Smith, Twogood & Co. v. Clarke & Henley

WRIGHT, C. J. In order to charge a garnishee, his liability must be shown affirmatively, either by his answer or evidence [245] aliunde. If the case stands alone upon his answer, it should contain a clear admission of a debt due to, or the possession of attachable property of the defendant, in order to make him liable. Though this admission should not be explicit, yet if from the entire answer it dearly appears that he is liable, judgment should go against him. His liability is never to be- presumed. He occupies the same position as if the defendant had sued him, and unless enough is shown to render him liable, he must be discharged. And under no circumstances is he to be placed in a worse condition than if said defendant was himself enforcing his claim. Drake on Attachments, sec’s 461-2, 659; Williams v. Housel, 2 Iowa, 154; Bebb v. Preston, 1 Iowa, 460. Applying these general rules, and others to which we may refer, we are clearly of the opinion that the court below erred in holding these garnishees liable. The judgment recites that the garnishees had not delivered to the sheriff, the property in their hands, as shown by their answer, and thereupon it was considered &c. The statute provides that after answer, the garnishee may exonerate himself from further responsibility, by paying to the sheriff the amount owing, or placing at his disposal the property, or so much thereof as equals the value of the property to be attached, and if found liable, judgment is to be rendered against him, unless he prefers paj-ing or delivering the property to the sheriff as aforesaid, Code, sec’s 1891, 1893#. In this case however, they were in no condition to' be required to make this election. The answer is to be taken as true, and from this it appears that they had a lien upon the property (we shall thus speak of these notes and bills for convenience,) in their hands, to secure the sum of at least three hundred dollars. It nowhere affirmatively appears that they had received any money upon these claims, nor even that said property was actually worth more than the amount owing to the garnishees. Under these circumstances they were not bound to place at the disposal of the sheriff, said property. They had’ a legal right to hold all of it, at least until their lien was [246] discharged. And having this right, it was erroneous to render an absolute judgment against them upon their failure to deliver the same to the sheriff. Drake, sec. 533. Nolen v. Crook, 5 Humph. 312; Grant v. Shaw, 16 Mass. 341; Scofield v. Sanders, 25 Vt. 181; Bank v. Levy, 1 McMullen 431; Curtis v. Norris, 8 Pick. 280. But supposing this lien satisfied, we are still of the opinion, upon other grounds, that the garnishees should have been discharged. We may mention one, and that is, that it does not sufficiently appear that they were indebted to the defendants, nor that they, at the time of the service of the garnishee notice, or afterwards, .had property of theirs in their possession or in their control. There is nothing indicating fraud, or a fraudulent intention on the part of defendant and the bank, or either of them, in the matter of the hypothecation. Briefly, the facts are that these garnishees, as attorneys, received from the defendants certain demands for collection, and were informed at the time that they were hypothecated, and the proceeds to be paid to the bank. Suits were instituted upon them, in most instances, as shown by the answer, in the name of the bank. This was long before they were summoned as garnishees, and afterwards and before answer they were advised by the bank of the transfer, and instructed as to the manner of forwarding proceeds. The letter giving this notice^ contained a list of the claims thus hypothe-cated, which agreed substantially with those left with the garnishees by the defendant. Now, apply one of the rules before stated; that the garnishee is to be placed in no worse condition than if the defendant was himself enforcing his claim, and will it be pretended that under this proof they could recover. Waiving the question of demand, without which the defendants could not maintain an action against their attorneys, but which is not necessary to charge them as garnishees of the client; let us ask, could the defendants maintain debt or indebitatis assumpsit for the demand here sought to be subjected? It [247] seems to its clearly not. It is a case where the debtor has notified the garnishee of the transfer of the property in his hands, and where the assignee has notice thereof and acts upon it, claiming the benefit of the same. The garnishee could not, safely, pay the money to the defendants, nor return to them the property; nor could the defendants, except by the consent of the assignee, maintain any action for the recovery of the - same. If the assignor has made an appropriation of the property and this has been accepted by the assignee, the particular part of the thing is immaterial, in order to make good the assignment. Thus, if A places funds in the hands of B for the purpose of paying certain drafts, and the holders of these drafts assents to the same, B will not be liable as the garnishee of A (Dwight v. Bank of Mich., 10 Metcalf 58.) So in Brooks v. Hildreth, 22 Ala. 469, where A received money from B to pay to C, and afterwards saw-C and informed him of the facts, but that he did not have it with him, and he assented and requested A to hold it for him, to which A assented and promised to do; held, that an attachment against B, served after this, would not hold the money in the hands of A, against C. And it has been held that an equitable assignment will secure the property against the attachment for the debt of the assignor, though no notice be given to the person holding the property, prior to the attachment, if given in time to enable the garnishee to bring it to the attention of the court before judgment. Wakefield v. Maston, 3 Mass. 558. And upon this subject see Drake, sec’s 525— 8, and Legoo v. Staples, 16 Maine, 252; Adams v. Robinson, 1 Pick. 461; Nezmoth v. Dunn, 8 W. & Serg. 9; U. S. v. Vaughn, 3 Binney 394. ■ Judgment reversed.