22 S.W.2d 765 | Tex. App. | 1929
This appeal is prosecuted by Central National Bank, represented and acting herein by its liquidating committee, but hereinafter called bank, and J. M. Smith, hereinafter called by name, from a judgment awarding the sum of $1,588.35 in. the hands of the Gulf, Harrisburg San Antonio Railway Company, garnishee herein, to Latham Co., garnishing creditors of Early-Foster Company, judgment debtor. Said Latham Co. will be hereinafter called appellees.
The record is complicated. No purpose could be served by reciting the same in detail. Judge Sam. R. Scott and W. M. Foster also were parties to this suit, and each claimed the fund in controversy in separate right. They were each denied any recovery by the trial court, and neither of them has appealed. The bank and Smith each claimed in separate right, and each is prosecuting a separate appeal.
Appellant Smith claims $1,507.15 of the fund in controversy as assignee of Early-Foster Company. Said corporation, on and before October 6, 1921, had pending before the Interstate Commerce Commission certain claims against various railroads for overcharges on freight shipped by and to it over their respective lines. One of such claims was against the garnishee, Gulf, Harrisburg San Antonio Railway Company for a large sum of money. On said last-named date, Early-Foster Company, acting by its president, W. M. Foster, employed Smith to prosecute said claim before said Commission. The original contract was verbal, but was confirmed by an exchange of letters made the same day. The letter of Early-Foster Company to Smith stated, in substance, that it turned over to him said claim "on a basis of thirty per cent. of the amount youcollect; the claim to be payable to us and we to pay you out of what wereceive." The letter of Smith to Early-Foster Company acknowledged a preceding verbal agreement on the same day to assist in recovering on such claim, and stated, "In consideration of which you agreed to pay us thirtyper cent. of the amount recovered from the railroads on these shipments." (Italics ours.) The sum of $5,023.83 was recovered on said claim. All of such recovery, except said sum of $1,588.35 remaining in the hands of the garnishee, had been appropriated to satisfy a prior garnishment. Smith had *767 never been paid anything for his services. The garnishee admitted that it was indebted to Early-Foster Company in said sum, and offered to pay the same as directed by the court. It made Smith and said bank parties to said proceeding on the ground that they were each setting up some claim to the fund in its hands.
The bank claims the fund in controversy under a written assignment executed and delivered to it by Early-Foster Company on December 4, 1922. Said assignment recited that it was made as collateral security for all sums then or thereafter owed the bank by the assignor. Thereafter, on April 25, 1923, Early-Foster Company became indebted to the bank in the sum of $2,000, evidenced by its promissory note bearing said date and due on demand. Said note had never been paid. The bank answered in this proceeding and sought recovery of the fund in controversy as such assignee for the purpose of applying the same to the satisfaction of its indebtedness evidenced by said note. No suit was instituted on said note within four years after its date, but the bank answered and asserted its claim to said fund within said period of time.
Appellees Latham Co., as judgment creditors of Early-Foster Company, claim under garnishment proceedings instituted by them, with due service of writ therein.
A trial to the court resulted in judgment that both Smith and the bank take nothing by their respective suits, and that appellees recover of the garnishee the entire fund in its hands.
Appellant bank also presents as ground for reversal a single proposition. It contends therein, in substance, that, inasmuch as it held an assignment of the fund in controversy as collateral security for its debt, it was entitled to recover the same and to apply such recovery when collected to the satisfaction thereof, notwithstanding its note evidencing such indebtedness was barred by the statute of limitation at the time of trial. That Early-Foster Company was indebted to the bank in the full amount of said note; that the fund in controversy had been assigned to it as collateral security therefor, and while an action on said note was at the time of the trial herein barred by the statute of limitation, that such action was not barred at the time it answered herein asserting its claim to such fund — were facts not disputed. The court so found. Appellees claimed the right to recover such fund solely on the ground of the service of their writ of garnishment on said railway company. The record shows that such writ was so served long after the execution, delivery, and acceptance of such assignment.
Appellees seek to justify the action of the court in denying appellant bank a recovery on its assignment and in awarding the fund in controversy to them, on the ground that such assignment did not constitute a pledge, that there was no such delivery as to subject the claim assigned to the sole dominion, possession, or control of said bank, and that the bank, having permitted its debt to become barred, could not enforce such assignment to their prejudice as garnishing creditors. The term "collateral security" refers to personal property exclusively, and, in *768
common parlance, to choses in action. The transaction by which collateral security is delivered by the debtor and accepted by the creditor constitutes a pledge. 11 C.J. 962 (top first column); A. H. Averill Machinery Co. v. Bain,
The fact that an action for the recovery of a debt is barred by the statute of limitation does not destroy the debt. The bar affects the remedy only. The right of the creditor to receive payment continues after the bar, and will support a new promise of payment or justify the sale of pledged property by the pledgee under power either express or implied, and the application of the proceeds of such sale to the discharge of such debt. In such cases the debtor cannot enjoin the sale without tendering payment of the debt, notwithstanding such bar. Goldfrank, Frank Co. v. Young,
The holder of collateral security, unless restrained by the terms of his contract of pledge, may sue and recover thereon in his own name and apply the proceeds of his recovery when collected to the satisfaction of his debt. McDaniel v. Chinski,
The court found the facts necessary to entitle appellant bank to a judgment against the garnishee for the full amount of the fund in its hands to the exclusion of appellees Latham Co. He refused to render such judgment solely on the ground that the note held by the bank against Early-Foster Company the principal debtor, was barred by limitation. This error of law requires reversal. There being no matter of fact to be ascertained, it is our duty, as between appellant bank and appellees Latham Co. and the garnishee, Gulf, Harrisburg San Antonio Railway Company, to render the judgment which should have been rendered below.
The judgment of the trial court denying appellant Smith and appellees. Scott and Foster, respectively, any recovery herein, is affirmed. The judgments of the trial court denying appellant bank any recovery and awarding appellees Latham Co. recovery of the fund in controversy against the garnishee are both reversed, and judgment is here rendered awarding to said bank a recovery against said garnishee of the funds in its hands as aforesaid, and denying appellees any recovery herein.
BARCUS, J., took no part in the consideration and disposition of this case. *947