John Weis, Inc. v. Reed

• Decision Date: 19 February 1938
• Citation: 118 S.W.2d 677,22 Tenn. App. 90
• Parties: JOHN WEIS, Inc., v. REED et al.
• Court: Tennessee Court of Appeals

118 S.W.2d 677

22 Tenn.App. 90

JOHN WEIS, Inc., v. REED et al.

Court of Appeals of Tennessee, Middle Section.

February 19, 1938

Certiorari Denied by Supreme CourtJuly 2, 1938.

Appeal from Chancery Court, Davidson County; R. B. C. Howell Chancellor.

Action by John Weis, Inc., against Mrs. Notie M. Reed and Resolute Underwriters, Inc., to attach a sum due the first-named defendant from the Resolute Underwriters, Inc., wherein Resolute Underwriters, Inc., filed a cross-bill as a bill of interpleader.From judgments in favor of various creditors of the first-named defendant, the first-named defendant appeals.

Reversed in part, and remanded for distribution of the proceeds in accordance with opinion.

Albert Williams, Stanley Horn, Jr., and Joe Brown Cummings, all of Nashville, for defendant Mrs. Reed.

I Schulman, Ferriss C. Bailey, Aust, McGugin & Spears, and Bass, Berry & Sims, all of Nashville, for intervening petitioners.

E. C ARNOLD, Special Judge.

On May 9, 1936, the original bill in the above cause was filed by John Weis, Inc., a Tennessee corporation, against Mrs. Notie M. Reed and Resolute Underwriters, a Rhode Island Corporation, having an office and agents in Davidson County.The bill alleged an indebtedness by Mrs. Reed of $594.80.An attachment of Mrs. Reed's interest in a sum due her on a fire policy from Resolute Underwriters, Inc., was prayed, on the ground that she was about to dispose of her property fraudulently, and the same day attachment issued.Service of the original bill was had on Resolute Underwriters, and counterpart subpoena on Mrs. Reed in Putnam County on May 22, 1936.The Resolute Underwriters filed an answer admitting that it owed Mrs. Reed $800 for a fire loss, and at the same time it filed a cross-complaint, alleging the attachment by the complaint, that another attachment was issued from another court by Aaron Morris for $104.35, and it further alleged a demand made by Feigenbaum & Stern for $13.90, and another demand by the Tennessee Electric Power Company for $43.95.Although the Resolute Underwriters admitted it owed Mrs. Reed $800, it alleged it could not safely judge the claims of the various creditors, asked that its cross-bill be considered a bill of interpleader, and that the above parties be required to interplead and settle among themselves their respective claims for the $800, and that they be enjoined from proceeding further at law or in equity in this cause against the cross-complainant.

Subsequently, Montgomery Ward & Company was granted leave to file a petition, in which it alleged that Mrs. Reed was indebted to it in the sum of $51.60.Like permission was granted to Edward Kaeser to file a petition which alleged Mrs. Reed was indebted to petitioner in the sum of $65.

The various parties answered the cross-complaint of Resolute Underwriters.

On July 31, 1936, Mrs. Reed filed a plea of abatement to the original bill, a plea of abatement to the writ of attachment, a demurrer to the original bill, two pleas of abatement to the cross-bill of the Resolute Underwriters, a demurrer to the same cross-bill, pleas of abatement and demurrers to the petitions of Edward M. Kaeser, Montgomery Ward & Company, and to each of the answers and petitions of the Tennessee Electric Power Company and of Aaron Morris.A total of fourteen pleadings by Mrs. Reed preceded the filing of the answer on July 8, 1937.The answer referred to the various pleas in abatement and demurrers of Mrs. Reed, which had previously been overruled, and adopted them as her answer.

By stipulation filed by counsel for Mrs. Notie Reed, on July 8, 1937, it was admitted the above amounts were owing the various intervenors by her, except as to the claim of the original complainant.

On motion of Resolute Underwriters the Chancellor, on July 31, 1936, sustained the cross-bill as a bill of interpleader, and on July 12, 1937, found that the Resolute Underwriters had paid $800 into that Court, and that this sum represented insurance paid for fixtures and equipment conditionally sold by John Weis, Inc., Aaron Morris, Montgomery Ward & Company, and Edward Kaeser, to defendant Mrs. Reed, and later destroyed by fire; that the fixtures and equipment had been sold under title retention contracts to her by John Weis, Inc., of the value of $594.80, for which sum judgment was given.To Montgomery Ward & Company, judgment was given for $51.60; to the Tennessee Electric Power Company, $43.95; to Edward Kaeser, $65.It is to be noted that no judgment was rendered in favor of Aaron Morris, although it was stated that the proceeds of the policy paid by Resolute Underwriters covered certain fixtures and equipment conditionally sold by Aaron Morris to Mrs. Reed under title retention contracts.

To this decree Mrs. Notie M. Reed excepted (1) to the overruling of her pleas in abatement and demurrers; (2) because the Court ordered the distribution among the creditors of the $800 paid into Court.ComplainantJohn Weis, Inc., excepted, assigning as error (1) failure to hold complainant was entitled to a priority or lien, and (2) holding that complainant did not have a valid assignment for $389.Mrs. Reed's appeal was perfected; but the record fails to show that the appeal by John Weis, Inc., was ever perfected.The record does not indicate that an appeal bond was made.Under the view expressed in England v. Young,155 Tenn. 506, 296 S.W. 14, the appeal of John Weis, Inc., must be dismissed, as it was not perfected; but the argument under the assignments may be considered as a reply to the brief of appellant, Mrs. Reed.John Weis has no right to assign errors on Mrs. Reed's appeal, as she prayed a limited appeal.Gibson's Suits in Chancery4th Ed., secs. 1262(note 10), 1263a.

The errors assigned by Mrs. Reed raise three questions: (1) Was there error in overruling Mrs. Reed's pleas in abatement and demurrers?(2) What sum does Mrs. Reed owe to John Weis, Inc.?(3)Are John Weis, Inc., and the other creditors entitled to share pro rate in the insurance money?

Counsel for Mrs. Reed urge that she did not waive her plea in abatement to the writ of attachment or to the fiat by making further defense to the original, bill and the cross-bill, and cite section 877 of the fourth edition of Gibson's Suits in Chancery.We believe the language of that section, applied to this case, sustains the Chancery Court.In that section it is said: "If the defendant appears in person, or by solicitor, before publication is made, publication is unnecessary.But while appearance in an attachment suit gives the Court jurisdiction of the person of the defendant, it does not give jurisdiction of the property sought to be attached: that depends on the validity of the attachment proceedings."

But we think this proposition is immaterial.

The plea in abatement to the bill alleged that Mrs. Reed was a resident of Putnam County, Tennessee, and the plea in abatement to the attachment denied that she had fraudulently disposed of the proceeds of the policy, or of any other property, and that she did not contemplate any such disposition of her property, either at the time of the attachment or at any other time.Her demurrer, filed the same day, sets up the defense that the bill failed to allege any ground for issuance of the attachment.Similar pleas in abatement to various cross-bills and demurrers to the same were filed by Mrs. Reed.

As far as the pleas in abatement are concerned, it will be noted that Resolute Underwriters, Inc., on May 19, 1936, tendered the $800 to the Court.This was more than two months prior to the date of filing the pleas, demurrer and answer to the original bill.The Court obtained control of the $800 when it was paid into Court.Mrs. Reed was served with process, and by her answer and stipulations she submitted herself to the jurisdiction of the Court.

We think the Court had jurisdiction of the case, but the pleas in abatement as to the attachment writs should have been sustained.

A proceeding on a bill of interpleader is not a proceeding in rem.33 C.J. 420, 421, secs. 2 and 3.

The Court had jurisdiction of the bill of interpleader, as several of the defendants were residents of Davidson County and counterpart was sent to Putnam County and served on Mrs. Reed.Code, sec. 8653;Tennessee Procedure by Higgins & Crownover, sec. 171.

This service, together with the admission of Mrs. Reed in her brief that the Court had jurisdiction of the bill of interpleader, is sufficient.

The next questions are, (1) whether the defendants have any lien on the proceeds of the insurance policy, and (2) whether the Court had a right to render judgments against Mrs. Reed in their favor.

We think when the Court took jurisdiction of the bill of interpleader it had jurisdiction of the defendant, Mrs. Reed, and that the whole matter could be wound up in this one suit.

In a proceeding under a bill of interpleader there are two suits: (1) one involving the complainant to determine whether the Court has jurisdiction to decree that the defendants interplead, and (2) the controversy between the defendants.Each defendant becomes a complainant as to the other defendants.

"In the absence of appropriate pleadings, interpleader cannot be sustained.A strict bill of interpleader involves two suits and there may be two sets of pleadings: (1) Those having reference only to the rights of plaintiff to compel defendants to interplead.(2) The several complaints of defendants, in which their respective rights to the subject in controversy are set up.But a petition in nature of bill of interpleader does not necessarily involve two separate pleadings, although the better practice might be to require them.The general rules as to the construction of...