R. T. Davis Mill Co. v. Bangs

Wells, J. The real questions in this case are : Can the surplus value of personal property in the hands of a mortgagee be held by another creditor of the mortga,gor by a garnishment of the mortgagee in possession, as against attaching creditors of the mortgagor? and, if this be answered in the affirmative, then, Does the lien of the garnishment accrue upon the surplus in the hands of the garnishee at the time of the service of the summons, so as to make it prior to an attachment then in the hands of the sheriff and afterwards levied upon the property ? Both of these questions must be answered in the affirmative. It is claimed by the plaintiff in error that a garnishment constitutes only a personal liability against the garnishee, and is not a specific lien upon the property in his hands. It is probably true, as stated in Drake on Attachments (§453), “ that the plaintiff does not acquire a clear and full lien upon the specific property ; ” but he does acquire such a lien as the courts will protect and enforce, as was done in this case. Since this case was submitted, our attention has been called by plaintiff in error to Lumber Co. v. Trust Co. (54 Kan. 124), and Bradley v. Byerley (3 Kan. App. 357), as decisive of this case in its favor. We do not not think either of these cases decides the law to be as claimed by plaintiff in error. The contention here is, that a mortgagee in possession of property under his mortgage cannot, before he has sold his property and satisfied his debt, be garnisheed as a debtor, or as one having property of the mortgagor. In Lumber Co. v. Trust Co., supra, the court says : “A garnishment proceeding is no more than a substitution of the plaintiff for the defendant debtor in the enforcement of any liability against the garni [41] shee, and therefore the plaintiff can acquire no greater rights against the garnishee than the debtor himself possessed or could enforce.” Accepting this statement of the law as correct, let us inquire if the debtor had no right to the property which he could protect if it was about to be misapplied. Is not the same property reached by both the garnishment and the attachment? It is conceded that the mortgagee is entitled to have his interest in the property fully protected, but he has not the privilege of dictating the disposition of the surplus in his-hands so as to defeat the rights of a diligent creditor in favor of one who is less diligent. The other case cited, Bradley v. Byerley, supra, is no stronger. In that case the court held that “such trustee is not liable in proceedings in garnishment, unless it appears that at the time of service of the notice in garnishment a surplus remained in his hands belonging to the debtor.” There was no question but that there was a large surplus in this case ; in that there was none. We see no material error in this case. Complaint is made that the court erred in granting a temporary injunction without notice, and in refusing to dissolve the same upon motion of the plaintiff in error. The question of requiring notice before granting injunctions in cases like this is one which appeals to the discretion of the court before whom the application is made. We see no abuse of discretion in this case. The judgment of the District Court will be affirmed.