South Texas Lumber Co. v. Nicoletti, 2241.

• Decision Date: 25 November 1932
• Docket Number: No. 2241.,2241.
• Citation: 54 S.W.2d 893
• Parties: SOUTH TEXAS LUMBER CO. et al. v. NICOLETTI.
• Court: Texas Court of Appeals

Page 893

54 S.W.2d 893

SOUTH TEXAS LUMBER CO. et al. v. NICOLETTI.

No. 2241.

Court of Civil Appeals of Texas. Beaumont.

November 25, 1932.

Rehearing Denied November 30, 1932.

Appeal from Jefferson County Court; W. S. Nichols, Judge.

Garnishment proceedings, ancillary to the suit of P. Nicoletti against J. G. Berwick, by P. Nicoletti against the Beaumont Building & Loan Company, which impleaded the South Texas Lumber Company and another, and against the South Texas Lumber Company, wherein garnishees filed cross-actions, which garnishment proceedings were consolidated. From the judgment, garnishees appeal.

Reversed and rendered.

Platt, West & Stevenson, of Houston, for appellants.

Adams & Moore and Morris & Bennett, all of Beaumont, for appellee.

O'QUINN, J.

This is a garnishment suit, ancillary to the suit of P. Nicoletti v. J. G. Berwick. October 16, 1929, Nicoletti recovered judgment in the county court at law of Jefferson county, against J. G. Berwick, for the sum of $260, together with costs of suit, and interest from the date of the judgment until paid at the rate of 6 per cent. per annum.

May 30, 1931, Nicoletti caused a writ of garnishment to be issued by the clerk of said court to the Beaumont Building & Loan Company, one of the appellants, which writ was duly served on same day. July 19, 1931, said garnishee filed its answer, in which it impleaded the South Texas Lumber Company and J. G. Berwick, defendant in the original cause. For convenience and brevity we shall refer to the Beaumont Building & Loan Company as the loan company and the South Texas Lumber Company as the lumber company.

In its answer, the loan company alleged that on January 28, 1931, L. W. Nelms and wife entered into a certain building contract with J. G. Berwick, as contractor, for the construction of certain improvements on land in the city of Beaumont in which they agreed to pay Berwick for said improvements the sum of $3,000, evidenced by a note of even date with the contract, payable to said Berwick on or before 60 days with 8 per cent. interest, secured by a lien created by said contract; that by an unrecorded assignment dated January 28, 1931, Berwick transferred and assigned said note and lien to the lumber company; and that it, said garnishee, was informed and believed that thereafter said lumber company claimed it was the legal owner and holder of said indebtedness and note and lien securing the payment of same. That about March 31, 1931, said Nelms applied to said loan company for a loan, which was approved for $2,500, with which to take up the balance of said original indebtedness and lien; that in order to carry out the loan, inasmuch as the transfer to the lumber company had not been recorded, a transfer was taken direct from said Berwick to the loan company, said transfer being dated May 28, 1931, but that said loan company was then notified and informed that said lumber company was the owner of said original note and lien by virtue of said unrecorded transfer from Berwick, dated January 28, 1931, and that said lumber company was entitled to the proceeds of said loan of $2,500; that about said date, May 28, 1931, said lumber company delivered to said loan company said unrecorded transfer dated January 28, 1931, and the original note for $3,000 of said date, but that before payment was made of the proceeds of said loan, a writ of garnishment was served on it, said loan company, on May 30, 1931, whereupon it, said garnishee, retained in its possession said funds pending the termination of the cause.

June 29, 1931, Berwick answered the plea of the loan company, disclaiming any interest whatever in the funds held by the garnishee, and admitted that said funds and the proceeds of said loan belonged to the lumber company, and that he (Berwick), had long prior to the issuance of the garnishment writ, parted with his interest in or to said funds.

June 29, 1931, the lumber company filed its original answer to the pleading of the loan company, and on October 6, 1931, filed its amended answer duly verified. In said answer the lumber company alleged that it had purchased the original note from Berwick January 28, 1931, and had long prior to the issuance of the writ of garnishment fully paid Berwick the full consideration therefor and had been in the possession of said note since the date of its execution as the sole owner and holder thereof, and that Berwick had no interest in the note or the proceeds of the loan being made by said garnishees. That about August 20, 1931, $1,900 of said fund was paid to it, said lumber company, by said loan company under an agreement with the plaintiff, Nicoletti, but that the remainder, $600, was being withheld from said lumber company by said loan company, and prayed for judgment against plaintiff Nicoletti and said loan company for the said $600, attorney's fees, interest, and costs of suit.

Subsequent to the service of the writ of garnishment on the loan company, on June 25, 1931, plaintiff Nicoletti caused a writ of garnishment to be issued against appellant lumber company, which was duly executed the same day. June 27, 1931, said lumber company answered said writ denying that it was indebted to said Berwick in any amount whatever, and denied that it had in its possession any effects belonging to said Berwick, and denied that said Berwick was the owner of any shares of stock in said lumber company, and that it did not know of any person who was indebted to Berwick, and prayed that it be discharged with its costs and attorney's fees.

On motion of Nicoletti the two garnishment suits were consolidated, and the cause proceeded under the style P. Nicoletti v. J. G. Berwick, Defendant, and South Texas Lumber Company, Garnished.

October 8, 1931, Nicoletti filed his answer to the pleadings of the two garnishees and defendant Berwick. In his answer he alleged that there was no transfer from Berwick to the South Texas Lumber Company of the original Nelms note and lien; that if there was such transfer, the same was not recorded and was, therefore, void as to garnishor, who had no notice, actual or constructive, of said transfer; that if such transfer was actually made, it was an assignment of an interest in land, subject to the registration statutes of frauds, and subject to the lien given any judgment creditor who abstracts, records, and indexes his judgment; that prior to the giving of the note and lien by Nelms, he (Nicoletti) had caused his judgment against Berwick to be duly abstracted, recorded, and indexed in the office of the county clerk of Jefferson county, Tex., which gave to plaintiff a lien against the interest of Berwick under the mechanic's lien contract made by Berwick with Nelms and wife; that the South Texas Lumber Company knew of the judgment which plaintiff had against Berwick; and that it, said lumber company, became the transferee of said note and lien without recording same, with intent to hinder, delay, and defraud the creditors of said Berwick, and that said lumber company was trustee for the benefit of the creditors of Berwick, and, but for said fraudulent scheme and plan, plaintiff could have known that said note and lien were transferred to said lumber company, and could have garnisheed said company. He further alleged that said lumber company had reconveyed said note and lien to Berwick and that Berwick was the owner thereof on May 28, 1931, when he (Berwick) assigned same to the loan company; that said lumber company knew of plaintiff's claim and was not a bona fide purchaser of said note and lien.

October 12, 1931, the lumber company filed supplemental answer to plaintiff Nicoletti's pleading mentioned above, consisting of a general demurrer, numerous special exceptions, again denied that it was indebted to Berwick or had effects in its possession belonging to him, or that Berwick was the owner of any shares of stock in the company, and by cross-action, the particulars of which need not here be stated, prayed for judgment against Nicoletti for the sum of $600, with attorney's fees, interest, and costs of suit.

All the exceptions of garnishee lumber company were overruled, and the causes, as consolidated, were tried to the court without a jury, and judgment entered in favor of plaintiff Nicoletti against garnishees Beaumont Building & Loan Company and South Texas Lumber Company, for the sum of $260, with interest thereon at the rate of 6 per cent. per annum from October 16, 1929, and all costs, including those in the garnishment proceedings, and that South Texas Lumber Company recover nothing by its cross-action against Nicoletti, but that it recover of the Beaumont Building & Loan Company the remaining amount due out of the $600 after the judgment of plaintiff Nicoletti had been paid. By its judgment the court found that the Beaumont Building & Loan Company was indebted to the defendant Berwick in the sum of $600 at the time the writ of garnishment was served upon it, and that garnishee South Texas Lumber Company, at the time the writ of garnishment was served upon it, had in its possession effects of defendant Berwick and...