Stevenson v. McFarland

BURGESS, J. This is an action in the nature of an equitable garnishment, by which it is sought to subject to the payment of,three judgments, obtained by plaintiffs against the defendant McFarland, aggregating $3,797.66, his interest in — 163 — a contract between himself, Kilgen and their co-defendant Vette, entered into on the first day of October, 1895, by the terms of which Vette agreed to pay MeEarland in return for services to be rendered to him (Vette) twenty-five per cent of the profits made out of his business, which was that of loans and real estate in the city of St. Louis, during the period in which the services were to be rendered, McFarland and Kilgen were entitled to draw in advance from said business the sum of one hundred dollars each month, but were not to draw in excess of that amount. This suit was begun in July, 1897. McFarland’s interest in the business was worth more than five thousand dollars. ,, On July 20, 1897, McFarland made an assignment, in writing, of his interest in the business to his co-defendant Kilgen, which plaintiff claims and the evidence tended to show, was without consideration and fraudulent. On July 21, 1897, McFarland and Vette agreed upon a settlement, and with respect thereto, at the request of McFarland, the court made a finding of facts as follows: “1. Defendant McFarland respectfully requests the court (under section 2135, Revised Statutes 1889), to find specifically as facts, that, after McFarland and Vette had agreed upon the terms of settlement for the interest of the former under the contract of October 1, 1895, and before said terms of settlement were actually carried out, Vette refused to perform on his part, said agreement for settlement, unless a bond was also executed to him to secure him against loss by' reason of the Buckingham garnishment that had been meanwhile served on him (Vette); and that thereupon (said bond having been refused), the said settlement was mutually declared “off” or abandoned by all parties — Messrs. Vette, McFarland and Kilgen — and that thereafter said McFarland, with the assent of Vette, returned to the performance of — 164 — his (McFarland’s) regular duties under the original contract of October 1, 1895, and continued to perform those duties for several days with the knowledge and assent of said Yette. “2. Defendant McFarland respectfully requests the court to find specifically as facts that, from July 22, 1897, to July 27 or 28, 1897, on the occasion when Yette last notified McFarland to discontinue his services, both Yette and McFarland operated under and continued the business of the concern of John H. Yette & Oo., upon the rndtual understanding and agreement that said contract was still in force. “3. Defendant McFarland respectfully requests the court to find specifically as facts, that, after the terms of settlement for McFarland’s interest in the business of John H. Yette & Co. had been agreed on between McFarland and Yette, the latter insisted on another stipulation being added to the terms of settlement,- which stipulation was not accepted nor agreed to by McFarland or Kilgen, and thereupon the settlement was mutually agreed by said three parties to be ‘off’ or at an end, and thereupon, with Yette’s consent, McFarland proceeded to render services as required by the contract of October 1, 1895, until Yette refused to permit McFarland to further proceed to render such services on the twenty-seventh or twenty-eighth day of July, 1897. “4. Defendant McFarland respectfully requests the court to find specifically, as facts, that immediately after Yette notified McFarland (on the twenty-seventh or twenty-eighth day of July, 1897) to discontinue his services for John H. Yette & Co., and for several days prior to said notice, McFarland and Yette had both been conducting the business of John H. Vette & Oo. under the original contract of October 1, 1895, and.that both of them had mutually treated and accepted the prior negotiations for settlement of McFarland’s interest in the business of John H. Yette & Oo. as abandoned and ended.” — 165 — Thereupon the court rendered the following judgment: “Now, at this day come said parties by their respective attorneys, and the court being now fully advised in the premises, doth find the issues joined (upon the cause of action stated in the plaintiff’s petition) in favor of the defendants, and the court further finds the issues joined between the defendant McFarland and the defendant Vette (upon the separate answers of said defendants herein) in favor of defendant McFarland. It is, therefore, considered, decreed and adjudged by the court that plaintiff’s petition herein be dismissed without prejudice, and it is further considered and adjudged that the contract between said McFarland and said Vette, of date October 1, 1895 (mentioned in said answers of said defendants), is still in force and obligatory upon said McFarland and Vette, and that, prior to the institution of this suit, there was no settlement or accounting had between said McFarland and Vette determining the interest of said McFarland under or by reason of the said contract; and that all of said defendants in this cause recover of plaintiffs their costs and charges in this behalf expended, and have therefor execution.” After unavailing motion for .a new trial plaintiffs appeal. While in cases of this character the Supreme Court is nos bound by the findings of the trial court as to facts, or by .its conclusions of law, it will defer somewhat to such findings of facts, and if sustained by the evidence, or the evidence is equally balanced, it will not be interfered with. _ In this case the evidence well warranted the finding that the terms of settlement agreed upon on July 21, 1897, by Vette and McFarland, had not been carried out before it was in effect cancelled by mutual agreement between them, and McFarland had returned to work on the twenty-second day of July, 1887. After a talk with Vette in which Vette said that it was about the proper — 166 — thing to do, the settlement was declared off. The contract between Vette and McFarland was to continue for three years, and as it had not. been terminated, or McFarland’s interest in the business ascertained at the time of the commencement of this suit, his interest was not the subject of garnishment or execution. Plaintiffs could not have acquired by garnishment any greater right than McFarland had under his contract with Yette by which it was provided that he could only draw one hundred dollars per month “until and unless upon the termination of this contract it shall be ascertained by collection of all outstandings that the net profits arising to each shall have been in excess of the sums so respectively drawn by them.” During the existence of this contract there was no way by which McFarland’s interest in the business could be ascertained, nor could McFarland himself have maintained an action against Yette for his interest in the business before the expiration of the time for which the contract was to run, unless by some act or agreement of the parties it should be terminated before that time, and plaintiffs occupy no more advantage ground than McFarland does. In discussing equitable garnishment in Johnson v. Publishing Company, 122 Mo. 104, Sherwood, J., said: “But in equitable garnishment, as in legal process having a similar object in view, nothing more can be accomplished against the debtor of the defendant than in a direct suit against the former by the latter. The method used to reach the funds in the garnishee’s hands can not alter his status, nor enlarge or vary the grounds of his defense.” It is claimed by plaintiffs, however, that the assignment by McFarland to Kilgen of his interest in the business was fraudulent as to his creditors, and that the court should have so found, but we are unable to see how this, if true, rendered — 167 — McFarland’s interest subject to equitable garnishment, before the contract was terminated, and his interest ascertained. While in this State we have no statute providing for a proceeding of equitable garnishment as distinguished from ordinary garnishment or trustee process, when a judgment ha3 been obtained against a resident of this State, and execution has been issued thereon and returned nulla bona, a court of equity, in the exercise of its general jurisdiction, will assist such creditor under a proper showing to “reach and apply to the payment of,his debt any property of the judgment debtor, which by reason of its nature only and not by reason of any positive rule exempting it from liability for debt, can not be taken on execution at law.” [Ager v. Murray, 105 U. S. 126.] Now, plaintiffs contend that because defendant McFarland’s interest in the business can not'be reached by trustee process, a proceeding by equitable garnishment is their only remedy, but the process of garnishment under the statute, and a proceeding in equity to reach property in its nature not subject to garnishment, are in effect instituted for the same purpose. They are as a general rule prosecuted for the purpose of reaching money in the hands of a third party due and owing by a judgment debtor to a judgment creditor. It is conceded by plaintiffs that the interest of McFarland could not be reached by garnishment or trustee process, because a contingent one, and it is inconceivable how this action can be maintained, because both the garnishment or trustee process, and equitable garnishment, proceed upon the same line, and when the interest or property sought to be subjected to the payment of the debt is contingent upon the happening of some future event, as in this case the successful management of the real estate and loan business, and not until the termination of said contract and the collection of all outstandings can it be ascertained whether or not the net profits shall have been in excess of the — 168 — sums drawn by each, it is uncertain whether McFarland will or will not have any interest therein, hence, such interest can not be reached in this proceeding so long as the contract continues in force. The institution of this suit did not in any manner change the rights of McFarland under the contract, and could do no more in any event than to substitute plaintiffs to his rights. In 2 Shinn on Attachment and Garnishment, section 487, it is said: “It is a rule of universal application that the plaintiff in garnishment is, in relation to the garnishee, substituted merely to the rights of his own debtor, and can enforce no demand against the garnishee which the debtor himself, if suing, would not be entitled to recover. He is in no better position than his debtor was either as to the recovery of a debt from, or chattels in possession of, the garnishee.” No one will contend that McFarland, under the circumstances of this case, could have maintained an action against Vette for his interest in the business until the contract between them was terminated, and it must of necessity follow that plaintiffs could not do so. The judgment is affirmed. Sherwood, P. J., and Gantt, J., concur.