Crow, Hargadine & Co. v. Red River County Bank

| Tex. | Dec 12, 1879

Bonner, Associate Justice.

We are of the opinion that the plea to the jurisdiction of the District Court was not vrell taken. This court, and not the County Court, had jurisdiction of the demand of appellee, the Bed Biver County Bank, the amount of the principal being $1,200,

The petition of the hank alleged that the property mortgaged to secure this debt had been seized under writs of attachment from the County Court, which were subordinate to the lien of the - mortgage; that the same was liable to waste, &c. The bank could not intervene in the attachment suits for want of jurisdiction in the County Court over its claim, and was virtually remediless unless the jurisdiction of the District Court could be invoked and the other creditors be restrained from further proceedings under their attachments until the respective rights of all the parties could be ascertained. This was sought to be effected by the suit in. the District Court, in which all the creditors were made parties, and the property protected by the appointment of a receiver.

This jurisdiction is analogous to that exercised by a court of chancery, where its jurisdiction is separate from that of a court of law, by which it is the common practice to enjoin proceedings at law, though had in a court of equal dignity, but inadequate to administer the appropriate relief until the rights of the parties could be adjusted. '

By express constitutional provision, the District Court has power to issue writs of injunction and all other writs necessary to enforce its own jurisdiction. (Const. of 1876, art. 5, sec. 8.)-

The fact that T. M. Young, the indorser of the notes, is not alleged to be insolvent, would not defeat the right of the bank to ask the equitable interposition of the court, as it had the right to rely upon the security given by the mortgage. (Paschal’s Dig., art. 1479; Delespine v. Campbell, infra, 4.)

The second and fourth errors assigned raise the question of the validity of the mortgage for want of certainty in the description of the property mortgaged. This is as follows: “ All of the stock of dry goods, groceries, &c., and all goods of whatever description which we have at Annona, Texas; also the stock of goods which we have at Dalby Springs, Bowie county, Texas.”

The description of the property mortgaged should be so sufficiently certain that it can be reasonably identified from other similar articles, and should he such as would enable third parties to ascertain the same by the aid of those inquiries which the mortgage itself indicates and directs. (Herm. on Chat. Mort., sec. 37.)

If thus certain, then a schedule or other specific description need not be given, however advisable that this be done. (Linn v. Wright, 18 Tex., 317" court="Tex." date_filed="1857-07-01" href="https://app.midpage.ai/document/linn-v-wright-4888751?utm_source=webapp" opinion_id="4888751">18 Tex., 317.)

The following description of property contained in a mortgage has been decided to be sufficient: “All the dry goods, boots and shoes, millinery goods, and gentlemen’s furnishing goods, and stock in trade then in the store occupied by the mortgagors.” (Conkling v. Shelley, 28 N.Y., 360" court="NY" date_filed="1863-09-05" href="https://app.midpage.ai/document/conkling-v--shelley-3590995?utm_source=webapp" opinion_id="3590995">28 N. Y., 360; Gardner v. McEwen, 19 if. Y., 123.)

The mortgage under consideration does not purport to convey an undefined part of a stock of goods, but all of the goods, groceries, &c., belonging to the mortgagors in two certain named places. Although the description is not so certain as would be desirable, yet, we think, sufficiently so for the property, upon inquiry, to be found and identified; and in view of this, and in the light of the above authorities, we are of opinion that the mortgage should not be held void for want of sufficient description.

Under the fifth alleged error, the appellants submit the question, that the mortgage is void in law without regard to the bonajides or malajides of the parties, and also that it is void in fact.

In the case of Peiser v. Peticolas, 50 Tex., 638" court="Tex." date_filed="1879-07-01" href="https://app.midpage.ai/document/a-peiser--co-v-peticolas-4893187?utm_source=webapp" opinion_id="4893187">50 Tex., 638, this court decided that a mortgage upon a stock of goods, when the mortgagor retains possession and, with the knowledge and consent of the mortgagee, sells them in the usual course of trade, and applies the proceeds to replenish the stock, and not to the payment of the debt, was void as being against public policy and inconsistent with the true purposes of a mortgage; that if the intent and purpose of the parties to make such a mortgage are manifest from the terms of the instrument itself, it should be declared void by the court; that if not thus shown, then it is a question of fact for the jury, who should find against the validity of the mortgage, if this intent and purpose are shown by uncontradicted testimony.

The mortgage in this case is in the usual form, and does not contain any-stipulation that the mortgagors should remain in possession of the goods and sell them in the usual course of trade, and apply the proceeds to their own benefit or to the purchase of other goods.

The testimony tended to prove, that though the mortgagors remained in possession and sold the goods, they did so as agents of the mortgagees.

If a mortgage be given on a stock of goods to secure a bonafide debt, the fact that the mortgagors remained in possession and sold the same as agents of the mortgagees, and applied the proceeds to the payment of the debt, would not, of itself, render the mortgage void. Such contracts should not be- encouraged by the court, as they have a tendency to throw open too wide the door for possible fraud. One objection to: them, however, would be obviated if the mortgagee be held accountable for a proper disposition of the property and application of the proceeds.

In this case, the bank was charged by the judgment below with the amount of the proceeds of the goods sold.

The testimony further tended to prove, that though other purchases were made of staple articles for the purpose of making the mortgaged stock salable, they were not mixed with the original stock, and that the proceeds of the- sale of the same were kept separate and applied to their payment.

Although there were strong badges of fraud' connected with the transaction, yet they did not necessarily constitute such legal fraud as would have authorized the court below to declare the mortgage void as a question of law, and. the facts of the case do not come within that of Peiser v. Peticolas, 50 Tex., 638. (Herm. on Chat. Mort., sec. 103.)

Whether the mortgage was fraudulent in-fact, was directly submitted to the court, and wo cannot say. that the weight of evidence was so strong against the good faith of the transaction as, under the rules of practice, would authorize us to reverse the judgment. The same is accordingly affirmed.

[Opinion delivered December 12, 1879.]

Aebtrmed.