Kling v. Tunstall

HEAD, J. The appellee, Tunstall, sold property to David M. Paxton and John C. Williams, Sr., and, they being indebted to him on account thereof, he instituted suit against them by attachment, and caused appellant, Kling, to be summoned as garnishee. Complaint was regularly filed, and judgment obtained against the defendants. Judgment was rendered against the garnishee, upon contest of his answer of not indebted, &c., and from that judgment he prosecutes this appeal. The garnishee, Kling, had loaned the defendants $3,500, the payment of which they had secured by Buortgage on certain mill property. -On the 24th day of August, 1893, he foreclosed the mortgage, and purchased. himself, at the price of $4,150. There was then due him on the mortgage debt $3,500, with interest from February 7th, 1893, making $3,653.07. This left a balance of purchase money of $496.93, a part of which the garnishee testified he applied as follows : $56 for watchmen to take care of the mill property pending the sale ; $6.50 for advertising the sale : and $100 for attorney's fees for advice and services in relation to the foreclosure of the mortgage, aggregating $162.50 — leaving a balance of $334.43. Prior and to the time of the execution of this mortgage, there had been a partnership carrying on the milling business, composed of the defendant Paxson, and John C. Williams, Jr., and Henry Hall, and the garnishee held claims, on open account, against that firm. At the time the mortgage was given, a; new partnership was formed to carry on the same business, composed, according to some of the evidence, of the members of the old firm and the defendant Jno. C. Williams, Sr., and, according to other evidence, of the de [611] fendants, Paxson and John G. Williams, Sr., and John'G Williams, Jr. This new firm,it is also claimed,became indebted to the garnishee on open account The testimony establishes,without conflict, that the two firms were so indebted to him, but questions are raised as to the amounts. The garnishee testified that, pending the foreclosure of the mortgage, both defendants (mortgagors) assumed these debts, and authorized him to bid, at the sale, a sum sufficient to satisfy the mortgage and the debts so assumed. . Paxson testified that he and Jno. C. Williams, Sr., and Jr., who, he says were the members of the new firm, all assumed to pay garnishee the indebtedness of the old firm, and that he, witness, authorized garnishee to apply any surplus over and above what was due on the mortgage, as far as necessary, to the payments of the amount due him by both the old and new firm.1 He testified that the amount due by the old firm was about $300. John G. Williams, Sr., and Jr., testified that they never assumed or agreed to pay said indebtedness of the old firm. These matters all occurred prior to the service of the garnishment. The bill of exceptions recites that the mortgage debt, and the expenses of $162.50 above referred to, were not controverted by the- plaintiff. John C. Williams, Sr., testified (and it was not disputed) that the new firm owed the debt which was secured by the mortgage, and owned the property conveyed by the mortgage. If this be true, the garnishee was entitled to set off against the unsecured indebtedness of the new firm so much of the surplus purchase money as was equal to it; but, in order to obtain the benefit of this principle, the set-off should have been specially pleaded in answer to the issue tendered the plaintiff, unless waived. As the judgment must be reversed upon other points, whereby the plea may hereafter be interposed, if desired, we will not consider whether it was waived by the course the trial took. As we have seen, there was evidence tending to show that all the members of the new firm assumed the indebtedness of the old firm to the garnishee. The evidence is indefinite on this point. It does not appear when, nor upon what consideration, the assumption was made. Unless it was a part of the new firm’s contract of partnership, or, if made afterwards, did not rest upon [612] a new valuable consideration' moving from the old firm, to the new, the assumption was of no binding force.. Again, a direct promise to the garnishee to pay. the old-firm’s debt, if such was the form of the assumption, in order to bind, must have been supported by a valuable-consideration, and been manifested by writing, subscribed by the promissors, expressing the consideration. The evidence of the assumption, by reason of these iii- ' definite features, was not sufficient to submit the question to the jury. If the garnishee and all the members of the new firm (assuming that the new firm were the real owners of the property) had, pending the foreclosure, entered into an agreement by which the garnishee should bid enough, for the property to pay the mortgage debt and expenses, and these open accounts, or either of them, and retain for the same, and the garnishee, accordingly, made the. purchase, the agreement would have been valid, and authorized the retainer ; but there was no evidence that: John C, Williams, Jr., entered into such an agreement., It was not one within the scope of the partnership, and: nothing less thaii the assent of all the members to it could bind the partnership. This rule would not apply, if the mortgaged property had belonged alone to the: mortgagors, Paxson and John C. Williams, Sr., and not. to the new firm. In that case such an agreement between the garnishee and them only would have author-, ized the retainer. We do not consider how far a want of notice on the part of the garnishee that the mortgagors were not the only owners of the mortgaged property would have affected the agreement. The facts are not sufficient to raise the question. The garnishee, in the effort to prove his open accounts, against the two firms, testified that they together, in-, eluding some- interest, amounted to $366.93. He did, not testify to the amount of either separately. Original entries of the items of the accounts, made in part by the garnishee, and in part by his clerk, could not, under any facts appearing in this case, be received as evidence, of the correctness of the accounts. If the witness had-', personal knowledge and. recollection o'f the correctness', of the items, or any of them, he could of course testify to them ; or if he had no independent recollection of them, but could testify that he-knew those which he. [613] made himself were correct, at the time he made them, then such entries, made by him, would be received in aid of his testimony. Upon the hypothesis that the other evidence in the case justified the garnishee in making proof of the accounts, there is no good reason why they should not have been submitted to the witness Paxson, one of the debtors, for his testimony thereon of their correctnesses was proposed to be done by the garnishee. The evidence showed that the chain for which judgment was also rendered against the garnishee belonged to the partnership and not to the defendants in attachment. If such was its ownership, it was not subject to this process. Again, the judgment in regard to the chain was plainly erroneous, had its ownership been otherwise. Section 2978 of the Code, which governs such cases, plainly prescribes the judgment to be rendered, and the after pi-oceedings thereon, the observance of which is simple and easy. The garnishee, because he happens to have property of another in his possession, cannot be forced to become its involuntary purchaser by a process of garnishment served upon him. That result can only follow his disobedience of the proper judgment of the court ordering the delivery up of the property, on demand, as provided by the above section. It is evident the cause was tried and disposed of upon incorrect principles. We, therefore, subserve the ends of justice by reversing the judgment and remanding the cause for another trial, for any substantial error found in the record, though it be such as might be corrected in this court. — Code, § 3658. What we have said will furnish a sufficient guide to the Circuit Court on another trial. Reversed and remanded.