First Nat. Bank v. Foley

• Decision Date: 05 March 1930
• Docket Number: No. 3371.,3371.
• Parties: FIRST NAT. BANK OF WICHITA FALLS v. FOLEY.
• Court: Texas Court of Appeals

26 S.W.2d 314

FIRST NAT. BANK OF WICHITA FALLS v. FOLEY.

No. 3371.

Court of Civil Appeals of Texas. Amarillo.

March 5, 1930.

Rehearing Denied March 26, 1930.

Appeal from District Court, Wichita County; P. A. Martin, Judge.

Action by C. H. Foley against J. W. Taylor and the First National Bank of Wichita Falls, garnishee. From a judgment for plaintiff, the garnishee appeals.

Reversed and remanded.

J. T. Montgomery and Kilgore & Rogers, all of Wichita Falls, for appellant.

Carrigan, Britain & King, of Wichita Falls, for appellee.

RANDOLPH, J.

This is an appeal from a judgment in a garnishment suit filed by appellee, Foley, against the First National Bank of Wichita Falls, ancillary to a suit by Foley against one J. W. Taylor. From a judgment in favor of Foley, the garnishee, the First National Bank, has appealed.

The writ of garnishment was issued April 12, 1927. It was returnable May 2, 1927. On May 2, 1927, the bank filed its motion to quash the writ of garnishment.

The garnishee's motion to quash the above writ of garnishment was never acted on by the trial court.

On the 10th of May, 1927, the appellee, Foley, secured another or second writ of garnishment to issue in the same cause, which was served upon the garnishee bank on the same day it was issued.

On July 5, 1927, the garnishee bank filed its sworn answer to the writ of garnishment served upon it in this case about May 11, 1927, in which the garnishee answered that it was not indebted to the defendant Taylor when this writ was served upon it in any sum whatever; that at no time since has it been indebted to J. W. Taylor in any sum, and that it is not now indebted to said Taylor; that it has not now, did not have at the time said writ was served upon it, and has at no time since said writ was served, in its possession any effects belonging to said Taylor, and that no other persons within its knowledge are indebted to said Taylor or have effects belonging to him in their possession; that said Taylor does not now own and has never at any time owned any stock in garnishee bank; that he did not own such stock when this writ was served, does not now own any, and has never owned any, stock in said corporation; further alleging the employment of attorneys and praying for $25 as their compensation.

On January 16, 1928, appellee, Foley, filed his controverting answer, which was not sworn to, alleging that he has good reason to believe that the answer of the garnishee, First National Bank, is incorrect in this, that at the time the writ of garnishment was served upon said bank, the bank was indebted to said Taylor in some amount, which amount is unknown to affiant, but which affiant alleges and believes to be a substantial sum of something like, or perhaps more, than $1,000, and that said amount was on deposit at said bank to the credit of said Taylor at the time the writ of garnishment was served upon it, and that said bank is now undertaking to say it appropriated the amount of money so on deposit to J. W. Taylor's credit, to the payment of certain notes owed by Taylor to said bank.

Affiant also alleges that he is informed and believes that neither of the notes owed by Taylor to the bank was due at the time the writ was served upon it; that one of the notes was owed by said Taylor together with E. W. Taylor and was in the sum of $750 and due May 18, 1927, and another note from J. W. Taylor to said bank which was not due until the 8th of June, 1927; this last note being in the sum of $1,250. The affiant further swears upon information and belief that, at the time the writ was served upon said bank, the funds had not been transferred by Taylor to said bank, and that the bank had no right to appropriate said moneys, and that the affiant is therefore entitled to recover the same by his writ of garnishment.

On October 30, 1928, the bank filed an answer to the writ of garnishment served upon it on the 12th of April, 1927, alleging substantially that, when the writ was served upon it, J. W. Taylor had on deposit with it the sum of $802.20, aside from which the garnishee did not then have nor had it at the time of the writ, effects of J. W. Taylor in its possession, nor did it know of any other persons who were at said time indebted to Taylor or who had effects belonging to him in their possession; that said Taylor had no shares in the bank, nor did he own any at the time of the return of said writ; that aside from the $802.20, the said Taylor was not due anything from said garnishee and had no interests at said respective time in said stock or bank; that, subsequent to the service of said writ, Taylor, being indebted to the garnishee in a sum in excess of the amount on deposit, gave it his check for $802.20; same was given, cashed, and said account closed April 26, 1927; that on April 12, 1927, and at all times subsequent thereto, said Taylor was and is wholly insolvent, and, being insolvent and being indebted to the bank in an amount in excess of his deposit, the fund so on deposit was not subject to garnishment, the bank exercising its right to offset the amount due it by defendant with said deposit; further alleging that, owing to the second garnishment causing garnishee to be put to expenses with reference to the first writ, the garnisher is estopped from asserting any claim he had under the first garnishment, etc.

On October 29, 1928, the appellee, Foley, filed his "answer to defendant's answer in garnishment," and denied the insolvency of Taylor by way of special plea and that defendant, having failed to file its answer in garnishment promptly and within a reasonable time after the running of said garnishment, was estopped to plead insolvency of Taylor, because, if same had been filed promptly, he would have pursued other remedies.

On October 30, 1928, defendant filed its supplemental answer consisting of exceptions and general denial and a special plea alleging the knowledge by plaintiff of Taylor's insolvency.

The cause was submitted to a jury on a definition of insolvency, and one special issue, and further that the burden of proof was upon the defendant bank to show the affirmative of the above issue by a preponderance of the testimony.

The appeal here is submitted to this court upon eight propositions, alleging errors on the part of the trial court, some of which are so related that we can discuss them together, and we will so consider them.

The verified answer of the defendant alleging a state of facts, the prima facie verity of which would discharge appellant defendant, and, the plaintiff filing no controverting affidavit, it was error, as claimed by defendant, on the part of the trial court in refusing to peremptorily instruct a verdict for the defendant.

Article 4086, V. A. T. C. S., provides as follows: "If it appears from the answer of the garnishee that he is not indebted to the defendant, and was not so indebted when the writ of garnishment was served on him, and that he has not in his possession any effects of the defendant and had not when the writ was served, and when the garnishee is an incorporated or joint stock company in which the defendant is alleged to be the owner of any shares of stock or interested therein, if it further appears from such answer that the defendant is not and was not, when the writ was served, the owner of any such shares, or interested in such company, should the answer of the garnishee not be controverted as hereinafter provided, the court shall enter judgment discharging the garnishee."

As shown above, the first writ issued was issued and served upon the defendant on April 12, 1927, and was returnable to the May term of court on the 2d day of May, 1927. The garnishee filed no answer on the return day, but did, on that day, file its motion to quash the writ, and on July 5, 1927, filed the above-noted answer in garnishment. The plaintiff's controverting affidavit was not filed until January 16, 1928; hence the claim of defendant that the answer of the defendant, being duly verified, entitled it prima facie to a discharge.

The parties do not seem to have filed the answers and controverting affidavits with any undue haste, nor does it appear that the defendant appeared before the court prior to the filing of the plaintiff's controverting affidavit with any demand of the court that it be discharged; the question of discharge being raised only on the hearing of the case for garnishment.

Article 4087 provides that the garnishee shall in all cases, after legal service, file an answer to the writ of garnishment on or before return day of the term of court to which such writ is returnable, and, should the garnishee fail to file such answer...