Iglehart v. Willis

• Decision Date: 16 January 1883
• Docket Number: Case No. 1495.
• Citation: 58 Tex. 306
• Court: Texas Supreme Court
• Parties: D. T. IGLEHART ET AL. v. P. J. WILLIS & BRO. ET AL.

58 Tex. 306

D. T. IGLEHART ET AL.

v.P. J. WILLIS & BRO. ET AL.

Case No. 1495.

Supreme Court of Texas.

Jan. 16, 1883.

APPEAL from De Witt. Tried below before the Hon. H. Clay Pleasants.

Appellants were in possession of a stock of goods, wares and merchandise conveyed in trust to Iglehart by an insolvent debtor (John Owens), to be sold to pay the debt due to appellants, amounting to about $4,500. Appellees, other creditors of Owens, sued out an attachment against him and procured its levy on the stock of goods in appellants' possession.

Appellants claimed the property attached under “trial of right of property.” This was the suit under the issues joined, and the case was tried by the court and judgment rendered against appellants as claimants. An intervention was allowed to one Wallace on an independent claim, and judgment was rendered likewise in his favor against appellants. No assignments of error were filed raising the question of the right to intervene.

The evidence showed that the debtor, Owens, was largely indebted to Adoue & Lobit (appellants and claimants), about $4,500; that he had a stock of goods situate in the town of Cuero, which, if prudently sold, might realize as much, or possibly a little more, than the debt due to appellants, after deducting expenses of sale. Owens was insolvent and unable to pay his debts as they matured. This was about February 10, 1879, and on that day Owens executed and delivered to Iglehart, the representative of Adoue & Lobit, a conveyance of his stock of goods, and such as were in transit to arrive. Iglehart took possession of the stock at once and recorded the instrument of writing under which he was to act. By the terms of the conveyance Iglehart was authorized to sell the property conveyed, under the direction of Adoue & Lobit, for their benefit and account; and Adoue & Lobit were authorized to appoint any other person to act as trustee, if they should see fit. A regular account was to be kept of the sales and proceedings by the trustee; and the debtor, Owens, was to be allowed full advice as to what was being done from time to time, if he wished. The proceeds of sale, after deducting all expenses of the trust, were to be paid to Adoue & Lobit on their debt, and if more than sufficient, the balance to belong to Owens or his assigns. Authority was given to the trustee to take a reasonable time to execute the trust, and it was stipulated that if any goods should be subsequently added to the stock by Adoue & Lobit in order to make sales of the depleted stock, that such might be paid for out of sales made.

Afterwards, on the 18th day of February, 1879, Owens made a transfer of any balance that might remain of the stock or proceeds thereof, after paying Adoue & Lobit, to John Wallace, through a trustee named, who was to take possession after Iglehart had executed his trust as aforesaid, and sell the remaining stock for a debt due to Wallace of about $1,100. This conveyance was in writing and was at once recorded.

Iglehart had proceeded without delay to sell and act under the conveyance to him, and in about ten days, on the 21st of February, the entire property then on hand was seized under the writ of attachment at the suit of P. J. Willis & Bro. v. John Owens, for about $3,900.02, and was subsequently claimed by Iglehart and Adoue & Lobit.

The evidence was voluminous, but shows that Iglehart, for Adoue & Lobit, had secured the debt of Adoue & Lobit by the conveyance referred to, and had acted in accordance with its terms up to the date of the attachment.

The court, a jury being waived, found and adjudged that the deed of trust from Owens to Iglehart was made to hinder, delay and defraud creditors, and was void; that the deed to the trustee for Wallace was not made for such purpose, and was therefore valid; that the value of the property levied on by plaintiffs' attachment was $4,076.35, and the amount of Willis & Bro.'s judgment, rendered September 5, 1879, against Owens was $3,891.67; and adjudged that Willis & Bro. recover $4,465.51, being the value of the property and ten per cent. damages, less $1,346, which was found to be the amount of Wallace's debt, thus making this debt a preferred claim, to be first paid out of the goods. Willis & Bro. sought to have the judgment reformed, insisting that under art. 4843, R. S., they were entitled to judgment for the full amount of their debt; but this application was denied, and claimants having appealed, Willis & Bro. filed cross-errors as against Wallace, asking to reform the judgment so as to secure the full amount of their debt, though they executed no bond.

McLemore & Campbell, for appellants.

I. The court erred in rendering judgment against the claimants (appellants), and in holding that the property levied on was subject to the writ. Wright v. Linn, 16 Tex., 42;Baldwin v. Peet, 22 Tex., 716, 717;Howerton v. Holt, 23 Tex., 59; Leitch v. Hollister, 4 Comstock, 211; Shirras v. Caig, 7 Cranch, 34; Burrill on Assignments, 326-336.

II. An insolvent debtor could transfer his property in February, 1879, to secure or satisfy any one creditor; and a conveyance of property, accompanied by possession with power to sell, in order to satisfy a debt, was lawful. Baldwin v. Peet, 22 Tex., 716, 717;Howerton v. Holt, 23 Tex., 58 and 59;Shirras v. Caig, 7 Cranch, 34.

III. The issues in the suit between P. J. Willis & Bro. and Iglehart and Adoue & Lobit arose out of the statutory proceedings under trial of the right of property; and the intervenor, Wallace, was not a party to the proceedings, and was not entitled to claim any judgment in that suit as against any of the parties to it.

A. B. Peticolas, for appellees.

I. The question of fraud in this trust not having been decided by the court as a question of law upon the inspection of the deed,...