Celanese Coating Co., Devoe Paint Division v. Soliz

• Decision Date: 30 August 1976
• Docket Number: No. 1098,1098
• Citation: 541 S.W.2d 243
• Parties: CELANESE COATING COMPANY, DEVOE PAINT DIVISION, Appellant, v. Oscar SOLIZ, Appellee.
• Court: Texas Court of Appeals

Page 243

541 S.W.2d 243

CELANESE COATING COMPANY, DEVOE PAINT DIVISION, Appellant, v. Oscar SOLIZ, Appellee.

No. 1098.

Court of Civil Appeals of Texas Corpus Christi.

Aug. 30, 1976.

Rehearing Denied Sept. 30, 1976.

William H. Berry, Jr., Corpus Christi, for appellant.

C. Edwin Prichard, Jr., County Atty., T. R. Bandy, Jr., Asst. County Atty., Robert W. Dupuy, Wood, Boykin & Wolter, Corpus Christi, for appellee.

OPINION

NYE, Chief Justice.

This is a garnishment case. On May 11, 1973, Celanese Coating Company, Devoe Paint Division, instituted garnishment proceedings against Oscar Soliz, District Clerk of Nueces County, Texas, as Garnishee, seeking funds held by him. The Bank of North Texas intervened and set up a claim to the funds in the possession of the Garnishee. A trial on the merits was had before the court without the aid of a jury. Judgment was rendered on August 29, 1975, which quashed the writ of garnishment previously issued. Celanese hereinafter referred to as appellant-Garnishor, has duly perfected its appeal from that judgment.

This is one of several similar cases which have come before this Court whereby certain parties have, by writ of garnishment, attempted to obtain funds held by the District Clerk, the Honorable Oscar Soliz. See Red Henry Painting Company v. Bank of North Texas, 521 S.W.2d 339 (Tex.Civ.App.--Corpus Christi 1975, no writ); Bank of North Texas v. Red Henry Painting Company, 509 S.W.2d 444 (Tex.Civ.App.--Corpus Christi 1974, no writ).

The Bank of North Texas appellee is the same party that appeared in each of the above two cases. The Honorable Oscar Soliz, District Clerk, will be referred to as 'Garnishee'. In the case at bar, the appellant-Garnishor (Celanese) in its writ of garnishment alleged that it had (in Cause No. 111,185--E on the docket of the District Court of Nueces County, Texas, styled 'Celanese Coating Company, Devoe Paint Division, Intervenor, vs. J. B. Price and Sam Higbee, d/b/a Price Construction Company'), obtained a judgment against J. B . Price and Sam Higbee, d/b/a Price Construction Company, jointly and severally, for $5,905.45, plus six per cent (6%) interest thereon from date of judgment, attorney's fees in the amount of $1,968.00, and court costs; that such judgment was final, valid, and subsisting and remains unsatisfied; that the Garnishee (District Clerk) is indebted to the judgment-defendants (Price & Higbee) by the reason of the fact that on April 10, 1973, a judgment was entered in favor of the judgment-defendants (Price & Higbee) and against Housing Authority of the City of Corpus Christi and Fort Worth Lloyds in Cause No. 111,185--E, (148th District Court of Nueces County) awarding to said judgment-defendants and the Bank of North Texas, the sum of $126,350.41, which judgment is now final; and that said sum has now been paid into the registry of the Court and Garnishee is the Custodian of said funds, and is indebted to the judgment-defendants, J. B. Price and Sam Higbee.

In response to the application for writ of garnishment, the Garnishee answered stating, in substance, that the Garnishee is indebted to Price and Highbee by reason of Cause No. 111,185--E in the amount of $126,350.41, plus some accrued interest; that these funds were paid into the registry of the Garnishee's Court in satisfaction of a judgment signed April 10, 1973, providing, in part, as follows:

'. . . the said sums shall be held by the Clerk of this Court, subject to the following provisions of this judgment:

(a) The sum of $32,989.91 plus interest thereon at the rate of $4.39 per day from the 10th day of April, 1973, shall be paid by the Clerk of this Court to the Department of Treasury-Internal Revenue Service of the United States of America.

(b) The sum of $30,000.00 shall be paid by the Clerk of this Court to Stone & Berryman, Inc., and Michael Thompson.

(c) The sum of $16,850.00 shall be held by the Clerk in the registry of this Court, pending final judgments in Cause No. 117, 352--E, Celanese Coating Company, Devoe Paint Division vs. The Housing Authority of the City of Corpus Christi, et al, and Cause No . 117,345--E, Red Henry Painting Company vs. The Housing Authority of the City of Corpus Christi, et al, on the docket of this Court.

(d) The balance of said funds, including any balance remaining in the registry of this Court out of the fund held under paragraph (c) hereof, shall be paid by the Clerk of this Court to the Plaintiffs herein, J. B. Price and Sam Higbee, doing business as Price Construction Company, and Bank of North Texas, Hurst, Texas.

The appellant-Garnishor, on August 7, 1975, filed with the court its controverting affidavit in response to the Garnishee's answer. In the affidavit, the Garnishor alleged among other things that the Garnishee is not indebted to the Bank because the Bank does not have a valid assignment of any interest in the judgment referred to in Cause No. 111,185--E, and such assignment is specifically prohibited by law; and that the funds which have been deposited into the registry of the Court are by law trust funds under Article 5472e, Tex.Rev.Civ.Stat.Ann. (Supp.) to be held to pay mechanics and materialmen pursuant to a contract which Price Construction Company had with the Housing Authority of the City of Corpus Christi to make certain repairs following Hurricane Celia.

On August 7, 1975, appellant-Garnishor filed with the court a set of interrogatories propounded to the Intervenor, Bank of North Texas . These were apparently served on the Bank's attorney on August 6, 1975. Appellant in said interrogatories required the Bank to answer them on or before August 18, 1975. On August 15, 1975, the Bank-Intervenor objected to the interrogatories requesting that they be quashed asserting, among other things, that pursuant to Rule 168, T.R.C.P., they were entitled to at least fifteen (15) days in which to answer wherein the instructions in the interrogatories called for an answer within twelve days of their service; and that such interrogatories were untimely filed, the case having been on file for over two years. A hearing on the objections was set for August 20, 1975, at which time, the trial court sustained the objections. The appellant-Garnishor then filed a supplemental motion for continuence which was also denied. The case was then called for trial. The appellant-Garnishor announced 'not ready'. On August 29, 1975, after hearing evidence, judgment was entered quashing the writ of garnishment.

Appellant first asserts that the trial court erred in failing to hold that said funds were being held in trust by the Garnishee as trustee for the use and benefit of the Garnishor as a materialman and in failing to enter judgment for the Garnishor in the amount of the judgment in Cause No. 111, 185--E by virtue of Article 5472e, Tex .Rev.Civ.Stat.Ann.

The statute, Article 5472e, referred to by appellant provides in part as follows:

Section 1. All moneys or funds paid to a contractor or subcontractor or any officer, director or agent thereof, Under a construction contract for the improvement of specific real property in this state, and all funds borrowed by a contractor, subcontractor, owner, or any officer, director or agent thereof, for the purpose of improving such real property which are secured in whole or in part by a lien on the specific property to be improved are hereby declared to be Trust Funds For the benefit of the artisans, laborers, mechanics, contractors, subcontractors or materialmen who may labor or furnish labor or material for the construction or repair of any house, building or improvement whatever upon such real property; provided, however, that moneys paid to a contractor or subcontractor or borrowed by a contractor, subcontractor, or owner may be used to pay reasonable overhead of said contractor, subcontractor, or owner, directly related to such construction contract. The contractor, subcontractor, owner, or any officer, director or agent thereof, receiving such payments or funds, or having control or direction of same, is hereby made and constituted a Trustee of such funds so received or under his control or direction.' (Emphasis supplied.)

The trial court found that the final judgment entered in Cause No. 111,185--E in favor of Intervenor (Bank) and Price Construction Company clearly determined the issue of the Intervenor's interest in said funds and established that said funds are jointly owned by Intervenor and Price Construction Company . Among its conclusions of law, the trial court held that the Garnishor (Celanese) had the burden of proving its entitlement to the benefits and protection of Article 5472e which it did not do. The Garnishor had the burden of showing that the money recovered by Price Construction Company and the Bank was recovered 'under a construction contract for the improvement of specific real property in this state', and that it was within the class of persons protected by the statute. Red Henry Painting Company v. Bank of North Texas, supra; Panhandle Bank & Trust Company v. Graybar Electric Company, Inc., 492 S.W.2d 76 (Tex.Civ.App.--Amarillo 1973, writ ref'd n.r.e.). See Exhibit 1 (Second Amended Original Petition in Cause No. 111, 185--E, filed by J. B. Price and Sam Higbee, d/b/a Price Construction Company, and the Bank of North Texas, plaintiffs, against Housing Authority of the City of Corpus Christi and Fort Worth Lloyds Insurance Company, defendants) offered and admitted into evidence shows that the plaintiffs therein sought recovery of money damages for Breach of a written contract, or, in the alternative, on quantum meruit, or implied contract in law. The judgment entered in Cause No. 111, 185--E on April 10, 1973, in favor of Price and Higbee and the Bank, of which a copy was also admitted into evidence, does not state the ground on which it was rendered, whether on breach of contract, or quantum meruit, nor is such ascertainable from the judgment.

The ...