Riggin v. Hillard

Cockrill, C. J., after stating the facts- as above set out. It is conceded that the court house is exempt from the operation of the statute governing mechanic’s liens, and that the statute does not create any claim or lien in appellant’s favor upon the fund which the county has set apart to pay for the repairs. i- no subrog-ation In Jj1'oi strau' The contention is that the appellant shows a right *A _ ° to equitable subrogation • to the right of Hilliard to proceed against the county for the collection of an amount, equal to his claim against Hilliard.- But the relation of the parties to each other is not such as to invoke the application of that doctrine. The appellant, according to his allegations, has sold to the appellee, upon his personal credit alone, materials, to be used in repairing a court-house. In the absence of a statute giving him a lien, he is. in no better condition than if he had loaned the contractor money to carry out his contract with the county in making the repairs ; but it is settled that the loan of money to a debtor to discharge his obligation does not entitle the lender to .be subrogated to securities which the creditor held for the enforcement of the obligation. Rodman v. Sanders, 44 Ark. 504 ; Kline v. Ragland, 47 id. 118 ; Steamboat White v. Levy, 10 id. 411 ; Sheldon on Subrogation, sec. 243. If there had been an agreement between the parties that the plaintiff should receive pay for his materials, from the county out of the fund due Hilliard, the contractor, for repairs, or if the agreement could be implied from the conduct of the parties, the plaintiff would be entitled to subrogation by reason of his contract; but that would be conventional subrogation, which is more nearly akin to assignment than to subrogation by operation of law. There is no allegation in the complaint that there was an agreement between the appellant and Hilliard for subrogation. ' No foundation is laid therefore for conventional subrogation. The claim of one whose materials are used in the construction or repair of a building is more meritorious than that of the contractor who has used the materials in the construction and refuses to pay for them. Such claims have preference in general by statute. It would doubtless work an equitable result if the legislature would make claims for materials and labor furnished in the erection or repair of public buildings a lien upon the fund to be paid therefor, superior to the claim of the contractor. Laborers and material-men could then divert the course of the payments, which would otherwise go to the contractors, into their own hands, by virtue of the statutory subrogation. But where there is no legislation and no contract to affect the status of the the parties, the simple relation of debtor and creditor exists between the material-man and contractor, and the former can resort only to the remedies common to such creditors for the collection of their debts. " The question, then, is, does the plaintiff, a simple contract creditor, state facts entitling him to equitable relief against his debtor? The county is not sued. It is' conceded that the statute does not authorize suit in the circuit court against a county, and that it could not be made a party to this suit. The complaint alleges that the materials were furnished to Hilliard, through his agent, upon Hilliard’s express promise to pay for them, and that the account is due and unpaid. That was a statement of a cause of action for a personal judgment against Hilliard. It alleges also that Hilliard is insolvent, that the county is indebted to him, and, in effect, that unless he gets his pay out of the amount due by the county, nothing can be collected. A court of law could not reach the debt due by the county, because a county is not subject to garnishment. Boone County v. Keck, 31 Ark. 387. 2. Practice larniXñemí It is the peculiar province of equity to reach interests of a debtor, which cannot be seized under legal process, when its aid is invoked by a judgment creditor who has exhausted his legal remedies without effect. But the act of March 31, 1887, dispenses with the necessity of a previous judgment as a condition to obtaining equitable relief under a creditor’s bill. It provides that “in suits to set aside fraudulent conveyances, and to obtain equitable garnishments, it shall not be necessary for the plaintiff to obtain judgment at law in order to prove insolvency, but in such cases insolvency may be proved by any competent testimony, so that only one suit shall be necessary in order to obtain the proper relief.” Acts 1887, p. 193. The object of the act was to dispense with the useless delay and expense incident to obtaining a judgment which it is known in advance will prove fruitless. Courts of equity had airead}*- begun to relax the rule requiring a judgment and execution and return of nulla bona to show that the legal remedy was inadequate. The statute runs in that line; it is remedial, and should receive a liberal construction to effect the object designed by it. E}vefy equitable proceeding wherein a remedy is devised to apply the debt of a third person to the extinguishment of the plaintiff’s demand against his debtor is a suit for an equitable garnishment. That is the object of the plaintiff’s suit; and as the complaint alleges that the debtor is insolvent, and that no relief could be obtained at law, the statute dispenses with the necessity of a previous judgment. Taking- the allegations of the complaint as true, the plaintiff has laid the foundation for a creditor’s suit, and the question is, can the debt due by the county to the plaintiff’s debtor be subjected to the payment of his demand ? 3 claim subject tounty The case of Boone County v. Keck, 31 Ark. sup., holds that public policy forbids that counties should be to the process of garnishment, unless the legislature certainly evinces the intention to grant the use of the process against them. It is there ruled, as we have seen, that our statute does not extend the remedy against counties. The reasons of policy ordinarily assigned for withholding garnishment process against counties and other municipal corporations are, ‘ ‘ the inconvenience and impolicy of interfering with the operations of municipal bodies, by drawing them into controversies with which they have no concern, and diverting the public moneys from the channel in which * * * they are required to flow.” Drake on Att. sec. 516. The argument as to the impolicy of drawing the county into a litigation with which it has no concern has no application in this case, because there is no litigation against the county. It is not made a party to the suit. But the objection to diverting the public funds from the channel to which they have been turned by public authority exists when the cause arises in equity just as it does at law. But the remedies of equity are not fixed and unbending, like the legal process of garnishment; and if the court can ascertain that no inconvenience can result to the public by its interference with the corporation’s right to pay the debt directly to its debtor, there is nothing to prevent the court from doing so. In Minnesota, as in this State, a municipal corporation cannot be reached by the process of garnishment, but it is there held that, in a suit like this, a defendant who is the county’s creditor may be compelled to assign his demand against the county to a receiver to be collected and applied to the satisfaction of the plaintiff’s demand, where no reason of policy intervenes. Knight v. Nash, 22 Minn. 452. The Supreme Court of Georgia intimate, but do not decide, that they would approve the practice, under like circumstances. Dotterer v. Bowe, 84 Ga. 769. A similar, though not identical, practice was approved by the Supreme Court of the United States in the case of Smith v. Bourbon County, 127 U. S. 105. In Missouri, the statute expressly prohibited the use of the writ of garnishment against a municipal corporation, but the Supreme Court of the State held that it did not protect the debt against a creditor’s suit in equity'to apply it to the payment of his demand. Pendleton v. Perkins, 49 Mo. 565. The same conclusion was reached in Speed v. Brown, 10 B. Monroe, 108. In the case of the Bank of Tennessee v. Dibrell, 3 Sneed, 379, a creditor’s bill-seeking to subject the salary of a" State official to the payment of his debts was disallowed. But the case is in harmony with the principle underlying those already cited. The reason given by the court for the decision is that “the functions of government might be suspended ” by the loss of efficient servants if the State were not permitted to pay salaries directly to her officers. See McMeekin v. State, 9 Ark. 553 ; Roeller v. Ames, 33 Minn. 132 ; 28 Am. Law Reg. p. 285. The remedy is allowed in no case where it is adjudged that the public will be injuriously affected. It follows that relief should be granted to the plaintiff unless public policy intervenes in some way. The complaint alleges that the debt is due upon a. contract to repair a court-house. The courts commonly concur in holding that public policy forbids any interference between the county and its contractor under such circumstances if the work is still in progress, for the interference would tend to retard the occupancy of the building'. But here the complaint alleges that the work has been completed. There is no longer any public interest to be subserved by withholding payment from the contractor, and no reason for withholding the debt from the reach of the remedy in this sort of proceeding. Judge Dillon goes further, and expresses the opinion that in such a case the ordinary process of garnishment should be allowed against a municipal corporation. 1 Dillon’s Municip. Corp. sec. 101 ; City of Laredo v. Nalle, 65 Tex. 359. But the case of Boone County v. Keck, 31 Ark. sup., is opposed to the view that the legal procesa of garnishment can be used against a county in any case. For the same reason, it was held in that case that a county could not be made to respond to a creditor’s suit supplementary to execution. Nothing else was involved or determined in the case. It was a suit directly against the county; the plaintiff’s judgment debtor was not a party to it, and the only relief asked was against the county. In the case at bar the plaintiff’s debtor is the party against whom relief is sought, and the county is not sued. Therein lies the cardinal difference between the cases. The complaint states a cause of action against Hilliard, and shows a right in the plaintiff to subject the debt due by the county to the satisfaction of his demand. That can be accomplished under proper orders of the court — as by a sale or compulsory assignment of the debt for the purpose of applying the proceeds to the satisfaction of any judgment which the the plaintiff is entitled to recover. The demurrer ought therefore to have been overruled. The judgment will be reversed, and the cause remanded with directions to overrule the demurrer. It is so ordered.