First Int'l Bank of Minot v. Brehmer, 5172.

• Decision Date: 26 November 1927
• Docket Number: No. 5172.,5172.
• Citation: First Int'l Bank of Minot v. Brehmer, 56 N.D. 81, 215 N.W. 918 (N.D. 1927)
• Parties: FIRST INTERNATIONAL BANK OF MINOT v. BREHMER (FIRST INTERNATIONAL BANK OF MINOT, Garnishee).
• Court: North Dakota Supreme Court

56 N.D. 81

215 N.W. 918

FIRST INTERNATIONAL BANK OF MINOT

v.BREHMER (FIRST INTERNATIONAL BANK OF MINOT, Garnishee).

No. 5172.

Supreme Court of North Dakota.

Oct. 14, 1927.

Rehearing Denied Nov. 26, 1927.

Syllabus by the Court.

A bank cannot, under chapter 139 of the 1923 Session Laws, charge against a deposit a debt due it from the depositor, or appropriate the deposit for the purpose of paying the debt without “legal process” or “the consent of the depositor.”

The plaintiff in an action cannot, under the garnishment statutes of this state, summon or charge himself as a garnishee therein.

Appeal from District Court, Ward County; Geo. H. Moellring, Judge.

Action by the First International Bank of Minot against Amos Brehmer, in which plaintiff garnished itself. From a judgment of dismissal, plaintiff appeals. Affirmed.

Paul Campbell, of Minot, for appellant.

Halvor L. Halvorson, of Minot, for respondent.

ENGLERT, District Judge.

On the 4th day of February 1920, the defendant, Amos Brehmer, executed and delivered his promissory note, in the sum of $500, bearing 10 per cent. interest, due October 1, 1920, to the plaintiff, a banking institution. This note remained unpaid. The defendant, on the 31st day of October, 1924, deposited in the plaintiff bank, on general deposit, the sum of $513.85. On that day, the plaintiff commenced an action against the defendant on the note, and commenced garnishment proceedings, naming itself as garnishee defendant. The plaintiff, as garnishee defendant, through its cashier, admitted liability in the sum of $513.65; 20 cents having been paid out for exchange.

On November 20, 1924, the defendant filed his petition in bankruptcy, and was thereon adjudicated a bankrupt on November 21, 1924. The said note was listed in the bankruptcy schedules, and the bank was notified thereof, and of the bankruptcy hearing. On March 4, 1925, the defendant was discharged of all provable debts in said bankruptcy proceedings, including the note in question.

The defendant answered, setting forth, among other defenses, that the action was begun within the four months' period prior to the filing of the bankruptcy proceedings, and that the debt sued on was discharged thereby. He also alleged that the plaintiff cannot lawfully be both plaintiff and garnishee defendant in the same action.

A trial was had before court and jury. A special verdict was returned. It is not necessary to set forth the various answers made to the questions submitted, since the court, on the undisputed facts, found that the note was duly listed in the bankruptcy schedules; that plaintiff had due notice thereof; and that the debt was adjudicated in the bankruptcy proceedings, and discharged.

The court, then, found that no personal judgment could be entered against the defendant, but that the question of lien on the money garnisheed would be determined on the garnishment hearing. After a hearing on the garnishment proceedings, the court ordered them dismissed and entered judgment accordingly.

From these proceedings, the plaintiff perfected two appeals, one from the judgment in the main action, the other from the judgment dismissing the garnishment proceedings. The two appeals are argued in the briefs and submitted together. We will so consider and dispose of them.

On the main action, it is the claim of the plaintiff that the trial court should have applied the money on general deposit in the plaintiff bank on the note. Having refused to so order, the judgment of the trial court is assigned as error.

[1] The action of the plaintiff is the ordinary one on a promissory note. No claim to the right of set-off or application of payment is alleged. There is no evidence that the plaintiff bank attempted to apply the money on deposit to the payment of the note. But there is no warrant for it in the law. The Bankers' Lien Law, section 6868, C. L. 1913, was repealed by chapter 176 of the 1919 Session Laws.

Chapter 139 of the 1923 Session Laws changed the rule announced in Shuman v. Citizens' State Bank, 27 N. D. 599, 147 N. W. 388, L. R. A. 1915A, 728, unless the deposit is applied in payment of the debt through “legal process,” or with “the consent of the depositor.” The first section of that chapter provides:

“It shall be unlawful for any bank, or trust company, with which money has been deposited, to charge against the deposit any claim of such bank or trust company or any other person, or to appropriate the same to the payment of any debt to such bank or trust company or any other person, without legal process or without the consent of the depositor.”

Recognizing since the enactment of chapter 139, supra, that a bank cannot charge against the deposit a debt due it from the depositor, or appropriate the deposit for the purpose of paying a debt without “legal process,” the plaintiff caused garnishment proceedings to issue, and garnisheed itself.

[2] This, then, brings us to the second point: Can the plaintiff garnishee itself? There is considerable conflict among the authorities on this subject. Rood, in his work on Garnishment, § 39, is of the opinion that a plaintiff may summon himself as garnishee. He cites and relies upon several English cases, and cases from some of the states, following the English rule. The English cases grew out of a custom prevailing in London whereby a plaintiff could issue a foreign attachment, and levy upon a debt due by him to the defendant. In those cases the attachment was allowed in cases of nonresidence.

One of the earliest cases, and probably the leading case on the subject, is Graighle v. Notnagle, Pet. C. C. 245, Fed. Cas. No. 5,679. That court followed the practice recognized by the English decisions, and, while Justice Washington was of the opinion that a plaintiff may attach the money in his hands due by him to the defendant, he mentioned that the statute of Pennsylvania recognized that practice. The decisions, with very few exceptions, that permit a plaintiff to garnishee himself, find recognition and support thereof in their respective statutes.

Drake, on Attachment, § 543, admits that:

“By the custom of London, a plaintiff may by garnishment attach, in his own hands, money or goods of the defendant; but [he continues] can a plaintiff charge himself as garnishee in respect of a debt from him to the defendant?”

The author answers the question by asking it. He then proceeds with a discussion of the division of authority in this country.

14 American and English Encyclopedia of Law (2d Ed.) 809, speaking on this subject, says:

“The question has arisen whether the plaintiff may summon himself as garnishee, and thereby reach a debt owing from him to the defendant, and though the decisions in regard to this point are in conflict, it is held by the best...