Mallette v. Ft. Worth Pharmacy Co.

• Decision Date: 27 May 1899
• Citation: Mallette v. Ft. Worth Pharmacy Co., 51 S.W. 859, 21 Tex.Civ.App. 267 (Tex. App. 1899)
• Parties: MALLETTE et al. v. FT. WORTH PHARMACY CO. et al.
• Court: Texas Court of Appeals

Page 859

51 S.W. 859

MALLETTE et al. v.FT. WORTH PHARMACY CO. et al.

Court of Civil Appeals of Texas.

May 27, 1899.

Appeal from district court, Tarrant county; Irby Dunklin, Judge.

Suit by J. G. Mallette and others against the Ft. Worth Pharmacy Company and others.Decree for defendants, and plaintiffs appeal.Affirmed.

Capps & Canty and McCormick & Spence, for appellants.S. T. Camp and Greene & Stewart, for appellees.

Conclusions of Fact.

STEPHENS, J.

On the 9th day of January, 1897, and for some time prior thereto, the Ft. Worth Pharmacy Company, a private corporation, was carrying on a retail drug business in the city of Ft. Worth.On that day, and while it was yet a going concern, though insolvent, its stock of drugs was seized under attachments levied at or about the same time, which prevented it from further prosecuting its business.The State National Bank of Ft. Worth, E. W. Childress, A. C. Walker, the Carter-Battle Grocery Company, and N. N.True were the several plaintiffs in these attachment suits, and their attachments were levied in the order named.Each of these attachments was sued out upon the ground that the pharmacy company was about to dispose of its property with intent to defraud its creditors.On January 14, 1897, J. G. Mallette and other creditors of the pharmacy company brought this suit, in behalf of themselves and all others similarly situated, against the company, its officers, stockholders, and the attaching creditors, causing its assets to be placed in the hands of a receiver, and seeking to have the attachment liens vacated upon the ground of fraud and collusion, in order that the assets might be distributed among all the creditors alike.When the case came on for trial, by agreement of the parties, the issue of fraud was submitted to a jury, and the other issues of fact to the presiding judge, and upon the findings of the judge and the verdict of the jury judgment was entered against plaintiffs below.Hence this appeal.We adopt, as amply sustained by the evidence, what was found by his honor, the substance of which is sufficiently given in the foregoing statement.We are also of opinion that the verdict must be accepted as establishing, there being sufficient evidence to sustain it, (1) that there was no collusion between the Ft. Worth Pharmacy Company and the attaching plaintiffs, or any of them, and (2) that, if the several affidavits for attachment were false, the parties making them did not know them to be false.We further find that the evidence tended very strongly, and without conflict, to show that the alleged ground for the attachment did not exist; and whether the attaching plaintiffs or any of them had or had not reasonable grounds for believing it to exist was a controverted question of fact raised by the evidence, the preponderance of which tended to show that they had not.

Conclusions of Law.

1.That one or more creditors of an insolvent corporation may fix a lien upon its property by attachment, and thus obtain a preference over other creditors, provided it has not ceased to carry on its business in the usual course of trade, must now be accepted as the law in this state, whatever may be the rule elsewhere.American Nat. Bank v. Dallas Tinware Mfg. Co., 39 S. W. 955, and cases there cited and reviewed by Judge Fly, a writ of error having been denied in that case.The facts above stated bring this case clearly within that rule.

2.That the affidavit for attachment is not traversable for the purpose of abating the writ and vacating the lien has been the recognized rule in this state since the decision in Cloud v. Smith, 1 Tex. 611.In the latest case reaffirming it, that of Gimbel v. Gomprecht(Tex. Civ. App.)35 S. W. 470, Justice Brown says: "The validity of the writ of attachment does not depend upon the truthfulness of the allegations made in the affidavit or the petition, but upon the compliance with the statute in making the affidavit."In many jurisdictions a different and possibly better rule prevails; but we must follow the rule so early adopted and long followed in Texas.Subsequent lien creditors, in the absence of fraud and collusion between the prior attacher and the debtor, have no rights in this respect superior to those of the debtor himself.They are, however, permitted to intervene and show that the older attachment is based upon a fictitious or fraudulent demand, or that the attachment is otherwise collusive, and thus vacate it.Nenney v. Schulter, 62 Tex. 327;Johnson v. Heidenheimer, 65 Tex. 263.It seems also to have been held in this state that a subsequent lien creditor may intervene and have the prior attachment vacated, where the...