Lewis v. Alexander
| Decision Date | 27 March 1895 |
| Citation | 31 S.W. 414 |
| Parties | LEWIS, Sheriff, et al. v. ALEXANDER.<SMALL><SUP>1</SUP></SMALL> |
| Court | Texas Court of Appeals |
Appeal from district court, Dallas county; R. E. Burke, Judge.
Action by C. H. Alexander, trustee under a chattel mortgage from Clower, Harris & Co. for the benefit of their creditors, against W. H. Lewis, sheriff, and his official bondsmen, for conversion. From a judgment for plaintiff, and an order denying a motion for a new trial, defendants appeal. Affirmed.
McCormick & Spence, for appellants. Dickson & Moroney, for appellee.
C. H. Alexander, as plaintiff, brought this suit against W. H. Lewis, as sheriff of Dallas county, Tex., and his official bondsmen, for alleged conversion, under a writ of attachment, of certain goods and wares which plaintiff claimed as trustee in a chattel mortgage executed to him by Clower, Harris & Co. for the alleged benefit of their numerous mercantile creditors. Plaintiff alleged the execution and delivery to him, by Clower, Harris & Co., of a chattel mortgage covering their stock of goods, wares, and merchandise in Dallas; that he took possession thereunder; that Lewis, as sheriff of Dallas county, acting in his official capacity, by virtue of a writ of attachment issued out of the district court of Dallas county in a certain cause, styled "Lincoln Electric Manufacturing Company v. Clower, Harris & Co.," wrongfully took, seized, and attached the goods covered by the said chattel mortgage. Plaintiff specially alleged that a majority of the creditors whose debts were secured by the terms of said trust deed or mortgage had expressly accepted under same, and had assented to same, in every particular, long before the issuance of said attachments, and that all the creditors secured thereby had assented to said instrument, and accepted under same, except the said Lincoln Electric Manufacturing Company, plaintiff in the said attachment. Plaintiff alleged the value of the goods to be $7,081.42. By appropriate pleading, the suit was brought against the said Lewis, sheriff, and his official bondsmen. Defendants, after a general denial, answered specially, justifying under the writ of attachment issued in favor of Lincoln Electric Manufacturing Company, and against Clower Harris & Co., the grantors in the alleged chattel mortgage, under which alone the plaintiff claimed his rights; the said Lincoln Electric Manufacturing Company being an existing creditor of Clower, Harris & Co. at the date of the chattel mortgage, and at and prior to the issuance and levy of said attachment, and said Clower, Harris & Co. being then wholly insolvent, as a firm and as individuals. Defendants attacked the validity of the chattel mortgage: (1) Because, prior to the making thereof, the copartnership of Clower, Harris & Co., grantors in the alleged mortgage, composed of D. M. Clower, C. O. Harris, E. T. Lewis, and B. W. Bryan, had been dissolved by a sale under execution of all the right, title, and interest of D. M. Clower in the partnership stock, property, and business, at which sale one J. C. O'Connor had become the purchaser, who did not join in the making of the mortgage on the copartnership goods to plaintiff. That thereby the attempted trust deed or mortgage to plaintiff was void, because, after such sale, and consequent dissolution of the copartnership, the old partners could not legally execute a mortgage with preferences among their creditors. (2) That when the chattel mortgage was executed to plaintiff by Clower, Harris & Co., they were wholly insolvent, as a firm and as individuals, and the conveyance to Alexander, as trustee, was not in good faith, but was made to hinder, delay, and defraud their creditors, which was the real intention and purpose of the transfer. That the property so conveyed was a stock of goods, wares, and merchandise, in a rented store, daily exposed to sale, in parcels, in the regular course of the business of such merchandise; and the possession thereof was never actually taken by the alleged trustee (plaintiff, Alexander), but possession remained with the insolvent firm up to the very time of the seizure thereof under the writ of attachment. (3) That the chattel mortgage under which plaintiff claimed was not made in good faith, but it was intended thereby and contemplated thus to protect and shield said stock of goods, etc., from the claims of creditors until the members of the insolvent firm of Clower, Harris & Co. could coerce their numerous creditors into a compromise and settlement of their debts, and that said Clower, Harris & Co. reserved to themselves a very large portion of their best assets, from the conveyance. (4) Defendants specially averred that the alleged chattel mortgage to plaintiff was made without the knowledge or consent of any of their creditors, and denied that the creditors mentioned therein had ever accepted, ratified, or approved same before the levy of the said writ of attachment, and that hence the conveyance had not become a valid or binding contract or conveyance, as against the creditor, Lincoln Electric Manufacturing Company, the plaintiff in the attachment under which the goods were seized. (5) That the mortgage to Alexander was not made in good faith, but it was the intention of the grantors therein, fully known and participated in by Alexander, to hinder, delay, and defraud thereby their creditors generally, and Lincoln Electric Manufacturing Company in particular. That the alleged conveyance in trust to Alexander was fraudulent, in law, and void, among other things, because the trustee, Alexander, was, at the time of his selection, wholly insolvent, and, moreover, he was totally unfamiliar with the character of the goods so conveyed to him, and with their use or prices, and was wholly incompetent to manage such a business as was pretended to be intrusted to him, all of which was well known to the grantors in the mortgage; and none of the beneficiaries named in the conveyance were consulted as to his selection, nor did they ever afterwards ratify or approve same, prior to the attachment. And by these means the grantors in the mortgage intended and contemplated that they should, in reality, remain in the control, management, and disposal of the stock of goods in controversy. Also, defendants pleaded, by way of mitigation of any damages that plaintiff might recover, that the goods in controversy were situated in a rented storehouse, and were impressed with the landlord's lien for rents owing by Clower, Harris & Co., and were also impressed with the lien for taxes, amounting in all to $310.07; that the proceeds of the sale of the attached goods were duly applied, under proper authority, to the payment of these liens, and hence any recovery by plaintiff should be mitigated and lessened to the extent of such payments. No issue was made by appellants that the debts secured by the mortgage were not the honest, bona fide debts of Clower, Harris & Co. A jury trial on June 22, 1893, resulted in a verdict for plaintiff against defendants for $3,485.93, for which judgment was duly rendered. Defendants' motion for a new trial having been overruled, they duly filed their bills of exceptions, statement of facts, assignment of errors, and now bring the case to this court.
The first and second assignments of error are directed at the refusal of the court to give in charge to the jury this special instruction asked by appellants: "If you believe from the evidence that C. H. Alexander, mentioned as trustee in the chattel mortgage from Clower, Harris & Co., and in evidence before you, was then (at the date of the execution of said mortgage) insolvent, and without property, and indebted beyond his ability to pay, and if he was incompetent to discharge the duties and trusts imposed upon him in the written instrument, by reason of a lack of knowledge, experience, and education appropriate and necessary in the discharge of such duties, then the appointment of said Alexander as trustee would be a circumstance for your consideration in connection with all the other evidence, in determining whether Clower, Harris & Co. intended, by the selection of C. H. Alexander as trustee, to hinder, delay, or defraud their creditors, and whether Clower, Harris & Co., in making such conveyance to such trustee, contemplated a continuance of possession or control of the stock of goods, wares, and merchandise mentioned in such conveyance by said Clower, Harris & Co., or some member of the firm, until a sale thereof could be effected by Clower, Harris & Co., or some member of that firm, or until said firm could bring about a compromise or settlement of their debts with their creditors; and if you find from all the evidence that such was Clower, Harris & Co.'s intent and motive in making such conveyance to said C. H. Alexander, then you will find for defendants." The evidence showed that Alexander was insolvent at the time he was appointed trustee; that he was not an electrician, and had no special knowledge of electrical machinery and fixtures; that it was dangerous for a person without special knowledge of such machinery to attempt to adjust and put it into operation, but that no such special knowledge was required for its sale. It was also shown that Alexander was a good business man, and had a good character for integrity. Upon this branch of the case the court charged the jury as follows: "If, from the evidence, you find that the trustee, Alexander, at the time he accepted the trust, was insolvent, and not skilled in the use and handling of electrical goods, then, if you so find, this fact would not invalidate the deed of trust; but you may look to and consider such evidence for the purpose of determining, with other facts and circumstances, whether Clower, Harris & Co., at the time they executed this deed of trust, were moved to do so for the purpose of hindering, delaying, or defrauding their creditors." The charge given by the court upon this phase of...
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