Reeve v. Smith

Mr. Justice Scott delivered the opinion of the Court: There is no controversy as to the facts of this'case. On the 16tli day of October, 1882, Berthold & Jennings commenced a suit by attachment, in the City Court of East St. Louis, against the Clinton Bridge Company, a non-resident corporation, and summoned the Chicago and Alton Railroad Company as garnishee. Afterwards, on the 4th day of December, 1882, the firm of W. H. Smith & Co. also commenced a suit in attachment in the same court, against the bridge company, and had process served on the Chicago and Alton Railroad Company, as garnishee, as -was' done in the first suit commenced. Both suits proceeded to judgment against the attachment debtor at the January term, 1SS3, of the City Court of East St. Louis. Intervening the two attachment suits,— that is, on the 1st day of December, 1882,—the Clinton Bridge Company, .in good faith, and in part payment of its indebtedness to the firm of Reeve & Son, assigned to them its claim against the Chicago and-Alton Railroad Company, (being the same indebtedness now involved,) and on the same day notified the railroad company of such assignment. Of the good faith of the assignment to the interpleading creditors, and that it was made to secure a bona fide indebtedness, no question is made. It does not appear there is enough of the fund in the hands of the garnishee to satisfy and discharge in full the demands of the respective claimants, and the only question made is, whether the second attachment creditors, whose suit was commenced after the assignment of the attached fund to the interpleading creditors, are entitled to a pro rata share of the attached fund with the first attachment creditors, or whether the balance, after paying the first attachment creditors, as is conceded must be done, shall go to the interpleading creditors. By the decision of the City Court, which was after-wards affirmed in the Appellate Court, the fund in the hands of the garnishee was ratably divided between the attachment creditors whose judgments against the common debtor were rendered at the same term of court, and as there was not enough of the fund to discharge in full their respective claims, the interpleading creditors were refused any share of the attached fund. That decision, it is thought, is warranted by a fair construction of the 37th section of the Attachment act,—Rev. Stat. 1874, p. 152. In that section it is provided: “All judgments in attachments against the same defendant, returnable at the same term, and all judgments in suits by summons, capias or attachment against such defendant,'recovered • at that term or at the term when the judgment in the first attachment upon which judgment shall be recovered is rendered, shall share pro rata,, according to the amount of the several judgments, in the proceeds of the property attached, either in the hands of a garnishee, or otherwise. ” It will be perceived that property attached, and funds in the hands of a garnishee, are placed on the same footing,—that is, when attached, such property'or funds are appropriated from that time, by law, to the payment of a certain class of creditors. Who constitute the class of creditors whose rights are protected by law? They are specifically enumerated in section 37, and consist of the creditors of the attachment debtor who shall obtain judgments against such debtor within the time and in the manner specified in that section of the statute. It is the whole property or funds attached, and not any specific part or portion, that is held, until it shall be ascertained who or what creditors are entitled to share in the distribution to be made. Creditors who do not choose to put their claims in judgment, by attachment or otherwise, within the time limited by the statute, are not permitted to share in the proceeds of the property or funds attached,—certainly not until all attachment or judgment creditors have been paid. Keeping this construction of the statute in mind, the case being considered presents no difficulty. The interpleading creditors never attempted to put their claim against the attachment debtor in judgment, and hence their equities, under the assignment to them of the funds attached, must be held to be postponed to the rights of creditors who have conformed to the statute, and put their claims in judgment. Had they put their claim in judgment with the attachment creditors at the same term of court, as was their privilege to do, they would have been permitted to share pro rata with them in the funds attached. Failing to do s'o, they are cut off from any participation in such fund until after attachment or judgment creditors are first paid. The statute that secures equality among the creditors of the common debtor, is a wise and just one. Creditors of the attachment debtor ought not to be permitted to obtain-an inequitable advantage over other creditors in a fund appropriated by law for a specific purpose, by taking an assignment of it before the time shall have arrived for distribution. That would contravene the positive provisions of the statute, which will not be sanctioned. It is familiar law that a chose in action is not assignable either at common law or under the statute of this State, so as to vest the legal title in the assignee. Such assignee will take the same subject to all defences that existed against the assignor. In this case the interpleading creditors stand in the shoes of the bridge company, and can, of course, assert no rights in or to the funds attached other than the bridge company itself could do. The statute has fixed the mode by which the creditors of the attachment debtor may share in the ju’oceeds of the property levied upon or in the funds garnisheed, and parties will not be permitted to defeat its provisions in that respect by taking to themselves an assignment of such property or funds, or by any other method that might he adopted. Its provisions in that regard will be recognized as controlling. The judgment of the Appellate Court will be affirmed. Judgment affirmed.