Lowe v. City of Munday

• Decision Date: 14 February 1941
• Docket Number: No. 2110.,2110.
• Citation: 148 S.W.2d 937
• Parties: LOWE et al. v. CITY OF MUNDAY et al.
• Court: Texas Court of Appeals

148 S.W.2d 937

LOWE et al. v. CITY OF MUNDAY et al.

No. 2110.

Court of Civil Appeals of Texas. Eastland.

February 14, 1941.

Appeal from District Court, Knox County; Isaac O. Newton, Judge.

Action by the City of Munday and another against F. A. Lowe, assignee for the benefit of creditors of G. W. Haney and another, doing business as the Haney Grocery, and others, for conversion of assignors' assets, appointment of a substitute assignee, and value of property converted. From a judgment overruling pleas of privilege filed by defendants Lowe and another, they appeal.

Reversed, and cause transferred to a District Court of Taylor County as to appellants.

Davidson & McMahon, of Abilene, for appellants.

M. F. Billingsley, of Munday, for appellees.

GRISSOM, Justice.

The City of Munday and Munday Independent School District instituted this suit in the District Court of Knox County against F. A. Lowe, H. O. Wooten, and H. O. Wooten Grocer Company, residents of Taylor County. Plaintiffs alleged that G. W. and Tom Haney formerly operated a store under the name of Haney Grocery in the city of Munday. That, about September 4, 1939, the Haneys became insolvent and made a voluntary assignment to F. A. Lowe, for the benefit of their creditors, and executed a deed of assignment to him which was accepted; that Lowe was an employee and officer of Wooten Grocer Company "and in this instance is and was the alter ego of said H. O. Wooten Grocer Company and was acting for said H. O. Wooten Grocer Company in the matters and things hereinafter alleged." Plaintiffs' next allegation was as follows: "Plaintiff further avers that they and each of them after having received notice of such assignment from the said F. A. Lowe, assignee, filed their claims with him * * * and agreed to accept under said deed of assignment." (Italics ours.) There followed allegations of assessment of taxes by the City against the "stock and fixtures" belonging to Haney Grocery for the years 1932 to 1939, inclusive, amounting to $266.26, and assessment of taxes by the school district for the years 1933 to 1939, inclusive, in the sum of $128.60, and that such taxes, penalties and interest constituted a valid and subsisting lien against said stock and fixtures, and were a prior lien thereon to that of any other creditor. That Lowe, acting for the Wooten Grocer Company, took possession of the property of Haney Grocery of the value of $2,240; that Lowe notified the creditors of Haney Grocery that a sale of its assets would be made on September 15, but that sale was postponed; that thereafter on September 24, on Sunday, Lowe, acting with Wooten Grocer Company, and without notice to the creditors, removed the stock, fixtures and assets of Haney Grocery from Munday "thereby depriving the creditors of said Haney Grocery of the value thereof, and misappropriating and misapplying such assets to the use and benefit of said F. A. Lowe and H. O. Wooten Grocer Company * * *." Plaintiffs alleged "that by reason of the illegal, fraudulent, conspiracy and conduct and action on the part of said defendants, that these plaintiffs have lost their debt, and that by reason of such conduct on the part of the defendants and each of them, they and each of them have become personally liable to plaintiffs and other creditors for the full value of the property, estate and assets of said Haney Grocery so misappropriated and embezzled as aforesaid." Plaintiffs alleged that the assignment was not a statutory but a common-law assignment. It was alleged that the "fraud" of defendants culminated and was practiced upon the creditors in Knox County, and "such conversion of said assets so occurred at the time and place hereinbefore alleged, which gives this court jurisdiction of the persons and the subject-matter of this suit." Plaintiffs prayed for judgment for the value of the property converted and "that a substitute assignee be appointed by the court, after the said F. A. Lowe has been legally removed from his office of trust, given and granted by the terms of said deed of assignment" and for a personal judgment against defendants for the sum of $2,240, "the value of such property so converted."

The H. O. Wooten Grocer Company and F. A. Lowe filed their pleas of privilege to be sued in the county of their residence.

Plaintiffs filed a controverting affidavit replying to both pleas of privilege in which they repeated many of the allegations of their petition, and it was made a part thereof.

Plaintiffs alleged that venue of the suit was in Knox County under secs. 5, 7, 9, 12 and 30 of Art. 1995, R.S.1925, Vernon's Ann.Civ.St. art. 1995, subds. 5, 7, 9, 12, 30. In the controverting affidavit plaintiffs alleged "That thereafter on or about September 8, 1939, the plaintiffs for themselves, filed with said assignee, F. A. Lowe, their claims for the above described taxes, as well as some water bills, and accepted under the terms of said assignment, and thereby agreed to accept whatever sum was paid as dividends from the sale of the assets of said partnership property so conveyed * * *." (Italics ours.)

The trial was to the court. The court rendered judgment overruling the pleas of privilege and said defendants have appealed.

The evidence showed that the Haneys, prior to 1931 and up to September 4, 1939, were doing a grocery and meat market business at Munday in Knox County under the name of Haney Grocery; that on September 4, 1939, a deed of assignment was executed to F. A. Lowe, for the benefit of the creditors of Haney Grocery. That the Haneys resided and had their business in Knox County; that Lowe at the time of the assignment and thereafter was an employee of Wooten Grocer Company and was requested by Haney to act as assignee; that at the date of the assignment the Haneys were indebted to Wooten Grocer Company and it had obtained a judgment foreclosing a mortgage lien on the fixtures of Haney Grocery.

For the purpose of this opinion we assume, without deciding, that plaintiffs, when they filed their claims with the assignee, had tax liens against the stock and fixtures of the Haney Grocery and plaintiffs' liens were superior to that of Wooten Grocer Company. Art. 7269, R.S.1925; Kirk v. City of Gorman, Tex.Civ.App., 283 S.W. 188; Salt City Co. v. Padgett, Tex. Civ.App., 186 S.W. 391; City of Ft. Worth v. Boulware, 26 Tex.Civ.App. 76, 62 S.W. 928; State v. Lowman, Tex.Civ.App., 115 S.W.2d 794, 799; State v. Nix, 134 Tex. 476, 133 S.W.2d 963, 966; Texas Bank & Trust Co. v. Bankers' Life Co., Tex.Civ. App., 43 S.W.2d 631; 30 Tex.Jur. 494; 37 Tex.Jur. 1021; 40 Tex.Jur. 206; 61 C.J. 947; 44 C.J. 1339; Mission Independent School Dist. v. Armstrong, Tex.Com.App., 222 S.W. 201; Black v. Baker, 130 Tex. 454, 111 S.W.2d 706; In re Brannon, 5 Cir., 62 F.2d 959; Texas Land & Cattle Co. v. City of Ft. Worth, Tex.Civ.App., 73 S.W.2d 860; Zachary v. City of Uvalde, Tex.Com.App., 42 S.W.2d 417; In re Cardwell, D.C., 52 F.2d 158; Cassidy South-western Commission Co. v. Duval County, Tex.Com.App., 3 S.W.2d 416.

The suit was not maintainable in Knox County under Sec. 5 of Art. 1995. There was no evidence adduced raising the issue that either of the appellants had contracted in writing to perform an obligation in Knox County. Venue in Knox County was not shown under Sec. 12. Plaintiffs' suit was a suit for conversion, not for foreclosure of a lien; but, if they had sought foreclosure of a lien, plaintiffs alleged that the property upon which a lien was asserted was not then situated in Knox County. See Wilson v. City of Belton, Tex.Civ.App., 206 S.W. 366. Exception 7 authorizes the maintenance of a suit in cases of fraud and defalcation of public officers in the county in which the fraud was committed or the defalcation occurred. The evidence was insufficient to raise an issue of fact as to a fraud or defalcation of a public officer in Knox County. The evidence was uncontradicted that the assignee sold the property to Wooten Grocer Company before it was moved from Knox County; there was no evidence that the sale was made in Knox County.

Plaintiffs seek to maintain the suit in Knox County under exception 30, upon the theory that Art. 266, R.S.1925, relative to statutory assignments, confers venue of this case in Knox County. It is at least doubtful that "venue is expressly prescribed" in Art. 266, within the meaning of exception 30, but, if Art. 266 conferred venue in the county in which the assignee resides, that would constitute no support for plaintiffs' contention here. The assignee in the instant case resides in Taylor County. The assignment involved in this suit is not the statutory assignment referred to in Art. 266, but is a common-law assignment. Plaintiffs so allege in their petition and state in their brief.

The only exception we deem worthy of extended discussion is number 9, which provides: "A suit based upon a crime, offense, or trespass may be brought in the county where such crime, offense, or trespass was committed, or in the county where the defendant has his domicile."

A conversion may constitute a trespass. Bowers v. Bryant-Link Co., Tex. Com.App., 15 S.W.2d 598; American Mortgage Corp. v. Smith, Tex.Civ.App., 35 S.W.2d 1092; Bramblett v. Roby State Bank, Tex.Civ.App., 67 S.W.2d 450. If plaintiffs' allegations and proof raise the issue that property upon which plaintiffs have a lien was converted by defendants in Knox County, then the judgment overruling appellants' pleas of privilege must be sustained.

Appellants' first proposition is that plaintiffs having pleaded and proved that they accepted under the assignment made by Haney Grocery to F. A. Lowe, assignee, and agreed to accept whatever sum was paid as dividends from...