Supreme Sitting Order of the Iron Hall v. Grigsby

Mr. Justice Craig delivered the opinion of the court: 1From the facts appearing in the record it is clear that the Supreme Sitting Order of the Iron Hall falls within what was determined an insurance company in Rockhold v. Canton Masonic Benevolent Society, 129 Ill. 440. The company was organized in the State of Indiana under the laws of that State, and never having complied with the laws of this State authorizing it to do business here it could not lawfully transact business in this State. Indeed, it is not claimed that the company had authority to do business in this State, as is shown by a provision in the stipulation of facts upon which the case was tried, as follows: “That the said corporation is not authorized, under the provisions of the laws of the State of Illinois, to transact the business for which the same was organized, in the State of Illinois, and has never been so authorized; that at the time said sum of money came to the hands of the garnishee he did not know that said corporation had not complied with the statute of this State and was not authorized to transact business herein, but, on the contrary, presumed that all proper steps had been taken by said corporation to permit it to legally transact business in this State.” As has been seen, the appellee, the plaintiff, Henry G. Sumpter, and several other persons, residents of McDonough county, formed themselves into what was called Local Branch No. 208, and appellee was selected as its cashier. In his capacity as cashier there came into his hands from his associates in the local branch §681.94,— the money involved in this proceeding,—and the first question to be determined is whether this fund belonged to the Indiana corporation, and had that company the right to collect it from appellee, who had received it from his associates. The right of the Indiana corporation to collect the money rests upon its right to transact business in this State, and as it had no such power it could not collect the money. The Indiana corporation had no control or supervision over the local branch, so called, or any of its members, and was not entitled to any fund which was raised or paid over as dues or assessments by the persons who were members of the local branch. Whatever money was raised by the local branch and paid into the hands of appellee belonged to the members of the branch as individuals. If, then, the fund in question did not belong to the Indiana corporation, upon what ground can it be claimed or recovered by Sumpter, a garnisheeing creditor of that corporation? The law is well settled in this State that in garnishment proceedings the creditor can only recover such indebtedness as can be recovered in an appropriate action in the name of the attachment or judgment debtor against the garnishee. (Webster v. Steele, 75 Ill. 544; Richardson v. Lester, 83 id. 55; Capes v. Burgess, 135 id. 61; Drake on Attachment, sec. 485, 541, 547.) Here, as we have seen, no right of recovery existed in favor of the Indiana corporation, the judgment debtor, and under the rule laid down in the authorities cited, no' recovery could be had by Sumpter, the creditor of the corporation. It is, however, suggested in the argument that there is no rule of law which will prevent appellant from recovering in this case unless it is the policy of our courts to punish foreign corporations that have not complied with our laws, and that it would be contrary to the spirit of our laws to inflict upon a citizen of this State the penalty belonging to a foreign corporation. It will be remembered that appellee and all the other members of the local branch who contributed to the fund appellant is attempting to recover are residents of this State, and they are entitled to the same protection which should be extended to appellant. But aside from this consideration, the question of inflicting punishment upon a foreign corporation for transacting business here without complying with our laws does not enter into the decision of this case. In a garnishment proceeding like the one in question the garnisheeing creditor can only recover of the person garnisheed when the debtor in whose name the suit is instituted can recover. This rule of law is general in its application, applying to all cases, and it makes no difference whether the party in whose name the suit is brought is a corporation or a natural person, —a resident or a non-resident. After a careful consideration of the record and the questions raised and discussed in the argument we are satisfied the judgment of the Appellate Court is correct, and it will be affirmed. Judgment affirmed.