First Nat. Bank v. Cohen

• Decision Date: 04 November 1899
• Citation: 55 S.W. 530
• Parties: FIRST NAT. BANK OF CORSICANA v. COHEN et al.<SMALL><SUP>1</SUP></SMALL> DAMON et al. v. ADAMS et al.
• Court: Texas Court of Appeals

55 S.W. 530

FIRST NAT. BANK OF CORSICANA v. COHEN et al.¹

DAMON et al. v. ADAMS et al.

Court of Civil Appeals of Texas.

November 4, 1899.

Appeal from district court, Henderson county.

Action by John I. Adams & Co. against I. P. Levy, as trustee of H. Cohen & Co., and others, for the recovery of certain merchandise fraudulently obtained by H. Cohen & Co. The property was taken by plaintiff under writ of sequestration, and subsequently replevied by defendant Levy. Afterwards defendant H. G. Damon was appointed receiver of the property of H. Cohen & Co., and obtained possession of the property replevied. The entire fund realized by the receiver was paid to defendant the First National Bank of Corsicana. Plaintiffs having obtained judgment on the replevin bond against I. P. Levy and his sureties, the latter were given judgment over against the receiver, H. G. Damon, and Damon had judgment against the First National Bank of Corsicana, from which judgments Damon and the bank appeal. Reversed in part, and in part affirmed.

McKie & Autry, for appellants. Simkins & Mays, C. W. Croft, and Stone & Lee, for appellees.

FINLEY, C. J.

The appellant First National Bank of Corsicana, in its brief, presents the following general statement of the nature of the litigation, the correctness of which is not challenged, and it is considered sufficient to indicate the character of the controversy. "This suit was instituted by the firm of John I. Adams & Co. against I. P. Levy, as trustee of H. Cohen & Co., for about thirty-five (35) barrels of molasses charged to have been purchased from Adams & Co. fraudulently by the firm of H. Cohen & Co., who were then doing business at Blooming Grove, Navarro county. The suit was for the specific property. Value thereof was set at $543.40. The suit was instituted about the 12th day of December, 1891. I. P. Levy promptly replevied the goods, giving M. Cohen and Stephen Smith as sureties on the replevy bond. The firm of H. Cohen & Co. were subsequently made parties to the suit by plaintiffs. While the case was in this condition, J. D. Stokes, a member of the firm of H. Cohen & Co., instituted a separate and independent suit in the district court of Navarro county, Texas, against I. P. Levy, M. Cohen, and H. Cohen, enjoining them from in any way handling or disposing of the H. Cohen stock of goods, and also asking for the appointment of a receiver. Injunction issued, and H. G. Damon was appointed receiver on about the 2d day or January, 1892, and I. P. Levy was ordered to turn over to the receiver all of the assets of the firm of H. Cohen & Co. in his hands. He at first refused to comply with the order, and was cited before Judge Hardy for contempt. After this proceeding, he complied with the order of the court, and surrendered everything in his hands to Mr. Damon, including the goods involved in this suit. The case dragged in the courts in this condition for years, was once tried and appealed, and the judgment of the lower court was reversed. After the reversal, the case was removed to Henderson county. While the case was thus pending, the receivership case, J. D. Stokes v. I. P. Levy et al., was dismissed and compromised, and all the money was, under certain agreements, paid over to the First National Bank of Corsicana. More than two years after this payment to the bank by H. G. Damon, receiver, the original defendants in this case, I. P. Levy, M. Cohen, and Stephen Smith, made H. G. Damon and the sureties on his bond as receiver parties to this suit, and they also made the First National Bank of Corsicana a party to this suit, asking that, if any judgment was recovered against them by the plaintiffs, they have a judgment over against Damon and his sureties, and also against the First National Bank. The bank having been brought into the case, Damon also pleaded against it, asking for a judgment over, if any should be recovered against him and his sureties. Upon this state of the record the case was tried in the district court of Henderson county on the ____ day of February, 1899, and resulted in a verdict in favor of the plaintiffs for the value of the goods sued for against the original defendants, and in favor of said original defendants against H. G. Damon and his sureties, and then in favor of H. G. Damon and his sureties over against the First National Bank of Corsicana. After motion for a new trial was overruled, the bank excepted, gave notice of appeal, and presents the same to this court for revision." H. G. Damon and the sureties on his bond as receiver subsequently sued out a writ of error, and have prosecuted it to this court. The two causes pending in this court were, by order of the court, consolidated, and will be treated as one appeal; the First National Bank and Damon and his sureties being the parties who complain of the judgment and assign errors.

The trial court submitted no issues of fact to the jury specifically directing the verdict upon which the judgment is based, the material facts of the case appearing to be wholly uncontroverted. The original defendants sued by John I. Adams & Co., to wit, H. Cohen & Co., I. P. Levy and sureties on his replevy bond, M. Cohen, and Stephen Smith, admitted the plaintiffs' cause of action, and consented that judgment should be rendered against them in favor of plaintiffs. The particulars of their liability therefore become unimportant, except in so far as such facts may throw light upon the question of their right to recover over against the receiver, Damon, and his sureties, and the right of the latter to recover over against the bank. These uncontested facts were shown on the trial: (1) That H. Cohen & Co. were merchants in Blooming Grove, Navarro county, Texas, and executed a chattel mortgage on or about the 9th day of December, 1891, to I. P. Levy, to secure certain preferred creditors mentioned in said mortgage, and said mortgage conveyed all the merchandise, notes, and accounts, and several tracts of land, and Levy went into possession. The first claim secured in this chattel mortgage were two certain promissory notes for $6,000 each, executed by H. Cohen and J. D. Stokes to M. Cohen, and Cohen's name was used in the chattel mortgage, but at that time, and up to the distribution of the estate by the receiver, said two notes were really owned by the First National Bank of Corsicana. (2) That a short time prior to the failure the plaintiffs in this case, John I. Adams & Co., sold and delivered to H. Cohen & Co., at Blooming Grove, a certain lot of molasses, the same described in plaintiffs' petition. At the time of the failure the same had not been paid for. That about three days after the trustee went into possession of the stock of goods, including the molasses, the plaintiffs here, John I. Adams & Co., brought this suit, and sequestered the goods sued for. That said goods were promptly replevied by the trustee, I. P. Levy, with M. Cohen and Stephen Smith as his sureties. (3) Within a few days after the goods were replevied by Levy, J. D. Stokes, the partner in the firm of H. Cohen & Co., instituted an independent suit in the district court of Navarro county, charging all kind of fraud and combination between I. P. Levy, H. Cohen, and M. Cohen, and asking the appointment of a receiver. The application for a receiver was granted, and Mr. H. G. Damon was appointed to this position by Judge Rufus Hardy on the 2d day of January, 1892. In the order of appointment the trustee, I. P. Levy, was instructed to turn over all the assets of H. Cohen & Co. to said receiver, the stock of merchandise embracing the John I. Adams & Co. goods being specifically designated; and the receiver's bond was fixed at $20,000, which bond he gave, and the same was approved, and he took charge of and began administration of the estate. (4) H. G. Damon, as receiver, promptly after his appointment reduced the Cohen stock of merchandise into money and deposited the same in bank. He collected $300 or $400 on the accounts. He kept no statements showing from what source he received any particular funds, but he simply sold the entire stock of merchandise, and deposited in the bank, early in the year 1892. He retained from the total cash in his hands the following amounts: About $650 for his own services as receiver, about $200 he paid out for clerk hire, about $120 for house rent. After paying these expenses, he had left in hand in February, 1894, about $6,300 in...