Fox v. Reed

The opinion of the court was delivered, by Lowrie, O. J. There is no real difference between this case and that of Reed v. Penrose, 2 Grant, 485. The plaintiffs’ demurrer to the garnishee’s answers is not an improper form of setting the case down for hearing on the answers. It has no other purpose or effect. Then as to the garnishee’s pleas. That of nulla bona is rgood for nothing when the plaintiff sets the case down for hearing on the answers. That the defendant had not been notified of the attachment can never be an issue to the jury, and the want of notice or service is cured by actual appearance. The third, that the garnishee holds bonds of the defendant to the amount of $300,000, due 1st January, 1850, and that he has a right to set off so many of these as will cover [98] the money in his hands, is really no plea of set-off, for in order to be so it ought to be as special as a declaration in debt on the bonds, and should specify the very bonds on which a recovery is claimed by way of set-off. It specifies none of the three hundred or three thousand bonds which he claims to hold, and a judgment in his favor on such a plea would extinguish either all or none of the bonds. The plea is bad on general demurrer. And the garnishee loses nothing by this, for-he sets up the same defence in better form in his answers. The whole case, therefore, depends upon the garnishee’s answers, and as they admit funds in hand sufficient to pay the plaintiff, the only question is, are these funds liable, and in Reed v. Penrose we have decided that they are. A majority of us are of opinion that the defendant, the canal company, cannot claim that its funds are exempt from the process of its creditors, because it needs them for the repair of its works, or has by resolution set them apart for that purpose. If resolutions could be so effective, no doubt they would always keep enough of them on hand. A majority of us are further of opinion that the garnishee in this casé has no legal right to set off the bonds, or any of them held by him, so as to satisfy or discharge the debt owed by him as depositary of the funds of the company, and that therefore he cannot set them up against any creditor of tbe company. It would be a breach of the confidence reposed in him as depositary, as president, and as co-corporator for him to take such an advantage of his position, and the law does not allow it. Moreover so far as this and the former point are set up for the benefit of the company, the garnishee sets them up improperly, for they do not interest him as garnishee, and the company has withdrawn all defence with its appearance. Judgment reversed, and judgment for the plaintiffs against the garnishee for the sum of twenty thousand four hundred and seventy-eight dollars and seventeen cents and interest from this date, and all costs, and on the payment thereof the said garnishee shall be discharged from so much of his indebtedness to the defendant, the Erie Canal Company, on account of their moneys deposited with him, and record remitted for execution. Woodward, J. Eor the reasons I gave in Reed v. Penrose, I do not regard the corporate funds as attachable at the suit of creditors, but concur in the present ruling of the point as res adjudícala. Strong, J., dissents. Thompson J., having at one time been of counsel, took no part in the case.