Rio Tire Co. v. Spectralite

• Decision Date: 30 January 1932
• Docket Number: No. 12603.,12603.
• Citation: 48 S.W.2d 367
• Parties: RIO TIRE CO. v. SPECTRALITE, Inc.<SMALL><SUP>*</SUP></SMALL>
• Court: Texas Court of Appeals

48 S.W.2d 367

RIO TIRE CO. v. SPECTRALITE, Inc.^*

No. 12603.

Court of Civil Appeals of Texas. Fort Worth.

January 30, 1932.

Rehearing Denied March 5, 1932.

Error from District Court, Wichita County; P. A. Martin, Judge.

Suit by the Spectralite, Incorporated, against the Rio Tire Company, in which F. W. Fischer and others intervened. Judgment for plaintiff and interveners, and defendant brings error.

Reversed and rendered as to certain of the interveners, and reversed and remanded as to plaintiff and other interveners.

Britain & Cheek and Carrigan, King & Surles, all of Wichita Falls, for appellant.

Weeks, Morrow, Francis & Hankerson, Thelbert Martin, and Fischer & Fischer, all of Wichita Falls, for appellee.

BUCK, J.

On August 28, 1930, the plaintiff filed its original petition in the district court of Wichita county against the Rio Tire Company, a Texas corporation, doing business in Wichita county. Plaintiff alleged that it was a creditor of Eugene Segall who had theretofore transacted business in Wichita Falls under the trade-name of Segall Tire Company, and that the said tire company had been, from November, 1928, indebted to plaintiff in the sum of $4,700, together with interest, and from and after the first day of November, 1928, plus the sum of approximately $75 court costs, which indebtedness is and was conclusively established by judgment theretofore rendered in the Seventy-Eighth district court of Wichita county in cause No. 22219—B in the case of Spectralite, Inc., v. Eugene Segall. Plaintiff alleged that the said Eugene Segall is insolvent and has been insolvent since November, 1928, and for several months prior thereto, and that such fact is and was at all times heretofore mentioned well known to the defendant, and that plaintiff is unable to collect its said indebtedness from said Eugene Segall; that as a creditor of the said Eugene Segall plaintiff brings this suit against said defendant on behalf of itself and such other creditors of Eugene Segall as may have an indebtedness against him or who may hereafter intervene. Plaintiff further alleged that during the latter part of the year 1928, or in the early part of the year 1929, the said Eugene Segall, doing business as the Segall Tire Company, fraudulently transferred, sold, and assigned to the Rio Tire Company all of its stock of goods, wares, and merchandise located in the city of Wichita Falls, and such transfer and assignment of said property, which was reasonably worth in excess of the sum of $15,000, was made by the said Eugene Segall to the said Rio Tire Company with the intent to delay, hinder, and defraud plaintiff and other creditors of their debts, and such assignment of the aforesaid property by the said Eugene Segall to the Rio Tire Company is null and void under article 3996, Rev. Civ. Statutes, for the reason that its officers, agents, and representatives well knew at the time the said Rio Tire Company acquired said property of said Eugene Segall that said Segall was insolvent and was making said assignment of the said property to the Rio Tire Company with the fraudulent purpose and intention of defrauding his said creditors, among which was the plaintiff. That in truth and in fact said Eugene Segall transferred and assigned the aforesaid stock of goods, wares, and merchandise and accounts to the said Rio Tire Company for the fraudulent purpose and intention of giving a preference to the said Rio Tire Company on a past-due indebtedness of the said Rio Tire Company, which said fraudulent purpose and intention was well known to defendant, its officers, agents, etc.

Plaintiff further alleged that the sale to the Rio Tire Company was null and void under article 4001, Rev. Civ. Statutes, in that the said Eugene Segall and the said Rio Tire Company did not in said transaction comply with the provisions of the Bulk Sales Law of the state of Texas as the purchaser or transferee, and the Rio Tire Company did not demand and receive from the said Eugene Segall a written list of names and addresses of the creditors of the Segall Tire Company with the amount of the indebtedness due or owing to each and certified by the seller, Eugene Segall, under oath to be a full, accurate, and complete list of his creditors and of his indebtedness, and such purchaser did not, at least ten days before taking possession of the stock of goods, notify, personally, or by registered mail, each creditor whose name and address were stated on said list.

Plaintiff further alleged that it had not made any other creditors a party to this suit, for the reason that it did not know of any other creditors of the said Eugene Segall other than plaintiff, and asserted that, upon information and belief at the time of said transfer and assignment, the sole and only creditors of the said Eugene Segall, as was well known to defendant, were this plaintiff and the said defendants herein. That plaintiff is informed and believes that said transfer and assignment of said stock of goods, wares, merchandise, and fixtures was made in part to settle a debt owing by the said Eugene Segall to the said Rio Tire Company, or to the Good-year Tire Company, for whose use and benefit said transfer and assignment was made to the Rio Tire Company, which is in fact a mere dummy corporation who took title to the said property above described for the use and benefit of the Goodyear Tire Company, a creditor of Eugene Segall.

Plaintiff further alleged that the defendant is a successor in business to Eugene Segall, and that it assumed and agreed to pay all of the debts of the said Eugene Segall in consideration of his transferring and assigning to the said Rio Tire Company all of its goods, wares, merchandise, and fixtures located in Wichita Falls, Tex.

Whereupon, premises considered, plaintiff prayed that said defendant be cited in the terms of the law to appear and answer herein; that upon final hearing hereof plaintiff have a full accounting from the said defendant as to the goods, wares, merchandise, and fixtures received by it from the said Eugene Segall, and that plaintiff have judgment against the said Rio Tire Company to the extent of the assets coming into its possession for its proportionate share thereof as a creditor of the said Eugene Segall, and that judgment be entered against said defendant for plaintiff's debt, interest, and costs, as above set forth.

The defendant Rio Tire Company filed a plea in abatement, in which it alleged that the judgment alleged to have been rendered in cause No. 22219—B is not a final judgment, and the defendant further alleged, upon information and belief, that said cause has been appealed to the Court of Civil Appeals for the Second Supreme Judicial District, and that said defendant in said suit had a good and valid defense to plaintiff's alleged cause of action, and that said judgment could not and will not in any event become final until said appeal or writ of error shall have been finally disposed of in said court or the Supreme Court of this state. Wherefore, defendant said that said suit has been prematurely filed and cannot form the proper basis for the cause of action sued on, and that said suit against this defendant should be in all things abated.

The plea in abatement was overruled by the trial court. The trial court then ordered notice to be published in the Times Publishing Company, a Wichita Falls newspaper, for ten days.

On October 7, 1930, plaintiff filed his first amended original petition in which it alleged that its debt due by Segall was by virtue of a contract, in which Segall promised and agreed to pay to said plaintiff certain rentals on an electric lighted sign, and that said Segall failed and refused to pay said rentals, and there was a balance due of $5,600, and that Segall agreed to pay three-fourths of said balance due, amounting to $4,200. That on December 27, 1928, plaintiff instituted suit against Segall in the district court of Wichita county and recovered a final judgment against Segall in the sum of $4,700, together with interest and court costs. The alleged contract between Segall and plaintiff was attached to this second amended petition as an exhibit. There was also attached a memorandum of agreement entered into by Eugene Segall and the Rio Tire Company, by the terms of which said Segall sold and transferred to said Rio Tire Company all of his stock of goods, wares, and merchandise.

On December 9, 1930, plaintiff filed a supplemental petition, in which he answered certain allegations contained in defendant's original answer.

The cause was tried before a jury upon one issue, to wit: "Do you find from a preponderance of the evidence that the officers of the Rio Tire Company were informed or had knowledge of the claim of the Spectralite Company against Segall at the time they closed their trade with Segall? Answer: Yes."

The trial court overruled defendant's motion for a new trial. On December 30, 1930, plaintiff filed a motion for the entry of an interlocutory decree in its favor. This was contested, and the court overruled defendant's exception to plaintiff's motion for the entry of an interlocutory decree. The interlocutory decree was entered December 20, 1930.

In answer to the plea and request of plaintiff for defendant to file a verified statement of the goods, wares, and merchandise purchased by the defendant from said Segall, the defendant filed said verified statement, in which it showed that the total consideration involved, less 1929 tax accrual of $8.15, was $14,675.70, which consisted of merchandise, valued at $479.43, trade fixtures, valued at $722, prepaid insurance, $246.37, unexpired license on Ford cars, $32.30, accounts receivable, $7,737.30, tools, apparatus, etc., valued at $5,466.45.

It appears that no interventions were filed within the ten days in which the court...