Jackson v. Harby

• Decision Date: 21 March 1886
• Docket Number: Case No. 2191.
• Citation: 65 Tex. 710
• Parties: T. E. JACKSON ET AL. v. J. D. HARBY ET AL.
• Court: Texas Supreme Court

65 Tex. 710

T. E. JACKSON ET AL.

v.J. D. HARBY ET AL.

Case No. 2191.

Supreme Court of Texas.

March 21, 1886.

APPEAL from Limestone. Tried below before the Hon. L. D. Bradley.

Appellees brought this suit against T. E. Jackson, sheriff of Limestone county, and his sureties on his official bond, and against Leon Blum, Sylvain Blum and Hyman Blum, composing the firm of Leon & H. Blum, and against Joseph E. Wallis and Henry A. Landes, composing the firm of Wallis, Landes & Co., for the recovery of $4,000 damages and interest, and against R. E. Edmison and Isaac Whatley, for the recovery of a debt due Weisenfield & Co., of Baltimore, Md., for the sum of $385.23, and a debt due Levi Whatley, of Limestone county, Texas, for the sum of $680, with interest on both claims, from February 14, 1884.

Appellees complained in substance, that about February 14, 1884, Edmison & Whatley, merchants, being indebted to Levi Whatley and Weisenfield & Co. in the amounts above set out, executed to them a trust deed to secure the debt, amounting in the aggregate to $1,065.23, on the stock of goods, wares and merchandise of Edmison & Whatley, then in the town of Groesbeck, Limestone county, and that the goods, etc., were at that date worth $3,500. A copy of the trust deed was made an exhibit to the petition. That all this was done with the knowledge and consent of Weisenfield & Co., and Levi Whatley, cestuis que trust. By the terms of the trust deed appellees were empowered to take possession of the stock of goods, wares and merchandise, and to sell the same in due course of business, or otherwise, should they (the trustees) see fit or deem expedient; 2d, to pay all costs and expenses incident to the trust, which was fixed at two and a half per cent. of the amount taken in from such sales; next, to pay the debts aforesaid; lastly, the trustees were empowered to take full possession of the stock of goods, to convert the same into money, and after deducting the two and one half per cent., pay first the Weisenfield claim, and next the Levi Whatley claim, and to collect and receipt for all debts due the grantors in the trust deed, and apply the same as hereinbefore indicated, and to have as full power and control over the business as the grantors had. These goods, etc., conveyed in the trust deed were listed, with the value of each article set opposite, and the inventory made exhibit A to the trust deed, except the debts due the grantors, which were not inventoried. No time was specified in which the debts secured were to be paid; that appellees accepted the trust, took possession of the goods, etc., on the day of the execution of the trust deed, and continued in possession, executing the trust until about February 17, 1884; that on that date, and on the next day, appellant, T. E. Jackson, (sheriff) by advice, direction and order of the appellants, Blums, and Wallis, Landes & Co., by virtue of a writ of attachment out of the district court of Galveston county, in favor of Leon & H. Blum and against Edmison & Whatley (the grantors in the trust deed); and by virtue of a writ of attachment out of the county court of Galveston county, in favor of Wallis, Landes & Co. and against J. J. Whatley, both issued on February 16, 1884; and also by virtue of a writ of attachment out of the justice's court of Limestone county, issued on February 18, 1884, in favor of Jemison, Groce & Co. v. Edmison & Whatley, without the consent of appellees, seized and took possession of the goods, etc., and converted the same to his use, and to the use and benefit of Leon & H. Blum and Wallis, Landes & Co. That appellant, Jackson, by advice, direction, etc., of Blums and Wallis, Landes & Co., and by virtue of certain orders of sale (a detail of which is unnecessary) sold the goods without having himself complied with the terms of the trust deed, and without requiring the purchasers to comply therewith. That by reason of these wrongful acts, the goods, etc., were wholly lost to appellees, to their damage $4,000, and that Edmison & Whatley, the grantors in the trust deed, were insolvent.

To this petition, defendants, except Edmison & Whatley, demurred generally and specially. The special demurrers were, in substance, as follows: To the joinder of Edmison & Whatley with them as joint defendants.

To all that part of the petition setting up a trust and trust deed, because (in substance) same showed on its face, as set out in petition, that it was done to defraud the creditors of Edmison & Whatley; that it was, in law, a fraud on the creditors of Edmison & Whatley; that it was an assignment to preferred creditors; that the effect of it was to hinder and delay the creditors of Edmison & Whatley in a manner not permitted by law.

Then followed a general denial and a special plea, in substance, as follows: That the trust deed was the result of a fraudulent combination and conspiracy by the parties thereto for the purpose of defrauding the creditors of Edmison & Whatley, and one of the appellees, J. J. Whatley (trustee); that Blums and Wallis, Landes & Co. were creditors of Edmison & Whatley and J. J. Whatley; that Levi Whatley, one of the cestuis que trust, was, in fact, a partner of Edmison & Whatley, and liable for the Blum debt, but was, with the assistance of his co-conspirators, endeavoring to withdraw his interest in the business, in fraud of their creditors; that J. J. Whatley conveyed all of his visible property to Edmison & Whatley, for the purpose of defrauding Wallis, Landes & Co., and his other creditors; and Edmison & Whatley then conveyed all their visible property, together with that of J. J. Whatley, to said J. J. Whatley and co-trustee, for the purpose of defrauding their creditors; that they were insolvent and in debt, and that all the parties to these transactions had notice thereof.

That the parties to the trust deed invented this scheme for the purpose of saving all of the visible property of Edmison & Whatley from the just claims of their creditors. That the trustees were secretly and covinously trustees for the benefit of Edmison & Whatley, and that there was an understanding that the trustees should only take ostensible possession of the goods, and that Edmison & Whatley, either or both, should go into possession of the property as the pretended agents of the trustees, and sell and use it for their own use and benefit, to the exclusion of the claims of their creditors, after paying anything that might be due on the claims of the pretended cestuis que trust. The answer set up various fraudulent transactions between the parties to the trust deed, and alleged a fraudulent and wrongful commingling of the goods of J. J. Whatley with those of Edmison & Whatley, in justification of the levy of the Wallis, Landes & Co. writ.

The plaintiffs dismissed as to the defendants R. E. Edmison and Isaac Whatley, not served. The demurrers and exceptions of defendants were heard, and the demurrer, or exception third, to that part of the petition which claimed damages in excess of the amount claimed to be due, for which the trust deed was executed, was sustained, and all the other demurrers and special exceptions were overruled, to which the defendants excepted.

After the evidence was all...