Fetterhoff v. Sheridan

Boyd, J., delivered the opinion of the Court. This is an appeal from an order of the Court below sustaining a demurrer and dismissing the bill of complaint filed by the appellant against the appellees. The bill alleges that John A. Sheridan as assignee of Henry H. Geist, obtained a judgment for $381.72 against the appellant on the 21st day of February, 1901, that Theodore Mottu & Company obtained judgment for $689.18 against Geist and issued an attachment thereon, which on the 14th of January, 1901, was laid in the hands of .the appellant to affect the funds claimed by Sheridan, it being claimed that the assignment from Geist to Sheri-day was fraudulent. The appellant then filed this bill tendering payment of the amount due by him into Court, asking that the parties be required to interplead and also that they be enjoined from prosecuting their actions at law. No objections have been urged before us as to the form of the bill, but it is contended that it does not present a case which calls upon a Court of equity to afford relief to the appellant. We do not see any occasion for such relief as is sought in this case. It cannot be contended that a judgment debtor in whose hands the funds so due by him have been attached can, as a rule, require the judgment creditor and the plaintiff in the attachment case to interplead, and there is nothing in the facts alleged in this bill which takes the case out of the general rule. It is true that the attachment of Theodore Mottu & Company was issued on a judgment against Geist, while the judgment against the appellant was in favor of Sheridan. But Sheridan’s claim against the appellant was under an assignment from Geist and the attaching creditors seek to subject it to the payment of their judgment on the ground that the *452 assignment was fraudulent. There can be no doubt that in this State the bona fides of the assignment of a debt can be inquired into under an attachment laid in the hands of a debtor, as garnishee. Among other cases so holding are Stockbridge v. Fahnestock, 87 Md. 136; Luckemeyer v. Seltz, 61 Md. 324, and Green v. Early, 39 Md. 223. When the attachment is so laid the garnishee can set up in his answer the fact of the alleged assignment to a third person and, if the garnishee is innocent of fraud or collusion, the Court should protect him as far as possible and not permit judgment of condemnation to be entered against him unless it is clearly shown that the assignment was fraudulent or invalid and care should be taken to avoid subjecting the garnishee to double liability. The garnishee must, however, act with reasonable diligence and when he is notified that the object of the garnishment is to reach the claim alleged to have been assigned, he should promptly inform the assignee and call upon him to protect the assignment. The assignee can then come into the case as claimant and assert his title, either by plea, under the old practice, or by petition under the statute, Kean v. Doerner, 62 Md. 475. If the assignee be notified by the garnishee of the attachment and fail to go into Court as claimant, or to defend in the name of the garnishee, after duly indemnifying him against costs, and if the garnishee bring the fact of the alleged assignment to the attention of the Court, but judgment of condemnation is nevertheless rendered against him, then the garnishee will be protected as against the assignee. It was held as early as the case of Ranahan v. O'Neale, Jr., 6 G. & J. 298, that where the real owner had knowledge of the attachment of his property as that of another party, but did not defend it and the sheriff afterwards sold it under a fieri facias issued on a judgment of condemnation duly rendered thereon, the sheriff was not liable to the owner. In Trieber v. Blocher, 10 Md. 14, it was said that, “ under our attachment system the owner of the goods attached, if he has knowledge of the attachment and the taking of his property, whether regularly summoned *453 or not, is compelled to come in and claim the property in order to prevent a judgment of condemnation, and if he fails to do so he has no remedy against the sheriff for selling it under a Ji.fa. upon a judgment of condemnation.” While those cases only involved the liability of officers of the law acting under process of courts of competent jurisdiction, they reflect upon the principle applicable to this case. Inasmuch as creditors are permitted to inquire into the validity of assignments by attachments which may be laid in the hands of the garnishees, protection should be afforded the garnishees in such cases and they should not be unnecessarily subjected to the risk of having to pay the same debt twice. When therefore the assignee is authorized to come into Court and defend his claim, as he is in this case, there would seem to be no good reason for holding the garnishee liable to him, if judgment of condemnation be rendered against the garnishee for the same debt—provided he had informed the Court of the assignment and had given notice to the assignee of the attachment. When the latter can be done, it should be, or if the circumstances be such that notice cannot be seasonably given to the assignee then the garnishee must, if he is aware of the assignment, inform the Court of it and be diligent in defending the rights of an absent assignee. A garnishee ought always, in justice to the defendant and the claimant of the property sought to be attached, if there be any known to him, as well as for his own protection,, give notice of the attachment to them. There may be some cases in which that is not necessary, but it is certainly the safer rule to adopt. In the case now before us judgment was obtained against the appellant by Sheridan as the assignee of Geist. Theodore Mottu & Company seek to subject the amount due by the appellant on that claim to the payment of the debt due to them by Geist and allege that the transfer to Sheridan was fraudulent. If that be true then Mottu & Company should not be deprived of their right to have the debt applied to their claim merely because it stands in the name of another party, nor should the appellant be required to pay it twice, but he has ample means *454 of protecting himself at law. He can set up the facts in the garnishee case and he can give notice to Sheridan to defend his claim. If he refuses to do so and judgment of condemnation is obtained against the.appellant without his fault, he can be protected. Sheridan cannot with impunity stay out of the case and then say he was not a party to the proceedings and therefore was not bound by it. As we have seen, the law gives him the right to come into the attachment case and claim the credits attached and if he refuses to do so it will be at his peril. Our statutes make no special provision for a garnishee summoning a claimant in Court to defend, but, as he has the right to come in, if he has notice of the attachment it is his duty to take the burden himself and not unnecessarily subject the garnishee to it. If he refuses to do so he will be concluded by the result. While this precise question, as between a claimant and a garnishee, may not have been determined in this State, the principle applicable to it has been in a number of cases. In McKinzie v. B. & O. R. R. Co., 28 Md. 161, which was an action of replevin, it was said: “ A judgment to operate as an estoppel, must be upon the same subject-matter and between the same parties. The term ‘parties,’ however, is not restricted to those who appear as plaintiff and defendant upon the record. It includes those who are directly interested in the subject-matter of the suit, knew of its pendency and had the right to control and direct, or defend it.” Or, as was said in Albert v. Hamilton, 76 Md. 304, “ persons who are directly interested in the suit and have knowledge of its pendency, and who refuse or neglect to appear and avail themselves of their rights, are concluded by the proceedings as effectually as if they were parties named on the record.” See also State v. Greenwell, 4 G. & J. 415; Parr v. State, 71 Md. 220; Riley v. Bank, 81 Md. 14. C Sec. 17 of Art. 9 of the Code authorizes the attachment of debts due the defendant upon judgments or decrees and provides “but an execution may, on application, of any party to the Court rendering such judgment or decree, be issued for enforcing the payment thereof, notwithstanding the . attach *455 ment; provided the money payable on such judgment or decree be, in the said writ of execution, required to be brought into the said Court, to be by such Court preserved or deposited, or invested in stocks, to abide the event of the proceedings in such attachment.” Although this judgment is in favor of Sheridan, the attaching creditors claim it belongs to Geist. All parties can be fully protected under this section, and they can agree that the money be paid into Court without an execution being issued. If Sheridan refuses to agree to that, and issues execution, he ought to be made to pay the costs thereof, if the appellant is ready to pay the money into Court without having an execution issued. If he proceeds to issue an execution regardless of this statute, then he should be enjoined, if the appellant informs the Court in which the attachment is pending of the facts, as Sheridan now undoubtedly has notice of it. (Decided January 16th, 1902.) So without considering other grounds that might be mentioned, we think there was no reason for the interference of a Court of equity and the decree dismissing the bill will be affirmed. Decree affirmed, appellant to pay the costs.