Wilkinson v. United States Fidelity & Guaranty Co.

SiebecKee, J. The appellant asserts that the court erred in not requiring respondent to prove that the original judgment remained unpaid. The answer admits that judgment was recovered by the respondent in the original suit, wherein the undertaking sued on in this action was given as alleged in the complaint, but alleges no knowledge or information sufficient to form a belief “whether the same or any part thereof has been paid or not.” The allegation of the answer is not sufficient, to entitle appellant to the benefits of the plea of payment; it amounts to no more than a general denial, under which proof of payment cannot be received. Martin v. Pugh, [228] 23 Wis. 184; Hawes v. Woolcock, 30 Wis. 213; Rossiter v. Schultz, 62 Wis. 655, 22 N. W. 839; Meating v. Tigerton L. Co. 113 Wis. 379, 89 N. W. 152. Appellant alleges fraud on tbe part of tbe defendant in procuring tbe undertaking sued on, but makes no claim that respondent in any way participated in perpetrating sucli alleged fraud. We are unable to perceive bow respondent can be affected in bis legal right by fraudulent conduct of the defendant in procuring a dissolution of tbe garnishment proceeding of which he bad no notice or knowledge to put him on inquiry as to the alleged fraudulent conduct. It was incumbent on apjtellant to protect itself from any deception by tbe defendant, and if it was induced to give tbe undertaking by bis fraudulent conduct then it must suffer the injury; for the law demands that he who deals with and trusts another, and thereby suffers an injury, should be the loser rather than a stranger. It is further contended that it was error on the part of the trial court not "to permit the defendant to show that the garnishee did not owe the defendant, judgment debtor, anything at the time the undertaking was given. Sec. 2771, Stats. 1898, provides that “The defendant may, at any time after the commencement of the action and before judgment, file with the clerk of the court an undertaking executed by at least two sureties, . to the effect that they will, on demand, pay to the plaintiff the amount of the judgment with all costs that may be recovered against such defendant in the action,” etc., and that “thereafter the garnishee shall be discharged and the garnishment proceeding shall be discontinued,” etc. When the defendant in the original action elected to give the undertaking under this statute, which supersedes tire garnishment proceeding, he waived all right to an investigation of any issue in that proceeding, and is thereby estopped from a trial of the question whether anything was due at the time [229] of the garnishment. Thoen v. Harnstrom, 98 Wis. 231, 73 N. W. 1011; Greengard v. Fretz, 64 Minn. 10, 65 N. W. 949. The purpose of the statute is to afford the defendant an opportunity to release his property in the hands of the garnishee, and substitute an undertaking, with sureties, in place of the property impounded by the proceeding. This proceeding being discontinued, and the sureties haying undertaken to pay in place of the judgment debtor, they must be held to stand in the same position, and be estopped from denying that the garnishee was in any way liable to the defendant. The statute is like that allowing bonds to be given to release the property where attachments have issued, which are conditioned for the payment of judgments obtained against defendants. In such eases the liability of the surety becomes absolute when judgment is rendered against the defendant for whose benefit the bond was executed. Dierolf v. Winterfield, 24 Wis. 143; Billingsley v. Harris, 79 Wis. 103; 48 N. W. 108. By the Court. — The judgment of the circuit court is affirmed.