Opinion
Application No. 21,564.
Decided October 30, 1935.
Constitutional Law — Receivers.
The Act of the Forty-third Legislature relating to the appointment of receivers for debtors and providing for the adjustment and reorganization of their business by the setting aside of a certain portion of the assets of the debtor to which creditors may look for the satisfaction of their claims, and upon confirmation of the plan and termination of the proceedings the debtor may be discharged from his debts, and upon reorganization the court may retain jurisdiction of the case so long as may be necessary, is unconstitutional, being in contravention of Article 1, Section 16 of the Constitution of Texas which forbids the impairment of contracts.
Error to the Court of Civil Appeals for the Eleventh District, in an appeal from Palo Pinto County.
Suit by John Doan and others seeking to restrain the Cattle Raisers Loan Company from prosecuting a certain suit filed by them to foreclose a deed of trust given by the said Doan and others. Alleging among other things that their assets were frozen and that the property could not be sold for a fair value and that under the Act of the 43rd Legislature, third called session, chapter 24, page 43 (Vernon's Texas Civ. Stat., art. 2320a), known as an "Act for the Reorganization of Distressed Debtors" they asked that a receiver be appointed to take charge of their said property. Judgment of the trial court granting the injunction was reversed by the Court of Civil Appeals and the case dismissed. The court holding said Act of the Legislature unconstitutional ( 86 S.W.2d 252) and Doan has brought error to the Supreme Court.
Application refused.
W. H. Penix, of Mineral Wells, for plaintiff in error.
The application for writ of error is refused because of our approval of the decision of the Court of Civil Appeals holding that the Act of the Legislature involved in the cause is in contravention of Article 1, Section 16, of the Constitution of Texas. We deem it unnecessary to determine, and we do not determine, whether the Act violates any provision of the Constitution of the United States.
Opinion delivered October 30, 1935.