Opinion
No. 3937.
January 8, 1931.
Appeal from District Court, Harrison County; Geo. W. Johnson, Judge.
Action by E. D. Houlle against the Watters Oil Company. Plaintiff obtained judgment, and sued out a writ of garnishment against Charles R. Martin, Clerk of the District Court of Harrison County. From a judgment discharging the garnishee, plaintiff appeals.
Affirmed.
The appellant who was the plaintiff in garnishment proceeding has appealed from a judgment of the court discharging the garnishee. It appears that the appellant filed suit in the district court of Harrison county against the Watters Oil Company and obtained a personal judgment on December 17, 1929, in the sum of $1,234.75. Thereafter, on the 30th day of December, 1929, the plaintiff sued out a writ of garnishment against Charles R. Martin, clerk of district court, Harrison county, Tex. On December 31, 1929, the clerk as garnishee filed his answer in garnishment, setting up the facts relating to the deposit in his hands, as clerk, of a certain sum of money. It appears that in December, 1926, E. B. Whitworth filed suit in the district court of Harrison county against the Watters Oil Company, setting up that the officers of the corporation were using the assets and property of the corporation for their own use and benefit and depriving the corporation of its revenues and income, and that the plaintiff, entitled to stock and to be a stockholder in such company, was liable to loss and serious injury by reason of such misconduct and mismanagement, and asked for judgment for his claim, and for the appointment of receivers to take charge of the property of the corporation.
After hearing the application, the court appointed receivers of the property of the Watters Oil Company, which receivers duly qualified. Thereafter, on November 5, 1928, the receivers made the following report:
"In the District Court of Harrison County, Texas. November Term A.D. 1928.
"E. B. Whitworth v. Watters Oil Co. No. 6259.
"Now come Hobart Key and William F. Young, heretofore appointed by the court as receivers of the Watters Oil Company and report to the court that they have collected as such receivers from the Magnolia Gas Company, the sum of $1960.00 and that said money is on hand except $100.00 which has been paid under order of this court to the receivers for traveling expenses of the receivers and the further sum of $40.00 paid to Long Strong at Carthage, Texas, for supplementing an abstract of title to the lease whereon is located the gas well in which the Watters Oil Company owns an interest. That all of such expenditures were authorized by the court and were necessary and proper and that there remains on hand, the sum of $1820.00 which is here tendered into court.
"The receivers show to the court that there is no other act or thing to be done by them in connection with said property or receivership except to receive and receipt for, a small monthly amount for gas taken by the Magnolia Gas Company from one well in which said Watters Oil Company has an undivided interest. Your receivers further show that said money can and properly should be paid into the registry of this court each month by the Magnolia Gas Company and that there is no further need for such receivership proceedings.
"Your receivers further show to the court that no costs have been paid in this proceeding and that the costs of court herein should be paid."
The court acted upon the application of the receivers, and duly entered the following order in the minutes:
"In the District Court of Harrison County, Texas. November Term, A.D. 1928.
"E. B. Whitworth v. Watters Oil Co. No. 6259.
"On this the 5th day of November A.D. 1928, came on to be heard and was regularly called, the application herein filed by Hobart Key and William F. Young, receivers appointed by this court, and after hearing said application, the court doth find that no further necessity exists for such receivership and that said receivers have on hand which they have collected, the sum of $1820,00 which said sum is tendered into court by said receivers, with their said application to be discharged. In said application said receivers further ask that they be allowed compensation for their services rendered as such receivers and that the court doth find that they are justly entitled to the sum of $300.00 for their said services.
"It is therefore ordered, adjudged and decreed by the court that said receivers having tendered into court the remaining balance of the money collected by them, be and they are hereby discharged and their report is in all things approved and the clerk of this court is ordered to receive and receipt for, said money less the sum of $300.00 which said $300.00 said receivers are ordered and directed to retain for their services as such receivers. The clerk of this court is further ordered to pay out of said remaining money, all costs accrued in this suit and to hold the remaining balance of said money in the registry of this court subject to the further order of this court."
The case of Whitworth v. Watters Oil Company, in which the receivers were appointed, had not been adjudicated at the date of the present appeal, but was still pending in the trial court undetermined. The question presented on appeal was that whether or not the funds sought to be garnished were subject to garnishment. All the claims and pending suits had been discharged at the time of the discharge of the receivers, except the original suit of E. B. Whitworth against the Watters Oil Company, which was pending and undetermined.
Barret Gibson, of Marshall, for appellant.
Scott, Casey Hall and Beard Abney, all of Marshall, for appellee.
The appellant contends that the funds in the hands of the district clerk, although placed in his custody by order of the court, were not exempt from garnishment because such funds were a surplus of money from the property of the Watters Oil Company and was its absolute property at the time of the service of the writ of garnishment. It is believed that the trial court did not err in discharging the garnishee in the facts of the case. The discharge of the receivers had the effect only to terminate their duties and authority. Their services, as shown in the application for discharge, were no longer necessary for the preservation and protection of the defendant's property. But in the discharge of the receivers there was not a surrender of jurisdiction by the court over the assets of the defendant Watters Oil Company collected by the receivers, for the court expressly directed the clerk "to receive and receipt for the money" and "to hold the remaining balance of said money in the registry of this court, subject to the further order of this court." By the terms of this order, then, the clerk was holding the funds by order of the court. It was within the power of the court to require the funds collected by the receivers to be held to be applied as the court may thereafter direct, for the suit of Whitworth against the Watters Oil Company in which the receiver was appointed was still pending and undetermined, although all other claims had been paid. 28 C.J. p. 72; Kreisle v. Campbell, Receiver, 89 Tex. 104, 33 S.W. 852; see Challenge Company v. Sartin (Tex.Civ.App.) 260 S.W. 313. The facts here do not bring the present proceedings within the case of Turner v. Gibson, 105 Tex. 488, 151 S.W. 793, 43 L.R.A. (N.S.) 571. The appellant's remedy was not by garnishment, but by proper application before the court to have his claim paid.
The judgment is affirmed.