Tootle, Hosea & Co. v. Joseph Cahn & Co.

The opinion of the court was delivered by JOHNSTON, J.: A retail dealer in merchandise, at Ashland, named Miner, failed in business, and the result was that sev [76] eral separate attachment actions were brought against him by creditors, among whom were the parties to this proceeding. Several of the actions were prior, in point of time, to those of the parties herein, and in all of them judgments were rendered at the following term of court, in March, 1888. No controversy exists as to the actions first brought, or as to the attachments first levied. In one of the prior actions, an order was made by the court for the sale of the attached property, which was of a perishable nature, under which the proceeds of the sale were placed in the custody of the clerk of the court, to be kept by him subject to its further order, which was done. On July 30, 1888, Miner made a written transfer and order upon the clerk of the court, who was in custody of the funds, to pay to Tootle, Hosea & Co. the amount of their judgment, which order was accepted by the clerk on the same day, and subsequently an assignment and transfer to Tootle, Hosea & Co. was made by Miner of two promissory notes which were in the hands of the clerk, and had been received for a portion of the goods that had been sold. This assignment was made in duplicate, and one copy delivered to and received by the clerk on the 1st or 2d day of August, 1888. On the 30th day of July, 1888, motions were made by E. S. Miner in each of the actions brought against him by Joseph Cahn & Co. and Tootle, Hosea & Co., to set aside the judgments previously rendered, upon the ground that he was a resident of Ohio at the time the service of summons was made at his former place of business in Kansas. The motion, in the case of Tootle, Hosea & Co., was heard on July 30, when the judgment was set aside,” but not the proceedings in attachment. In the case of Joseph Cahn & Co., the motion was heard upon August 8, 1888, and the judgment formerly rendered in that.- case was set aside, and on the following day Joseph Cahn & Co., upon their own motion, secured a dismissal of the cause without prejudice to a future action. On August 9, Miner appeared in the case of Tootle, Hosea & Co., waived the issuance [77] of process, entered his appearance and confessed his indebtedness to that firm for $3,856.58, and agreed that judgment might be rendered against him for that sum. The court thereupon rendered judgment in their favor for that amount, and further ordered and adjudged that the attachment which had been previously issued in the action should be sustained. On the same day, and after the dismissal of their former action, Joseph Cahn & Co. instituted another action against E. S. Miner, and immediately obtained service of summons upon him. At the same time an order of garnishment was obtained and served upon the clerk of the court, by which they undertook to garnish the funds which had been placed in his hands under an order of the court, and which were the proceeds of the sale of the attached property; It appears that the order of garnishment was served before the judgment in the case of Tootle, Hosea & Co. was entered. On the same day Joseph Cahn & Co. filed- their motion in the action of Tootle, Hosea & Co. wherein they had obtained judgment, asking the court to vacate and set aside the attachment lien of Tootle, Hosea & Co., so far as the same appears to be prior and superior to that of Joseph Cahn & Co., and to adjudge the same to be junior and inferior to theirs. The clerk of the district court moved also to be discharged as garnishee in the last case brought by Joseph Cahn & Co., and several months afterwards these two motions were heard together. The court found and adjudged that the lien of Joseph Cahn & Co. was prior and superior to that of Tootle, Hosea & Co., and ordered the clerk of the court to apply the funds in his hands to the payment of the judgment of Joseph Cahn & Co., and discharged Stockton, the clerk, as garnishee. The ruling made against Tootle, Hosea & Co. was excepted to and is here for review. We are unable to sustain the decision of the court giving priority of lien or right in the fund to Joseph Cahn & Co. When that firm dismissed its action, on August 9, it lost its lien or any claim of lien obtained in that action. Prior to [78] that time Miner had assigned and transferred to Tootle, Hosea & Co. all his interest in the proceeds of the sale, which were in the hands of the clerk, subject to the liens of the attaching creditors who were prior in point of time and right to the contesting parties in this case. This assignment and transfer had been received and accepted by the clerk before any new action was begun by Cahn & Co. or any garnishment process had been served. The debt and judgment of Tootle,. Hosea & Co. against Miner for which the assignment was made exceeded in amount the remaining proceeds in the hands of the clerk. When the!action of Cahn & Co. was dismissed,, the assignment and transfer became effective, and left nothing in the hands of the clerk to be seized by the process of garnishment or attachment. More than that., on August 9 a judgment was rendered in favor of Tootle, Hosea & Co., whose action was not dismissed, in which the attachment proceedings previously obtained were sustained, and ordinarily the lien of an attachment thus sustained would relate back to the original levy of the writ. It is true the summons by which an attempt was made to garnish the clerk appears to have been served a few minutes before the entry of judgment in favor of Tootle, Hosea & Co.; but even if the latter had not already acquired a superior right over Cahn & Co., it is doubtful whether the attempted garnishment would have been of any force. The property had been seized by attachments in other actions, and by order of the court it was sold and the proceeds placed in the custody of the clerk to await its further orders. Funds so held by an officer are generally regarded to be in the custody of the court, and hence not to be reached by garnishment of the officer. But however that may be, Tootle, Hosea & Co. had previously acquired the right and interest of Miner in the funds, and we find nothing in the record which impeaches the good faith and honesty of the transaction. The debt of Tootle, Hosea & Co. was bona fide, and no blame is to be attached to them for making diligent endeavor to secure priority and preference, nor is there any reason why Miner might not prefer one creditor over another. [79] The decision and order of the court must therefore be reversed, and the canse remanded for further proceedings. All the Justices concurring.