Stanard v. Cantwell

• Citation: 286 S.W. 760
• Decision Date: 16 June 1926
• Docket Number: (No. 2707.)
• Parties: STANARD v. CANTWELL.
• Court: Texas Court of Appeals

286 S.W. 760

STANARD v. CANTWELL.

(No. 2707.)

Court of Civil Appeals of Texas. Amarillo.

June 16, 1926.

Rehearing Denied June 30, 1926.

Appeal from District Court, Hale County; R. C. Joiner, Judge.

Suit by A. L. Cantwell against the Conservative Loan Company of Texas, in which a writ of garnishment was issued against the First National Bank of Plainview, and in which E. C. Stanard, trustee, intervened. From a judgment for plaintiff against the garnishee and intervener, the latter appeals. Judgment reversed and reformed, and as reformed affirmed. Intervener's suit dismissed, and judgment rendered for plaintiff.

Graham & Graham, of Plainview, for appellant.

Williams & Martin, of Plainview, for appellee.

RANDOLPH, J.

A. L. Cantwell brought suit in the district court of Hale county, Tex., against the Conservative Loan Company of Texas, for commissions alleged to be due him from said company, hereinafter styled the Texas Company, and, pending such suit, procured the issuance of a writ of attachment in said cause, and thereafter procured the issuance of a writ of garnishment in said cause, which writ of garnishment was directed against the First National Bank of Plainview, Tex. By such writ there was impounded funds in the possession of said bank, which the bank, by its answer duly filed, admitted having in its custody. This money was paid into the registry of the court by the bank, amounting to $997.40, which it paid subject to the orders of the court.

E. C. Stanard, of Shawnee, Okl., intervened in said garnishment suit and asserted his right and title to said fund as trustee for certain bondholders of the Conservative Loan & Trust Company of Oklahoma, a corporation organized under the laws of the state of Oklahoma, which company is hereinafter designated the Oklahoma Company.

The court, without the intervention of a jury, tried out the issues in the garnishment suit after consolidating it with the original suit for debt in the same court, and rendered judgment that the intervener, E. C. Stanard, take nothing by his plea of intervention, and that the plaintiff, Cantwell, do have and recover of and from the First National Bank of Plainview, Tex., and of and from the intervener, E. C. Stanard, the said sum so held by said bank and which had been paid into court by the bank, to wit, the sum of $997.40. From this judgment the intervener has appealed to this court.

The Conservative Loan & Trust Company, as stated above, was an Oklahoma corporation, which was engaged in the business of loaning money on land security. It sought to engage in business in the state of Texas, and for that purpose employed Groves & Cantwell, a partnership, as its local agents. Said company was advised by its attorney, C. D. Russell, of Plainview, that it could not legally transact such business in Texas without first securing a permit, and he suggested that the most satisfactory plan would be for the interested parties to form a Texas corporation. Judge Russell was on the stand as a witness and testified that the parties who were in consultation with him, and who were officers of the Oklahoma company, said that at the time they were formerly doing business in Texas, they had organized a Texas company with general offices at Wichita Falls, Tex., but they were of the opinion that the charter of the concern had been forfeited. They later wrote Russell that the charter had not been forfeited but was still alive and there was no necessity for taking any further steps; that "Conservative Loan Company of Texas" was the name of the concern; and that they were ready for business under that name. He also testified that he addressed all of his opinions of titles of property to the Texas Company and that all deeds of trust made out for loans were made to the same company.

One Annetta Berry, joined by her husband, M. J. Berry, applied through Groves & Cantwell, or through Cantwell, for a loan from said Texas Company, and executed notes therefor, payable to said Texas Company, together with deeds of trust upon land in Hale county to secure their payment, in which deeds of trust the Texas Company was made the beneficiary.

Pending the negotiations for the loan from said Texas Company, a party by the name of Britton purchased said land from Berry and wife, and became responsible for the repayment of said loan.

The notes executed by Berry and wife and payable to the order of the Texas Company, consisted of one principal note in the sum of $12,800 and five commission notes, each in the sum of $384. The principal note was secured by a deed of trust, as stated above, upon the land sold by Berry and wife to Britton, which was a first lien on the land, and the five notes were also secured by deed of trust on the same land, but was made subordinate to the lien securing the principal note.

The Texas Company lost its capital stock and ceased to do business and, as claimed by appellant, had become indebted to the Oklahoma Company in the sum of $13,000.

The Oklahoma Company and the intervener entered into a trust agreement, containing the stipulations which are relied on as furnishing the basis of the intervener's title to the notes and proceeds thereof in controversy, which stipulations are as follows:

"This indenture, made in duplicate this 25th day of February, 1921, between the Conservative Loan & Trust Company, a corporation organized under the laws of the state of Oklahoma of the first part, and E. C. Stanard, hereinafter called the `trustee,' of the second part, Witnesseth:

"Whereas, said Conservative Loan & Trust Company is making from time to time loans on farm properties in the state of Oklahoma, and elsewhere, and has received and will receive from its commissions upon said loans mortgages upon the premises upon which the loans are granted second and subject to said loans, which loans do not exceed fifty per cent. of the appraised value of the property upon which said loans are made, and, whereas, said Conservative Loan & Trust Company has resolved, in pursuance of due corporation action, to issue from time to time its bonds or certificates of indebtedness, and to secure the payment of the principal and interest of said bonds by executing this indenture, and by pledging and depositing with the trustee, subject to the conditions herein contained, commission mortgages and obligations in connection herewith, which shall at all times aggregate in their principal or face value 125 per cent. of said bonds or certificates of indebtedness outstanding, and, whereas, said trustee has agreed to accept and undertake the trust as herein created upon the terms and conditions herein contained:

"Now, therefore, it is covenanted and agreed by and between the parties hereto, as follows:

"First: The bonds or certificates of indebtedness of said Conservative Loan & Trust Company to be issued hereunder may be of any denominations and any maturities as shall be deemed most convenient by the said Conservative Loan & Trust Company and by the purchasers thereof. The form of the bonds or certificates of indebtedness to be issued hereunder shall be substantially as follows: (Here follows copy of certificate or bond to be...