Parlin & Orendorff Co. v. Harrell

• Decision Date: 31 October 1894
• Parties: PARLIN & ORENDORFF CO. v. HARRELL.
• Court: Texas Court of Appeals

27 S.W. 1084

PARLIN & ORENDORFF CO. v. HARRELL.

Court of Civil Appeals of Texas.

October 31, 1894.

Error from district court, Burnet county; W. A. Blackburn, Judge.

Action by the Parlin & Orendorff Company against R. L. Harrell, assignee, to recover goods sold to defendant's assignor. Judgment for defendant, and plaintiff brings error. Affirmed.

R. H. Ward and Warren W. Moore, for plaintiff in error. Geo. F. Pendexter and G. W. Allen, for defendant in error.

COLLARD, J.

The statement of the nature and result of this suit made in plaintiff in error's brief, and accepted as correct by defendant in error, is as follows: This was a suit for the possession of personal property. Plaintiff in error, a corporation duly incorporated under the laws of Illinois, and transacting business under a legal permit in Texas, brought this suit against R. L. Harrell, trustee under a deed of trust from Burns & Munn, conveying to him, without consideration, certain personal property, to secure certain preferred creditors, named therein, for the possession of certain personal property, to wit, certain wagons, etc. Plaintiff in error claimed title to the property in controversy by virtue of two contracts of sale to Burns & Munn, of date March 13, 1891, and July 27, 1891, wherein plaintiff in error reserved the title to the said property until the purchase money was paid. Said purchase money was never paid. Defendant in error claimed title to the property in controversy by virtue of a deed of trust from Burns & Munn, of date September 30, 1891, whereby they conveyed to the defendant in error, as trustee, the property in controversy, for the benefit of certain preferred creditors. After this suit was filed, the trustee sold the goods in controversy to the Moline Plow Company, who filed a claimant's bond and oath; but all these matters were divided and formed on the docket of the district court of Burnet county, Tex., two suits, — the suit we are now considering, and the suit of Parlin & Orendorff Co. v. Moline Plow Co., 27 S. W. 1087. These two suits come up by different transcripts, and will be separately considered. The cause was tried before the court, a jury being waived by both parties; and the court rendered judgment for the defendant, from which said judgment plaintiff prosecutes this cause by writ of error to this court.

The important facts necessary to a decision are as follows: Plaintiff sold the goods levied on to Burns & Munn upon two orders of the latter, which stipulated that the title to all the goods ordered shall be reserved and remain and be vested in the Parlin & Orendorff Company, until all the purchase money therefor should be fully paid, whether said purchase money shall be evidenced by notes or by open or stated accounts. The orders also stipulated that all proceeds of sales of goods should be held by Burns & Munn in trust for the Parlin & Orendorff Company, subject to their order so long as the former should owe them any sum of money under the contract. The orders were signed by Burns & Munn, and accepted and signed by plaintiff, — the first on March 3, and the second July 27, 1891. Plaintiff claims that the title to the goods had never passed to Burns & Munn under the terms of the contract, because the purchase price had not been paid, and consequently no title passed to Harrell by the trust deed to him. Plaintiff also claimed title to the goods because they were obtained from them by fraud on the part of Burns & Munn. Burns & Munn made a report of their financial condition to the Bradstreet Commercial Agency, April 1, 1891, and to the Dun Agency, showing:

                Merchandise on hand valued at.............. $  7,132 10
                Notes and accounts, $6,942.23, valued
                  at.......................................    6,942 23
                Real estate and live stock, after deducting
                  homestead exemptions
                  $2,300, valued at........................    1,600 00
                                                             __________
                                                             $15,674 33
                  Total assets stated to be................  $20,244 23
                                                             ==========
                Their liabilities closed by notes
                  stated at................................   $7,624 40
                And open accounts..........................    1,781 15
                                                              _________
                  Total liabilities........................   $9,405 55
                

The report also showed that their annual business amounted to $25,000. It furnished the names of their principal creditors, and gave as additional references the First National Bank at Burnet. The bank was communicated with as to the solvency of Burns & Munn, and a reply was received that they were good for the amount named, — $1,200. The goods were shipped and delivered to the purchasers after consulting the above report furnished by the agency, plaintiff relying upon the truth of the report. Plaintiff says that the report was false, and that it was defrauded by the false representations therein, and therefore their title to the goods never passed, and that they ought to recover them from the trustee. The trustee, Harrell, was holding the goods under a trust deed executed by Burns & Munn on the 30th day of September, 1891, which conveyed the property levied on, and all other goods in the business of the firm, and their notes and accounts, which notes and accounts are of the aggregate face value of $7,147.47. The deed of trust states that it was intended to better secure creditors named, and in the order named, to wit: Walter A. Tips, of Austin, in the sum of $310.92, evidenced by note, and $154.17, by account; John A. Webb, in the sum of $61.70, due by account; T. E. Hammond, of Burnet, $200; the David Bradley Manufacturing Company, of Chicago, Ill., in the sum of $1,694, evidenced by notes; the Moline Plow Company of Moline, Ill., in the sum of $707.08, evidenced by note, and $1,367.56, by account; the Parlin & Orendorff Company, of Dallas, Tex., in the sum of $3,235.91, evidenced by notes; the Mitchell Lewis Company, of Racine, Wis., in the sum of $1,528.30, evidenced by notes, — all the debts aggregating $9,259.64. The trustee is authorized to sell the goods for cash, and collect the notes and accounts delivered to him, and with the proceeds to pay the creditors in the order named. The deed of trust, duly acknowledged, was deposited with the clerk of the county court of Burnet county on the day of its execution, and was duly recorded by him on the 2d day of October. It is marked "Filed 30th of September, 1891," and entry made of such filing in the chattel-mortgage record. The goods were immediately upon the execution of the instrument delivered to the trustee, and he took possession of the same, and has continued to hold the same except when his possession was interfered with by plaintiff's writs of sequestration. The first writ was issued and levied on the goods on the 2d day of October, 1891, being a part of the goods sold by the Parlin & Orendorff Company to Burns & Munn. This writ was quashed on October 6th, and on the 7th of October another writ was issued and levied. After the first writ was quashed, and before the second was levied, the trustee, Harrell, sold the goods to the Moline Plow Company (one of the creditors named in the deed of trust), for the sum of $900 in cash, and delivered the same to them. The Moline Plow Company claimed the property by affidavit and bond after the second levy, and the sheriff delivered the goods to them. The testimony does not show that any of the creditors named in the deed of trust had accepted its terms and benefits before the writs of sequestration were levied, or either of them. Harrell testified that he had paid the creditors in the order named down to the Moline Plow Company, whom he yet owed about $700. His testimony was, of course, at the time of the trial, which was on April 6, 1892. The last writ was levied October 7, 1891. Harrell's testimony does not show when he paid the creditors. It also appears from the testimony that the notes given for the wagons sued for...