72 Ala. 32 (Ala. 1882), Henderson v. Alabama Gold Life Ins. Co.

Citation:72 Ala. 32
Opinion Judge:SOMERVILLE, J.
Party Name:Henderson v. Ala. Gold Life Insurance Company. Henderson v. Horton.
Attorney:F. G. BROMBERG, for appellant. OVERALL & BESTOR, contra.
Court:Supreme Court of Alabama
 
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Page 32

72 Ala. 32 (Ala. 1882)

Henderson

v.

Ala. Gold Life Insurance Company.

Henderson

v.

Horton.

Supreme Court of Alabama

December Term, 1882

Bills in Equity by Creditors, for Marshalling Securities.

APPEAL from the Chancery Court of Mobile.

Heard before the Hon. JOHN A. FOSTER.

Where a creditor has a lien on two funds in the hands of the same debtor, and another creditor has a lien on one of them, equity, on the application of the latter, will compel the former to make his debt out of that fund to which the latter cannot resort.

These two cases were consolidated by the order of the chancellor in the court below, and were argued and considered as one case. The bills were filed on the 11th March, 1880,--one by the Alabama Gold Life Insurance Company, a domestic corporation, and the other by Frank S. Horton--against George G. Duffee and William Henderson; and sought to enjoin said Henderson, as the assignee of Duffee, from proceeding further at law to claim a fund, which had been deposited in court by Joseph Steiner, as garnishee, in suits instituted by the complainants respectively against said Duffee; and to compel him to first exhaust other securities alleged to be held by him for the payment of his debt, in order that the complainants might obtain, out of the said fund, satisfaction of the judgments which they had recovered in their said actions at law against Duffee.

The suit in favor of the Alabama Gold Life Insurance Company against Duffee was commenced on the 12th August, 1879; and a garnishment was sued out against Steiner, as the debtor of Duffee, which was served on the garnishee on the 13th August, 1879. The action in favor of Horton was also commenced on the 12th August, 1879; and a garnishment was sued out against Steiner, which was served on him on the 14th August. In each case, judgment by default was rendered against Duffee, the defendant in the original suits, on the 22d November, 1879. The garnishee, in each case, filed an answer, substantially the same; stating, among other things, that Duffee became indebted to him on the 26th August, 1877, by promissory note for $1,458, and, to secure the payment of that note, on that day transferred to him, as collateral security, a policy of insurance for $5,000 on the life of one Martin Robbins, who was then living, "and all his (said Duffee's) interest in the partnership assets belonging to the late firm of Dunklin, Duffee & Co.; and it was then and there agreed between said Duffee and this garnishee, that the proceeds of said policy of insurance and said partnership interest should be applied by this garnishee to payment of said note for $1,458, and for the residue, after paying expenses of collection, &c., he was to account to said Duffee." The answer further stated, that said Robbins, whose life was insured, died on or about August 1st, 1879, and proof of his death, &c., had been prepared and forwarded to the insurance company; and that the garnishee had been notified, "on or about December 17th, 1878, that said Duffee had transferred whatever interest he had in said policy, after this affiant's said claims were satisfied, to W. B. Montgomery, who resides near Starkville, Mississippi, and who now claims said residue, if any there be, as his property." A supplemental answer was afterwards filed by the garnishee, alleging that he had collected the money due on the policy, and, after paying his own claims, necessary expenses, &c., had remaining in his hands a balance of $2,267.38, which he brought into court; and he prayed that the plaintiffs in the garnishments and said W. B. Montgomery "be required to interplead, and to propund their respective claims to said fund, and that he be discharged."

The record does not show that Montgomery was ever notified of the garnishment proceedings; but, on the 4th March...

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