Shield Co. v. Cartwright

• Decision Date: 09 February 1944
• Docket Number: No. 8183.,8183.
• Citation: 177 S.W.2d 954
• Parties: SHIELD CO., Inc., v. CARTWRIGHT et al.
• Court: Texas Supreme Court

177 S.W.2d 954

SHIELD CO., Inc., v. CARTWRIGHT et al.

No. 8183.

Supreme Court of Texas.

February 9, 1944.

Rehearing Denied March 8, 1944.

Error from Court of Civil Appeals of Second Supreme Judicial District.

Sequestration proceeding by the Shield Company, Inc., against Roy A. Cartwright and another, in which Ben. M. Gilbert, defendant's trustee in bankruptcy, intervened. The judgment rendered was affirmed by the Court of Civil Appeals, 172 S.W.2d 108, and plaintiff brings error.

Affirmed without prejudice to defendants' right to apply for stay of execution.

Richard Owens and Hampden Spiller, both of Ft. Worth, for plaintiff in error.

Geo. M. Hopkins, of Denton, for defendant in error Cartwright.

Melvin F. Adler, of Fort Worth, for defendant in error Gilbert.

TAYLOR, Commissioner.

This suit originated in a sequestration proceeding in a state court by a wholesale concern against a retail customer. The customer subsequently filed a voluntary petition in bankruptcy and was adjudged a bankrupt. Thereupon a trustee appointed by the bankrupt court intervened herein.

Shield Company was the wholesaler and sold to the retail concern (Roy A. and William M. Cartwright doing business under a trade name), several orders of merchandise, the first, on December 10, 1941. The merchandise consisted of radios and stoves (ranges) and subsequent orders therefor were filled in the same month and in January following. Early in February (Feb. 12, 1942) the company sequestered the merchandise remaining unsold, and a week later (Feb. 19) the Cartwrights filed a voluntary petition in bankruptcy in the District Court for the Northern District. They were adjudged bankrupts the same day, and sometime in March filed a plea in abatement in this cause. On May 25, 1942, they amended same in which they stated they had been adjudged bankrupts; that Ben M. Gilbert at the time of such adjudication was appointed trustee; that the administration of their estate was pending in the bankruptcy court, and that such court alone had jurisdiction of the matters in controversy. On June 12th the Cartwrights, still insisting on their plea in abatement, filed their original answer, presently to be referred to.

Shield Company sequestered the unsold merchandise upon its statutory affidavit that it owned and had the right of possession of same, its view being reflected in its allegations that due to fraudulent representations on the part of the Cartwrights title to the goods did not pass to them.

The Cartwrights in their answer denied the company's allegations, and further alleged that at the times of purchasing the merchandise they believed they would be able to pay for same on the respective due dates of the orders; that upon finding they could not do so they, on February 11, 1942, wrote their creditors offering to make an assignment for their benefit; that on the next day the company caused its writ of sequestration to issue; and that thereupon they filed their voluntary petition in bankruptcy and were adjudged bankrupts as stated above. They also alleged that since their estate was being administered by the bankrupt court the state court was without jurisdiction to render any judgment against them in the sequestration suit. They denied specially that they fraudulently caused the company to sell to them and denied that they caused the sales to be made by false representations contained in reports of their financial condition to Bradstreet and Dunn. They concluded their answer by disclaiming any and all interest in the controversy in the suit.

On September 21st the company filed its amended petition alleging, among other things, that the stoves were sold by it upon a "floor plan", or "trust receipts" plan, substantially similar to that involved in C. I. T. Corporation v. Haynie, Tex.Civ.App., 135 S.W.2d 618, which entitled it to certain relief with respect to the sale of the stoves, later to be referred to. Its prayer in full for relief against the Cartwrights was "that its said contracts of sale be rescinded and that it have judgment for title and possession of the property * * *, or if same has been disposed of by defendants, for the reasonable value of such as has been disposed of, and for * * * general relief."

The pleadings of the trustee in bankruptcy are brief. After setting out that the Cartwrights had been adjudged bankrupts he alleged his appointment as trustee by the bankruptcy court and that he was intervening in this cause by virtue of an order entered by the referee in bankruptcy directing him so to do. He further alleged the issuance of the writ of sequestration whereby the merchandise was repossessed by Shield Company, the company's lack of authority to rescind the contracts of sale thereof, and his own right to recover of the company title and possession; or, in event of conversion by the company, to recover from it the highest market value thereof between the time of conversion and the time of trial.

The company filed no pleading subsequent to its first amended petition referred to above and made no allegation of any character of or concerning the trustee, and made no reply to the trustee's pleadings in intervention, and sought no relief against him.

The jury found, in effect, that the Cartwrights had not been guilty of fraud in procuring the credit upon the strength of which the merchandise was purchased by them, in that the company in filing the orders therefor acted solely upon information obtained from sources other than the Cartwrights.

The trial court correctly overruled the Cartwrights' plea in abatement questioning the court's jurisdiction to try the case. It overruled the respective requests of the Cartwrights and the trustee for instructed verdicts, respectively; and after return of the jury's findings overruled the motions of the Cartwrights and the trustee, respectively, for judgment notwithstanding the jury's verdict.

The court found upon consideration of the verdict that Shield Company converted, on the date of sequestration (Feb. 12, 1942) the radios of the defendants (Cartwrights) of the value of $455.40, and proceeded as a result of such finding to award the trustee judgment against Shield Company for that amount with interest from the date of the conversion.

The court then overruled the company's motion for judgment non obstante veredicto, and found that the Cartwrights had not paid the company the purchase price of the radios, which was found by the court to be $766.80 less a credit of $33.75; and upon this finding rendered judgment in favor of the company against the Cartwrights for $733.02, with...