Harrison & Calhoon v. South Carthage Mining Co.

ELLISON, J. Plaintiffs obtained a .judgment against defendant before a justice of the peace and had an execution issued thereon. The officer garnished the present garnishee who denied owing defendant. On ap [36] peal to the circuit court judgment was rendered against the garnishee. Defendant gave a chattel mortgage to one Mrs. Pitch, the garnishee’s daughter, he transacting the business for her. Both of them neglected to record it for near three months. She assigned it and the note it secured, to the garnishee, and he then on the same day filed it for record. Afterwards, he toolc possession of the property, foreclosed the mortgage and bought in the property. It is this property which plaintiffs seek to reach by the garnishment, they claiming the mortgage to be invalid as to them, on account of not having been recorded. The case was here on a former appeal (95 Mo. App. 80) when we held that where a mortgagee neglects to record his chattel mortgage for a period of time and a creditor extends credit to the mortgagor between the time it is executed and the time it is recorded, it is void as to such creditor, when he attacks it by proper process or proceedings. The garnishee now sets up, and the court found it to be a fact, that while a part of plaintiff’s claim against defendant upon which .they obtained judgment accrued during the time the mortgage was by neglect kept off the record, yet a substantial part thereof accrued before the execution of the mortgage. The law is that a chattel mortgage kept- off the record (though -by mere neglect) is invalid as to debts contracted while it is off. But, in this State (though not so in some other jurisdictions) it is valid as to debts contracted before it was made, if recorded before seizure. We so decided on the former appeal. 95 Mo. App. 80. It thus appears that plaintiffs’ judgment, upon which the garnishment is based, is made up in part of a valid claim against the mortgaged property in the garnishee’s possession, and in part of an invalid claim. How does the law affect such state of facts'? In our opinion, it exempts the mortgaged property from the whole of plaintiffs’ judgment. It would cer [37] tainly be most nnjnst to permit a creditor with two claims, one valid and the other invalid as against another creditor, to recover both by the mere act of putting them into one judgment against the debtor. When he does it, the invalid claim, in law, makes the whole judgment unenforcible as against the other creditor. In instances where a conveyance of property is invalid as to existing creditors, but is valid as to subsequent creditors (such as mere voluntary conveyances) it has been frequently determined that a judgment creditor, where the sum in judgment is made up of both existing and subsequent claims, must be considered a subsequent creditor and the conveyance valid as to the judgment. Reed v. Woodman, 4 Maine 400. “If a creditor, having demands accruing partly before, and partly after a conveyance by his debtor, which he would impeach, on the ground of fraud, blends them in one suit, and, having recovered judgment, extends his execution on the land; he can come in only in the character of a subsequent creditor.” Quimby v. Dill, 40 Maine 528. The same rule of law is stated in Miller v. Miller, 23 Maine 32 and in Usher v. Hazeltine, 5 Greenleaf 471, as well as in Baker v. Gilman, 52 Barb. 26. In the Miller case, it was decided to be the right df the grantee in the conveyance attacked by the judgment creditor, to examine into the account upon which the judgment was founded so as to see whether he had a right to question it. And so, too, it seems quite well established, and this court has so decided, that where an attachment, on the ground that the debt sued for was fraudulently contracted on the part of the debtor, is made on claims, part of which were fraudulently contracted and part not, the whole attachment fails. Bank v. Cramer, 78 Mo. App. 476; Estlow v. Hanna, 75 Mich. 219; Mayer v. Zingree, 18 Neb. 458; Mayer v. Evans, 27 Neb. 367; Stiff v. Fisher, 85 Tex. 556. And so we recognized the rule in [38] Mackey v. Hyatt, 42 Mo. App. 443, though we did not consider that case as within the reason of it. It appears that plaintiffs filed before the justice of the peace a denial of the garnishee’s answer and that after the cause reached the circuit court on appeal, the garnishee filed what is termed a ‘ ‘ reply to denial of answer,” to the interrogatories, in which is set up a defense not made before the justice. Plaintiffs claim that this was improper and not allowable on the ground that the statute provides that the same action and no other shall be tried on appeal that was tried before the justice. And that it violated all the rules of procedure, as to proceeding in garnishment. Without saying anything as to the merits, of these contentions, it is enough to refer to the fact that, so far as the abstract of record shows, there was no objection or exception made to this and in consequence we can not notice it. But plaintiffs, perhaps, anticipating what we have just said, take the position that the point goes to the jurisdiction of the court. In this we have no doubt they are in error. We can see no possible reason preventing the circuit court from having jurisdiction of the case as it stood with the garnishee’s reply. The whole record discloses that the judgment was for the wrong parties and it is accordingly reversed. All concur.