Boyce, as attorneys, to prosecute the claim to judgment, and agreed that, as compensation for their services, they should have a one-fourth interest in the claim. On the above date judgment was obtained on this debt. Thereafter executions were issued on this judgment and levied upon the interest of O. H. Nelson in certain lands in Hartley and Oldham counties. The lands so levied upon were bought in at execution sale by appellee Harrell. After the sales and crediting the amount of Harrell's bid thereon, a balance remained unpaid on said judgment. Prior to March 2, 1912, Harrell had become indebted to Popham on two personal notes, one for $295.50 and the other for $136.50, and Popham was surety for Harrell on one note for $780 and one for $1,000, payable to the First National Bank of Amarillo, Tex., and on two notes for $1,385.65, payable to the Drumm Commission Company of Kansas City, Mo.

October 22, 1913, the garnishees H. G. Hendricks and W. Boyce filed their answer to the writs of garnishment, alleging that they were not indebted to the defendant Harrell unless the facts set forth in said answer would constitute such indebtedness. They alleged, in substance, that on the 10th day of December, 1912, in accordance with the terms of a certain contract made and entered into by and between William Harrell, H. G. Hendricks, and W. Boyce, as parties of the first part, and Ellen M. Sanborn, as party of the second part, dated the 17th day of July, 1912, and duly signed and executed prior to the service of the writ of garnishment herein, the said Ellen M. Sanborn paid to William Boyce the sum of $4,003.33, that being the balance due on said contract, there having been paid thereon the sum of $1,000 at the time of its execution prior to the service of the writ of garnishment; that at such time, as a condition of such payment, the said Boyce delivered to the said Ellen M. Sanborn the deed and assignment of judgment mentioned in said contract, as well as a release of a deed of trust on a three-fourths interest in the land described in said deed, executed by Al Popham and F. W. Popham, and deposited for delivery upon the payment of the amount due on said contract. It is further alleged that the said Boyce and Hendricks owned an interest in said fund paid by the said Ellen M. Sanborn, amounting to $1,089.06, and facts are stated which, if true, entitle them to receive such sum for their services as attorneys in representing appellee Harrell in the suit against Nelson. It is further alleged that Harrell and Al Popham representated to them that the interest of William Harrell in said fund had been assigned to Popham and after the writs of garnishment were served Mrs. Sanborn refused to pay the money under said contract, and that the garnishees Hendricks, Boyce, and Popham became sureties for Harrell in the execution of the replevin bond mentioned above; that upon the filing of said bond Hendricks and Boyce had obtained possession of the fund, and had retained $1,089.06 and delivered $2,914.27, the remainder thereof, to Al Popham, as authorized by an order in writing, signed by William Harrell, directing the said Boyce to make such payment. Attached to this answer, and forming a part of it, was the contract made and executed by Mrs. Sanborn, William Harrell, H. G. Hendricks, and W. Boyce, mentioned above. It provides for the sale and conveyance to Mrs. Sanborn by the other parties thereto of the Nelson judgment, described as having been rendered in the district court of Potter county, in the sum of $10,375, and interest, and credited with $4,000, paid for certain lands in Oldham and Hartley counties. The provisions of this contract material to the determination of this controversy are as follows:

"First. The said William Harrell has sold and conveyed and, at the time of executing this contract, makes and executes his special warranty deed of conveyance to the said Mrs. Ellen M. Sanborn of all his right, title, and interest in and to the lands aforesaid, in Hartley and Oldham counties, Tex., conveyed by Edward F. Swift to O. H. Nelson, and also has sold and this day makes and executes an assignment and transfer to the said Mrs. Ellen M. Sanborn of the judgment aforesaid and the balance due and owing thereon against the said O. H. Nelson for the consideration of $5,000.00 paid and to be paid, as herein specified."

"Third. The consideration hereinbefore mentioned is to be paid as follows: $1,000.00 in cash, the receipt of which is hereby acknowledged, and remaining $4,000.00 to be paid, at least one-half thereof, within thirty days from the date hereof, and the remaining $2,000.00 on or before November 1, 1912; but in the event any part of said $4,000.00 is not paid within thirty days from the date hereof, such unpaid sum shall bear interest therefrom at the rate of 10 per cent. per annum, such payment to be made at Amarillo, Tex.

"Fourth. The deed of conveyance and transfer of the judgment aforesaid are placed in the possession and are retained by the said William Boyce, until the consideration herein provided for is fully paid. Whereupon he shall make delivery of said deed and transfer to the said Ellen M. Sanborn, or her duly authorized agent, and the said William Boyce has authority to receive and receipt for the payments herein to be made by the said Mrs. Ellen M. Sanborn.

"Fifth. The said Mrs. Ellen M. Sanborn agrees to make the payments herein provided for, but she does not assume the payment of any costs that might be adjudged against the said William Harrell in said suit."

It appears, after Harrell had obtained the sheriff's deeds to the Nelson lands, he, on March 2, 1912, executed to Francis Popham, as trustee, deeds of trust upon a three-fourths interest in said lands, to secure his indebtedness to Al Popham, as well as to secure the said Popham against loss as his surety. The pleadings of Popham show that, in order to consummate the sale of the judgment, as provided for in the above-quoted contract, it became necessary for Harrell to procure a release of the deeds of trust from Al Popham; that Popham agreed to, and did, execute the release with the understanding that it should be delivered to Boyce, to be held by him and delivered with Harrell's deed to Mrs. Sanborn, upon payment by her of the money due under the contract; that the interest of Harrell in the funds coming from Mrs. Sanborn should be paid to Al Popham by Boyce, in place and in lieu of the deeds of trust and lien held by Al Popham. Popham alleges that long prior to the service of the writs of garnishment Harrell assigned to him his interest in the fund to be derived from Mrs. Sanborn, and that such assignment was made for the purpose of securing Harrell's indebtedness to Popham and Popham as surety on the notes to the First National Bank of Amarillo and the Drumm Commission Company, and that by reason thereof he was the owner of the fund paid to him by Boyce, and that Harrell never owned any interest therein subject to garnishment.

By her answer Mrs. Sanborn did not admit that she owed Harrell the money, but alleged it to be due to the parties of the contract, under the terms thereof, and made the said contract a part of her answer.

Appellant admitted that Hendricks and Boyce were entitled to have the money received by them out of the Sanborn fund, but filed a reply to Popham's pleadings, alleging that Harrell was notoriously insolvent on March 2, 1912, at the time of the execution of the deeds of trust, and that such deeds were executed solely for the purpose of placing the property of the said Harrell beyond the reach of his creditors, and that Popham knew of this purpose at the time; that if plaintiff was mistaken as to this, and that said deeds of trust were valid and subsisting liens on the interest of Harrell in said land, then that said deeds of trust were released in consideration of $750 paid to intervener Popham, and that they were based upon a valuable consideration, and that from and after the...