Covington Bros. Motor Co., Inc. v. Robinson

• Citation: 194 So. 663,239 Ala. 226
• Decision Date: 14 March 1940
• Docket Number: 5 Div. 315.
• Parties: COVINGTON BROS. MOTOR CO., INC., v. ROBINSON.
• Court: Supreme Court of Alabama

194 So. 663

239 Ala. 226

COVINGTON BROS. MOTOR CO., INC., v. ROBINSON.

5 Div. 315.

Supreme Court of Alabama

March 14, 1940

Appeal from Circuit Court, Chilton County; Arthur Glover, Judge.

Garnishment suit by Covington Brothers Motor Company, Incorporated, for the use of G. W. Covington, Jr., against Mrs. W. C. Robinson defendant, First National Bank of Clanton, garnishee. From a judgment quashing the writ of garnishment and discharging the garnishee, plaintiff appeals. Transferred from Court of Appeals under Code 1923, § 7326.

Affirmed.

Lawrence F. Gerald, of Clanton, for appellant.

Reynolds & Reynolds, of Clanton, for appellees.

KNIGHT Justice.

This is an appeal from a judgment of the Circuit Court of Chilton County, quashing a writ of garnishment issued against The First National Bank of Clanton, Alabama, and sued out by the Covington Brothers Motor Company, Inc., for the use and benefit of G. W. Covington, Jr., the alleged transferee of a certain judgment obtained by said Covington Brothers Motor Company, Inc., against the appellee. This judgment was rendered by the Circuit Court of Chilton County on April 20 1932.

The garnishee answered admitting that at the time of the service of the writ of garnishment there was on deposit with it the sum of $651.25 to the credit of "Modern Beauty Shop". It would seem that this was the name under which the appellant did business at the time the deposit was made. At all events, no question is raised by the record as to ownership of the money, and we are authorized to treat the money on deposit as the property of the defendant.

After due notice to the plaintiff in the judgment, she appeared and moved to quash and dismiss the writ of garnishment issued to said First National Bank of Clanton upon two grounds:

"1. For that heretofore and on, to-wit, November 25, 1932, said defendant was a resident of the Middle District of Alabama, and as such duly filed in the United States Court for the Northern Division of the Middle District of Alabama, a petition in Bankruptcy and said defendant was on said date duly adjudged a bankrupt and that thereafter and on, to-wit, March 1, 1933, the said defendant was duly discharged by said United States Court, as a bankrupt and that the judgment in this cause was obtained prior to the adjudication of the defendant as a bankrupt and the judgment on which the said Writ of Garnishment in this cause was issued was barred and discharged by the adjudication and was without vitality and said Writ of Garnishment is void.

"2. For that heretofore and on, to-wit, October 27, 1932, all of the stockholders of the plaintiff corporation in this cause, prepared and duly signed and filed for record in the Probate Office of Montgomery County, Alabama, where said corporation was incorporated, a notice and agreement for the dissolution of said plaintiff corporation and that said corporation was duly dissolved, on, to-wit, November 2, 1932, and that said Writ of Garnishment issued in said cause on, to-wit, December 20, 1938, is null and void and of no effect."

There was a demurrer to this motion to quash, which was overruled. The judgment overruling the demurrer is here assigned for error, but it does not seem to be argued, and we will, as the parties seem to have done, treat the case as presented by the motion to quash and the plaintiff's answer thereto.

By its answer the plaintiff (first) denied "the averments contained in" the motion; and (second) while admitting that the defendant had been duly adjudged a bankrupt in the United States District Court for the Northern Division of the Middle District of Alabama, as averred in the motion, and that the defendant had been duly discharged, and, further, that the judgment was obtained prior to the adjudication, it averred that the claim evidenced by the judgment was not "duly scheduled by said bankrupt in the bankruptcy proceedings;" and it further averred that at the time of the filing of the proceedings in bankruptcy the plaintiff was the owner of the judgment, and that he had no notice, or actual knowledge of said proceedings until the latter part of the year 1938. Third that prior to the dissolution of the Covington Brothers Motor Company, Inc., the judgment upon which the garnishment was issued had been duly transferred and assigned to plaintiff, for whose use and benefit the writ of garnishment was issued, and that it was, at the time of the issuance of the said writ, and still is, the property of the plaintiff.

On the trial of this cause, the evidence was given orally before the court.

From the evidence it appears that Mrs. Robinson, the debtor, was duly adjudged a bankrupt on the 25th day of November, 1932; that the judgment upon which the garnishment was issued was rendered on April 20, 1932, in favor of Covington Brothers Motor Company, Inc.; that the schedule of creditors filed by Mrs. Robinson in her bankruptcy petition did not, as first filed, list said Covington Brothers Motor Company, Inc., or the said G. W. Covington, Jr., as a creditor.

It further appears that the stockholders of said Covington Brothers Motor Company, Inc., were the said G. W. Covington, his sister, Mrs. Milwee, and I. Berman, the said I. Berman being the Vice-President of the corporation and a director, but that he owned only one share of the corporate stock. It appears that said Berman took no active part in said corporation.

It further appears that said corporation was duly dissolved on November 2nd, 1932.

There was some evidence to the effect that about the time of the dissolution of the corporation, its assets were transferred and assigned to the said G. W. Covington, Jr., but the testimony relied on to show this transfer is very indefinite and not at all satisfactory.

It further appears that shortly after filing her petition in bankruptcy, and while the proceedings were still pending before the referee, Mrs. Robinson, or her attorney discovered that she had failed to list the said Covington Brothers Motor Company, Inc., as a creditor, and had failed to list the judgment in the schedule of her debts. Thereupon, her attorney, Mr. G. C. Walker, wrote the clerk of the United States District Court at Montgomery, Alabama, asking if his client would be permitted to amend her petition to show...