A. J. Case & Co. v. Illinois Central Railroad

Salinger, J. I. It appears that plaintiff advanced money to one Cox, wherewith to do work for defendant, and that pay for this work was payable at plaintiff’s place of business, possibly payable to the order of plaintiff. But plaintiff does not rely on this, but sues on its assignment from Cox — and the case before us is this: The defendant railroad company was, at one time, indebted to Cox. Cox made assignment to plaintiff, of which assignment the railroad company was notified. The defendant is suable in Illinois, and an alleged creditor of Cox’s garnished it in Illinois. It notified Case & Company, in effect, that such garnishment proceedings were pending, and that it intervene and defend its rights to the fund held by the railroad company for someone. Case & Company did not appear. The justice of the peace in whose court in Illinois said garnishment was pending, adjudged that the garnishment plaintiff, was entitled to be satisfied out of said fund. Later, Case & Company sued the defendant upon its assignment of said debt once owing Cox. The defendant pleaded the Illinois garnishment proceedings in bar. A demurrer to this plea was sustained, and the defendant now urges such ruling to be erroneous. The arguments before us present, on part of the appellee, the contention that, since Case & Company were not made parties to the Illinois garnishment, 'were not served with judicial notice of the proceedings, and made no appearance therein, that said order constitutes no adjudication against plaintiff, and is in no manner binding upon it. On the other hand, the railroad company urges that, whether or no thcIllinois proceedings effect an adjudication in the strict sense, these proceedings are none the less entitled to the proteo [101] tion of the full faith and credit clause of the Constitution of the United States. For reasons presently to be stated, we are of opinion that neither contention should be entertained by us at this time. 1-a 1. Appeal and error: foreign judgment as bar: Federal questions. The Federal question now presented was not made below, and we are inclined to think that, to raise it here, the trial, court should have been given an opportunity to pass upon it. True, defendant did claim below that the Illinois proceedings were a bar to the claim of the plaintiff. But this did not necessanly invoke the protection of the full faith and credit clause of the Constitution of the United States. The protection of the full faith and credit clause may, of course, be waived. And such asserted bar can rest upon state statutes, state decisions, or common-law rules. Wherefore, making such defense is not necessarily a claim of protection under the Federal law. To say the least, the better practice is to make the Federal question in the court of the first instance. 2-a 2. Pleading: pleadings demurrable. The defendant confesses that it holds a balance due of $868.70 on the claim that belonged to Cox before he assigned it to the plaintiff. It appears that the Illinois judgment impounded but $177.25 of that sum. The defense set up this $177.25 judgment as a compíete defense, and asked that the plaintiff be sent out of court because of the judgment which, at most, appropriated but a part of the fund which the plaintiff claimed. It is manifest that this defense is too broad. The plaintiff was entitled to recover at least so much of the fund as exceeded the amount of the Illinois judgment; therefore, the existence of that judgment, no matter how binding, would not sustain the claim that plaintiff [102] was entitled to no relief; wherefore, the demurrer to such plea was good. See 1 Chitty on Pleadings, *459, 524; Lord v. Brookfield, 37 N. J. L. 552, 554; Graffin v. Jackson, 40 N. J. L. 440; Bailey v. Pennsylvania, R. Co., 70 N. J. L. 308 (58Atl. 83). The defendant pleaded the sequestration of part of a fund claimed by the plaintiff, and thereupon asked that plaintiff recover nothing. It framed its own defense. The court could not reframe it, but, on demurrer interposed, was bound to pass upon the plea as defendant had tendered it. See Mitchell v. Beck, 178 Iowa 786. We may assume that the partial sequestration gave the defendant some rights, but it was not the right to have the plaintiff go hence without any recovery. Whether the partial sequestration should defeat the plaintiff’s claim in its entirety was the only question tendered by the demurrer on this-point; and the court, by sustaining the demurrer to such plea, ruled rightly that defendant was not entitled to the relief it sought. At this point, then, it is quite immaterial whether the full faith and credit clause protects the Illinois judgment, or whether the same operates as an adjudication in strictness, or has any binding effect upon the plaintiff. No matter how much the full faith. and credit clause protects it, or whether it was or was not a binding adjudication, -¿he plaintiff was certainly entitled to recover so much of the fund due it as the Illinois judgment did not profess to touch. Wherefore, as said, a plea of the Illinois judgment as a complete defense was demurrable, because it was no such defense, no matter how the law dispute between these contenders be settled. If a cause can be affirmed without passing upon an asserted Federal right, such right will not be inquired into. New Orleans & N. E. R. Co. v. National Rice Milling Co., 234 U. S. 80 (34 Sup. Ct. Rep. 726). [103] 3. Continuance: pendency of foreign garnishment proceeding. IT. But the defense in bar was not the sole defense. There was an allegation that judgment had been entered against the defendant for $177.25; that this judgment had been appealed, and the appeal was pending in one of the state courts of Illinois. See abstract, page 9. Based upon these allegations, there was a prayer for alternative relief, asking “that this action may be continued until final disposition of the appeal from the judgment rendered against defendant in the justice court of Joseph Dimke at Galena, Illinois. (Abstract, page 10.) The sustaining of the demurrer denied the right to such alternative relief. In our opinion, even as the plea in bar was too broad, the demurrer was too broad, and defendant should have been awarded the continuance it prayed. Ordinarily, the pendency of a suit in another jurisdiction will not base an abatement; but to this rule there is at least one exception, and this case is squarely within it. A garnishee impleaded in one jurisdiction may use the proceedings and orders therein as an abatement, when impleaded in another jurisdiction by another debtor of his creditor’s. See Lancashire Ins. Co. v. Corbetts, 165 Ill. 592 (46 N. E. 631), and Illinois cases therein cited; Jones v. Jones, 108 N. Y. 415 (15 N. E. 707); Embree & Collins v. Hanna, 5 Johns. (N. Y.) 101; Wallace v. McConnell, 13 Peters (U. S.) 135; Whipple v. Robbins, 97 Mass. 107; American Bank v. Rollins, 99 Mass. 313. There is a strong analogy between the situation existing here and the cases wherein appellate tribunals apply a rule known as “the balance of convenience rule,” in making provisional orders to preserve the status of what is involved in an appeal taken. As to this rule, we said, in Wehrman v. Moore, 177 Iowa 542, at 551: “All that the judge should require is a case of probable right, or probable danger to the right without the interfer [104] ence of the court; and its discretion should lie regulated by the balance of inconvenience or injury to one party or the other *’* * that, in a. case where the issuance of a preliminary injunction can cause no substantial loss to anyone in any event, while the failure to issue it might result in a total loss by the plaintiff of all his right and claim in the subject-matter, the temporary injunction should be issued, unless it is reasonably clear that the alleged ground of action is altogether without any just foundation.” Applying this doctrine, we held that, if a stay of proceedings will cause plaintiff no damage if plaintiff finally prevailed, and a refusal to give the stay may leave the defendant without remedy, should he finally prevail, that then there is a proper case for granting the stay. And in substantially just such a case as we have now before us, the right to have such stay is recognized, in Bailey v. Pennsylvania R. Co., 70 N. J. L. 308 (58 Atl. 83). The essence and spirit of this rule of appellate practice fairly governs here. No good reason exists why this continuance should be denied, while there is every reason for granting it. If the Illinois judgment shall become final on appeal, it will become necessary to determine here whether such judgment binds the plaintiff. But why indulge in a conflict between the jurisdictions until that becomes unavoidable? Ho far from endorsing needless precipitation of such a conflict, the law demands the observance of every reasonable comity, and, therefore, makes it the duty of the citizen within the jurisdiction of the court last resorted to “to avoid conflicts of jurisdiction” and the tying up of the fund by litigation to settle the conflict between the states. Lancashire Ins. Co. v. Corbetts, 165 Ill. 592 (46 N. E. 631). The most that can hapjjen is that, should the judgment in Illinois be affirmed, it must then be determined here whether such judgment shall affect the plaintiff. The delay sought by defendant will not injure the plaintiff, should such judg [105] ment be upheld. The plaintiff will be still able to urge what it does now. If its contention be then sustained, it will recover the entire fund, with interest. Should its attack upon the judgment, when final, be held untenable, the delay will not have been injurious; for, in that event, the delay will .but have settled that plaintiff was never entitled to so much of the fund as the Illinois judgment sequestrates. Should 'the Illinois judgment be reversed by the higher courts in Illinois, the delay, so far from injuring the plaintiff, will be of benefit lo it. In that event, there will be no occasion for litigation, and the garnishee will be bound to pay over the entire fund to plaintiff, and have no defense to urge against doing so. Every possible contingency that may occur by reason of the delay can do the plaintiff no harm which the law recognizes. On the other hand, it is manifest that a refusal to grant the delay asked may do the defendant an injury. By going on with its appeal in Illinois, the defendant may be relieved from having any conflict with the plaintiff. If the judgment should be reversed, then, as said, the defendant will be able to pay this plaintiff in safety, and without a contest. By refusing the continuance, the defendant is absolutely prevented from taking at least one step that might free it from double liability. Granting the continuance makes it at least possible, without any injury to the plaintiff, to create a situation whereby defendant need not pay double, and need have no contest with plaintiff. If the continuance be denied, it cannot go on with an effort which might make it unnecessary to pay double though plaintiff recover the entire fund. TVe are of opinion the defendant was entitled to the alternative relief prayed for, and that, therefore, it was error to hold, by sustaining (he demurrer, that defendant was not entitled to lliat relief. [106] 4. Appeal and error: non-complaint of manifest and substantial error. [105] The difficulty we have in reaching this conclusion is created by the fact that, while the record discloses the alie [106] gation that appeal is pending, and the prayer that trial be deferred until this appeal is determined, and exhibits that this relief was denied, no complaint is made of such denial. But we have often said that the rules of presentation • here are for the benefit of the court;.that ihey may be waived by the court, and in a proper case, should be waived by it. See Cooley v. Maine, 183 Iowa 560; Mitchell v. Beck, 178 Iowa 786. We think here is a .rase for waiver. In the higher Federal coirrts, it is usual to relieve for “manifest error,” though the presentation disregard the rules. These rules are not made to give sanctuary to wrongs. Their purpose is to furnish the court with helps in determining whether there is an error to right. If it be plain that there is, rule presentation would make it no plainer, and the only bar to consideration would be by abandonment. We have pointed out that the ruling below, while of no substantial benefit to the appellee, works a substantial hardship upon the appellant; that no good reason exists for denying the alternative relief which appellant sought. It is beyond belief that appellant intends to abandon his claim for alternative relief. It is fairly apparent that it did not press it according to rule because it was over-confident in believing that another question presented would be entertained and so decided as to make it needless to complain of the denial of alternative relief. Tf the rules may ever be waived, it certainly should be done where' a needless wrong will result if the rules of presentation are insisted upon. Moreover, in passing in this case upon whether the alternative relief should be granted, we are not so much foregoing some benefit to this court, as relieving the court from doing what at this lime should not be done. Should we now determine that the Illinois judgment does not affect the plaintiff, Ave might be deciding a question that, for aught Ave know, may, at this very time, [107] be moot, because said judgment has been reversed. We are not so much waiving our rules of presentation, as declining to disregard a manifest error for the purpose of settling what may be a mere academic question, or may become one, if certain steps be taken before we act finally. We are, in effect, doing no more by this “waiver” than deferring our action until it shall be settled that we need to act. In view of the conclusion reached, it is, of course, improper to go into the effect of the Illinois judgment, should same be approved in Illinois. The cause is remanded to the district court for further proceedings in harmony with this opinion. If, when the matter is reached for hearing, on this remand, it shall be made to appear that said judgment of the justice of the peace has been finally affirmed, the defendant has leave to amend its answer, if so advised; and should demurrer thereto be interposed, any rulings thereupon will be reviewable, on appeal therefrom by the party aggrieved thereby. If, when hearing is reached on remand, it shall appear that said judgment has not been made final, the court will enter an order granting defendant a reasonable time to obtain a final appellate decision in Illinois, as to the standing of said Illinois judgment. — Reversed cmd remanded. Ladd, Gaynor, and Stevens, JJ., concur.