Fredrick v. Chicago Bearing Metal Co.

McAvoy, J. The question here is whether an attachment may be levied on defendant’s interest or right to receive profits under a contract which provides: “As additional consideration for the sale of said properties the Magnus Company agrees to pay to the Chicago Company a further sum measured by 20% — 1 /5th — of the profits as herein defined, earned by the Magnus Company and all of its subsidiaries, as now or hereafter constituted, for a period of seven years from the date of the conveyance and delivery of the properties and assets sold hereunder.” Defendant, however, was not to be charged with any loss in any year by deduction from subsequent profits in later years. It cannot be denied that no property or debt due defendant exists under this clause which is the subject of levy under the precise wording of the attachment statute (Civ. Prac. Act, §§ 912-922), but there are rulings that an immediately payable debt is not necessary for the right of levy of the attachment creditor to accrue. It may run against an inchoate chose in action. In Warner v. Fourth National Bank (115 N. Y. 251) it is said that the right of a pledgor to compel the pledgee to account to it as to the pledge before the debt was paid was “ within the spirit of the language of the Code.” This, however, is a specific case which the former Code and the new Civil Practice Act recognize as a salable right under execution. (Civ. Prac. Act, § 688; Code Civ. Proc. § 1412.) The sections governing attachment and those providing for execution must be correlative. Many cases indicate that the term “ cause of action ” is not to be construed narrowly, but as though it were written “ chose in action ” which may ripen into a cause if the right provided for arise. Here there is a corporate company garnishee with assets of $7,500,000, and a right in defendant to one-fifth of its annual profits, if any, for seven years. But notwithstanding its putative value, it is merely a contingency which may never eventuate into a right. It is a possibility of profit but nothing may ever be payable under it. If the liability is contingent, no attaching right exists. Here there is no liability presently fixed to pay anything except upon the accident of profits accruing. Where property sought to be attached is incapable of manual delivery, the law as to levying [590] is strict. We are ruled by a statute with specific items enumerated therein. Mr. Drake in his work on Attachments (7th ed. § 544) in speaking of garnishment said: “ That which the garnishment operates upon . in this class of cases is credits. The term credit, in this connection, is used in the sense in which it is understood in commercial law, as the correlative of debt. Wherever, therefore, there is a credit, in this sense, there is a debt, and without a debt there can be no credit.” There can then be no attachment of or levy upon a contingent right which may or may not become a cause of action according to the occurrence or non-occurrence of a future event. The attachment falling, the order of publication falls with it. The order should be reversed, with ten dollars costs and disbursements, and the motion to vacate order of service by publiqation and warrant of attachment granted, with ten dollars costs. Dowling, P. J., Merrell and Martin, JJ., concur; Finch, J., dissents.