Armstrong v. Ames & Frost Co.

• Decision Date: 30 October 1897
• Citation: 43 S.W. 302
• Parties: ARMSTRONG v. AMES & FROST CO. et al.<SMALL><SUP>1</SUP></SMALL>
• Court: Texas Court of Appeals

43 S.W. 302

ARMSTRONG v. AMES & FROST CO. et al.¹

Court of Civil Appeals of Texas.

October 30, 1897.

Appeal from district court, Tarrant county; W. D. Harris, Judge.

Action by Marvin B. Armstrong, assignee for benefit of creditors of the F. H. Collins Company, a corporation, against the Ames & Frost Company and others, for the value of a stock of goods attached by defendant company as the property of plaintiff's assignor. From a judgment in favor of defendants, plaintiff appeals. Affirmed.

R. W. Flournoy, for appellant. Humphreys & McLean, for appellees.

Statement of the Case, with Conclusions of Fact.

TARLTON, C. J.

On December 24, 1894, the Ames & Frost Company brought suit against the F. H. Collins Company, a private corporation organized under the laws of the state of Texas, and conducting a mercantile business in the city of Ft. Worth. Plaintiff caused a writ of attachment to be levied upon the property of the F. H. Collins Company. One H. H. Fulton, the agent of the Ames & Frost Company, made the affidavit in attachment; alleging an indebtedness in the principal sum of $9,673.19, and in the further sum of $127.61 interest, and further alleging, among other matters not necessary to mention, "that said defendant has disposed of its property, in part, with intent to defraud its creditors." The writ of attachment was levied upon the entire stock of merchandise, store fixtures, and furniture belonging to the F. H. Collins Company; the property being invoiced by the sheriff at the sum of $16,952.03, and its value assessed by that officer at $8,476. The property was subsequently sold, under an order of sale issued in the cause, and bought by Ames & Frost Company, for the sum of $6,600. Afterwards judgment, with foreclosure of attachment lien, was recovered, in the sum of $10,022.88 and costs, which was credited with the proceeds of the property previously sold. On December 28, 1894, the F. H. Collins Company executed to Marvin B. Armstrong a general assignment, exacting releases, under the provisions of title 7a, Sayles' Civ. St. The assignee (appellant herein) on January 26, 1895, brought this suit against the Ames & Frost Company and the sureties on its attachment bond to recover the value of the stock of goods which had been attached; alleging that the property had been wrongfully seized and converted by means of the attachment, and that the affidavit for attachment, in so far as it charged that the F. H. Collins Company had disposed of its property, in part, with intent to defraud its creditors, was untrue. A trial of the case, had on November 28, 1896, resulted in a verdict and judgment for the defendants (appellees in this court). The jury, in their verdict, sustained the allegation in the attachment affidavit that the F. H. Collins Company had disposed of its property, in part, with intent to defraud its creditors; and, as this finding rests upon sufficient evidence, we are constrained to approve it.

Opinion.

The finding by the jury adverse to the appellant on the paramount issue of fact, concerning the fraudulent disposition by the F. H. Collins Company, as charged in the affidavit for attachment, will require an affirmance of the judgment, unless error prejudicial to the appellant was committed by the court in its instruction to the jury, or in its action regarding the admission of evidence. Hence we proceed to consider the several assignments of error complaining of the court's action in the respects indicated:

1. In submitting the issue of the fraudulent disposition by the F. H. Collins Company of its property, as charged in the affidavit for attachment, the court in its principal charge, gave the following instruction: "You are instructed that Ames & Frost Company, by its contract with F. H. Collins Company, under which it sold goods to F. H. Collins Company, had no lien on the wheels sold by it to F. H. Collins Company; and if you believe from the evidence in this case that said Collins Company made no other disposition of the wheels bought by it from Ames & Frost Company than to apply the proceeds of the same to the payment of its just debts, whether the debts owing to Ames & Frost Company, or to any other person or persons, and did not dispose of any of them with any intent to defraud Ames & Frost Company, nor any other creditor, and find, also, that it had not, prior to the time the attachment was sued out, disposed of any of its other property, other than what it obtained from Ames & Frost Company, with intent to defraud any of its creditors, then you will, in answer to the first question, find that the affidavit was untrue at the time it was made." In connection with this instruction, the court granted the following special charge requested by the appellee: "You are charged that any act done by a debtor with the intention to hinder or delay his creditor in the collection of his debt, owing by the debtor to the creditor, and which has that effect, is a fraud on the rights of the creditor. If, in this case, you find that F. H. Collins Company had disposed of any notes or money, the same being the proceeds of the sales of goods of the Ames & Frost Company under the contract which has been introduced in evidence, otherwise than is provided in said contract, and you further find that said F. H. Collins Company intended, by such disposition of said notes or money, to hinder or delay or prevent said Ames & Frost Company from collecting their debt, then the affidavit for attachment would be true, and you will so find." In this connection the court also refused a special instruction requested by the appellant to the effect that, in order to find for defendants on the issue as to whether or not the ground for attachment as alleged in the affidavit existed, the jury must believe from the evidence that the F. H. Collins Company disposed of some portion of its property with intent to defraud its creditors, and that if said F. H. Collins Company did not dispose of any portion of its property with such intent, the jury should find for plaintiff on such issue, though they might believe from the evidence that said F. H. Collins Company failed to comply with its contract with the Ames & Frost Company, and disposed of goods bought from said Ames & Frost Company, to other persons, with no intention or purpose to pay the Ames & Frost Company therefor.

We overrule the tenth and eleventh assignments of error, first urged in the appellant's brief, complaining of the action of the court in granting the special instruction requested by the appellees, and in refusing that requested by the appellant. The propositions of the latter, in so far as they were proper, were covered by the main instruction hereinabove quoted. The evidence tended to raise the issue presented by the special instruction of the appellees. The first proposition embodied therein should, in its application, be referred to the facts stated in its concluding proposition. The evidence upon which the special instruction rests consisted in the contract between the F. H. Collins Company and the Ames & Frost Company, admittedly executed February 2, 1894, and upon the testimony of the agent of the latter company, tending to show that, in violation of the terms of the contract, the F. H. Collins Company had appropriated the goods referred to in the instruction to a purpose other than that specified in the contract, and with the intention to hinder, delay, or prevent the appellee from collecting its debt. By the terms of this contract, it appeared that in consideration of an order for bicycles, to be shipped during the season of 1894 by the appellee to the F. H. Collins Company, and of an agreement by the appellee to give to the F. H. Collins Company an agency for the sale of Imperial wheels for 1894, the F. H. Collins Company undertook to give to the appellee on the 1st of each month a three-months note, bearing 8 per cent. interest, for all goods shipped the previous month; that, as collateral security to the notes thus given, the F. H. Collins Company further undertook to give to the appellee, as soon as received, all first-due customers' notes received for sales of the machines, and all cash received on such sales, the cash to be not less than $25 for each wheel; that these customers' notes were to be made payable, by the indorsement of the F. H. Collins Company, to the order of the Ames & Frost Company, and were to be forwarded to the Ames & Frost Company as soon as received by the F. H. Collins Company; that the Ames & Frost Company were to indorse such paper for collection to the F. H. Collins Company, which undertook...