Colby v. McClendon

• Decision Date: 25 April 1938
• Docket Number: No. 4895,4895
• Citation: 116 S.W.2d 505
• Parties: COLBY et al. v. McCLENDON et al.
• Court: Texas Court of Appeals

116 S.W.2d 505

COLBY et al. v. McCLENDON et al.

No. 4895

Court of Civil Appeals of Texas. Amarillo.

April 25, 1938.

COPYRIGHT MATERIAL OMITTED

Appeal from District Court, Tarrant County; A. J. Power, Judge.

Garnishment suit by Annie McClendon and another against the Tarrant County Building & Loan Association and another, as garnishees, based upon a judgment procured by the plaintiffs against J. H. Colby. From the judgment, J. H. Colby and another appeal.

Affirmed.

Eugene T. Adair and John Hancock, both of Fort Worth, for appellants.

E. E. Glasco, of Purcell, Okl., and McLean & Scott and Glover Johnson, all of Fort Worth, for appellees.

STOKES, Justice.

This is a garnishment suit filed by appellee, Annie McClendon, against Tarrant County Building & Loan Association and Houston Building & Loan Association, domestic corporations, as garnishees, based upon a judgment procured by appellee against J. H. Colby in the district court of Tarrant county on the 2d of November, 1931. That judgment was based upon a foreign judgment that had been procured in the district court of McClain county, Okl., by appellee against Colby on October 29, 1915, in the sum of $8,000, with interest at the rate of 6 per cent. per annum. The Oklahoma judgment was rendered in an action for damages alleged to have accrued to appellee as the surviving wife of T. L. McClendon who, she alleged, was murdered by J. H. Colby on August 19, 1911, and the judgment affirmed by the Supreme Court of Oklahoma on April 4, 1922. Colby et al. v. McClendon, 85 Okl. 293, 206 P. 207, 30 A. L.R. 196.

Colby was a practicing physician at Purcell, Okl., and owned a large number of tracts of land in McClain and other counties, all of which, on November 18, 1911, some three months after McClendon was killed, he conveyed to his wife, Lula O. Colby; the deeds reciting a consideration of "one dollar and love and affection." Dr. Colby continued the management of all of the property, collecting the rents and revenues therefrom, which he deposited in various banks in the name of his wife, and on numerous occasions tenants of the various farms and city property would make deposits of rents which were credited to her account.

The Tarrant County Building & Loan Association filed its amended answer February 26, 1937, in which it alleged that on or about the 1st of January, 1931, for a consideration of $5,500, it issued to "L. O. Colby and/or J. H. Colby of Purcell, Oklahoma," a certificate of 55 shares of its fully paid, nonassessable investment stock, and that on or about October 5, 1926, for the sum of $1,000 to it paid by Lula O. Colby, and upon an application signed by her, it issued to her what is known as its advance paid certificate No. 2203 for 20 shares of its stock of the face value of $2,000, which, it alleged, was, at the time of filing the answer, of the net credit value of $1,440.63.

On the same day, February 26, 1937, the Houston Building & Loan Association filed its amended answer to the writ of garnishment in which it alleged that on August 3, 1929, its stock certificate No. 15437, representing 100 shares of its capital stock, was issued to "L. O. Colby or J. H. Colby of Purcell, Oklahoma." Both garnishees alleged substantially that they had no way of knowing the relationship between J. H. Colby and L. O. Colby, nor whether the certificates of stock belonged to Lula O. Colby as her separate property or to J. H. Colby and, therefore, could not safely determine whether the certificates were subject to the writs of garnishment or not. For this reason they prayed that Lula O. Colby and J. H. Colby be cited to appear and answer, setting forth their respective claims and rights of ownership in the various certificates of stock standing in their names.

Dr. Colby and his wife, L. O. Colby, intervened in the garnishment suit, setting up the ten years' statute of limitations; denying generally the allegations in appellees' pleadings in the garnishment suit; and alleging that the capital stock was the separate and individual property of L. O. Colby, and that Dr. Colby owned no interest whatever in it.

Appellee Mrs. McClendon filed an answer to the pleadings of Colby and wife in which she set up the judgment obtained in the district court of Tarrant county on November 2, 1931, in which the validity of the Oklahoma judgment constituting the basis of the Tarrant county district court judgment was distinctly and specifically upheld, and that J. H. Colby had, at all times since its rendition, been indebted to her in the sum of $8,000, with interest from October 29, 1915, at the rate of 6 per cent. per annum.

The cause was submitted to the court without the intervention of a jury, and on the 23d of March, 1937, judgment was rendered to the effect that J. H. Colby was the owner of all of the capital stock involved and subjecting same to the judgment of appellee, making suitable provision for its sale and the application of the proceeds, to which Dr. Colby and his wife excepted and gave notice of appeal.

The case is presented in this court upon five assignments of error, the first two of which assert that the trial court did not have authority to enter judgment in the garnishment case because there was no valid judgment in the main case which constituted the basis of the garnishment suit; the contention being that the judgment rendered in the main case was void for want of jurisdiction. The judgment in the main case recites that the garnishees had filed answers in the garnishment case to the effect that they each held funds or properties in their possession which may belong to defendant J. H. Colby. Appellants assert that such indefinite allegations were not sufficient as a basis for the court to assume jurisdiction in the main case over a nonresident of the state who had been served only with notice to serve nonresident defendants. We understand the grounds of this contention to be that, because the trial court had not procured definite jurisdiction over specific property in the garnishment proceeding, it had no jurisdiction to render judgment in the main case against the defendant in garnishment and, the judgment in the main case showing upon its face that the answers of the building and loan associations admitting only that the capital stock represented by the certificates may possibly belong to the defendant in garnishment, and failing to show upon its face that the court had acquired jurisdiction over property which certainly and positively did belong to the defendant in garnishment, the judgment was therefore void and could not form the basis of the garnishment proceeding. There is no merit in these contentions, and they are overruled. It has been held that when a garnishment application is filed in connection with a suit against a nonresident, and the garnishee answers even denying that he has in his possession any property whatever of the defendant in judgment, the court acquires jurisdiction of the entire matter for the purpose, not only of rendering judgment upon the writ of garnishment when the facts have been adjudicated and the property found to belong to the defendant in judgment, but also to render judgment in the main case against the defendant in judgment. If jurisdiction is acquired under that kind of writ and answer, a fortiori it is acquired in a case wherein the garnishee admits in his answer that he has in his hands property which may belong to the defendant.

The basis of the jurisdiction which the court may assume over a nonresident is the garnishment against a resident of the state. If the garnishee answers to the effect that he has property in his hands belonging to the defendant, the court thereby acquires jurisdiction of the nonresident defendant to the extent that judgment may be rendered in rem for the value of the property in the hands of the garnishee. This jurisdiction cannot be defeated by a garnishee denying he is indebted to the defendant or has property in his hands belonging to the defendant, nor by filing an answer that is indefinite in that regard. If it were so, the jurisdiction of the courts would be placed in the hands of garnishees, either to confer it by an answer to the effect that they are indebted to the defendant, or defeat it by simply filing an answer to the effect that they are not so indebted and do not have in their hands property belonging to the defendant. Jurisdiction of the courts in garnishment proceedings does not rest upon so precarious a foundation. When a garnishment is filed against a resident garnishee, the court acquires jurisdiction over both the garnishee and the nonresident defendant to the extent of the value of the property in the hands of the garnishee. The court may then proceed to a trial of the issues, and if it be found the garnishee does have in his hands property belonging to the defendant, or is indebted to the defendant in some amount, the court has jurisdiction to render judgment accordingly. If, in the investigation, the court should find the garnishee is not indebted to the defendant, then the power of the court further to proceed against the defendant is ended, but it cannot be said the court did not have jurisdiction to try the issues and render judgment in accordance with the facts. Austin Nat. Bank v. Bergen, Tex.Civ.App., 47 S.W. 1037; Studebaker Harness Co. v. Gerlach Mercantile Co., Tex.Civ.App., 192 S.W. 545, and authorities there cited.

Under the fifth assignment of error appellants assert that error was committed by the trial court in rendering judgment in favor of appellee for the reason that it was not shown by a preponderance of the evidence that the capital stock was issued to Mrs. Colby in whole or in part in pursuance of a scheme between her and Dr. Colby to place the title of the capital stock in Mrs. Colby for the purpose of defrauding the creditors of Dr. Colby. We do not understand the law requires an allegation or showing that, in order to be the subject...