German American Bank v. Butler-Mueller Co.

Newman, J. The question on this appeal is whether one creditor of an insolvent debtor can gain a preference over other creditors of the same debtor, against the debtor’s will, by instituting a garnishment action, in .a ease where [470] it is true, to the creditor’s knowledge, that the debtor has property liable to execution, within the creditor’s own county, many times sufficient to satisfy the creditor’s demand. Before the process of garnishment can issue, an affidavit must be made on behalf of the plaintiff which shall state, among other things, that the deponent “ verily believes . . . that such defendant has not property liable to execution sufficient to satisfy the plaintiff’s demand.” R. S. sec. 2753. It being a harsh remedy, the statute which gives it will not be extended by construction to cases not fairly within its words. It is safe to assume that it is not the intention of this statute to permit garnishment where the debtor has property liable to execution sufficient to satisfy the plaintiff’s demand, for it has limited the right to cases where the defendant has not sufficient property. It is not intended that such a debtor shall be tied up by garnishment so long as he neither does nor contemplates doing some act which will justify an attachment against his property, because the creditor cannot always know the true state of the debtor’s property; and to make the remedy effective he is permitted to inaugurate this remedy by his affidavit that he verily believes that his debtor has not property liable to execution sufficient to satisfy his demand. But if, in truth, it shall appear that the debtor has property sufficient to satisfy his demand, a case is shown where this remedy is not within the intention of the law. This process has been used in a case not intended by the lawmakers. Doubtless some liberality must be allowed in order to give the remedy efficiency. But where the property of the debtor is abundant for the satisfaction of the plaintiff’s claim, there can be no case for garnishment; and where it is known to the affiant that the debtor has property subject to execution, sufficient, many times, to satisfy the plaintiff’s demand, he cannot honestly make the affidavit. To procure [471] the process in such a case is an abuse of the remedy given by the statute. The fact that the debtor is insolvent and proposes to make an assignment for the benefit of his creditors, is irrelevant. The statute has not made that a ground for either attachment or garnishment. That is a perfectly lawful disposition of an insolvent debtor’s property. In fact the law rather favors the making of assignments by insolvent debtors, because such assignments promote a fair and just distribution of all the insolvent’s assets among all his creditors, without preference to any. In this case the affidavits in support of the motion seem to show clearly that the defendants had, in Milwaukee county, property subject to execution many times sufficient to satisfy the plaintiff’s demand. Neither the fact nor the knowledge of it by the plaintiff’s officers is denied on behalf of the plaintiff. It seems to be clear that the remedy of garnishment has been used in a case not contemplated by law. This can be nothing less than an abuse of the remedy. It can rightfully give the plaintiff no preference over the other creditors of the defendants. The defendants have standing to make this motion. The statute gives the defendant the right to defend the garnishee action “upon any ground upon which a garnishee might defend the same.” R. S. sec. 2765. The right of the garnishee to make this motion in defense of the action would not be questioned. By the Cov/rt.— The order of the superior court of Milwaukee county is reversed, and the cause remanded with direction to dismiss the action.