Florida East Coast Ry. Co. v. Consolidated Engineering Co.

• Decision Date: 30 January 1928
• Citation: 116 So. 19,95 Fla. 99
• Parties: FLORIDA EAST COAST RY. CO. v. CONSOLIDATED ENGINEERING CO. et al.
• Court: Florida Supreme Court

116 So. 19

95 Fla. 99

FLORIDA EAST COAST RY. CO. v. CONSOLIDATED ENGINEERING CO. et al.

Florida Supreme Court, Division B.

January 30, 1928

Suit by the Florida East Coast Railway Company against the Consolidated Engineering Company and another for an injunction and other relief. From a decree dissolving a temporary restraining order and dismissing bill, the complainant appeals.

Affirmed.

Syllabus by the Court

SYLLABUS

Garnishment begun and answer filed admitting indebtedness over four months before filing petition in bankruptcy held good against defendant's trustee in bankruptcy (Rev. Gen. St. 1920, § 3436; Bankr. Act § 67f [11 USCA § 107]). When an action is begun and a writ of garnishment is served, and the garnishee answers, admitting an indebtedness to the defendant in excess of plaintiff's demand in the action, all more than four months prior to the filing of a petition in bankruptcy for the defendant, and being duly prosecuted, the action results in a judgment against the garnishee and also against the defendant, the trustee in bankruptcy is not entitled to the funds covered by the garnishment, though the judgment was rendered within four months prior to the filing of the petition in bankruptcy.

Appeal from Circuit Court, Duval County; Daniel A Simmons, judge.

COUNSEL

Robert H. Anderson, of Jacksonville, for appellant.

E. T McIlvaine, of Miami, for appellees.

OPINION

WHITFIELD P.J.

The bill of complaint herein brought by the Florida East Coast Railway Company in effect alleges that, on December 27, 1923, the Consolidated Engineering Company brought an action of assumpsit in the common courts in the civil court of record in Duval county against W. P. Richardson, trading as W. P. Richardson & Company, for $1,015.52, and on the same day caused a writ of garnishment in the action to issue to the Florida East Coast Railway Company, a corporation; that on January 7, 1924, the latter company, answering the writ of garnishment, admitted an indebtedness from it to Richardson in excess of plaintiff's demand in the action; that, on April 21, 1924, the plaintiff recovered judgment against said Richardson and against the Florida East Coast Railway Company as garnishee for $1,056.69, upon which execution issued; that personal property of the Florida East Coast Railway Company, the garnishee, has been levied upon under the execution, and has been advertised for sale; that, within four months after the rendition of the judgment, viz. June 5, 1924, W. P. Richardson was adjudged a bankrupt in the United States District Court; that, at the time of the rendition of said judgment, said Richardson was insolvent, 'by reason whereof the lien of said judgment was annulled and avoided by the operation of the Bankruptcy Act, and it thereupon became null and void'; 'that the trustee in bankruptcy of the estate of said Richardson has failed to take any steps or proceedings to have the lien of said judgment declared to be void judicially, but has advised the complainant that, because said judgment is void, if the complainant pays the same or the amount thereof, he will endeavor to hold this complainant for such amount, notwithstanding it pays the same.'

The prayer is that the sale of the property levied upon under the execution be restrained, and that the lien of the judgment be decreed to be null and void, and the defendants be perpetually enjoined and restrained from collecting, or attempting to collect, the same from this complainant, or from proceeding in any wise under the execution issued pursuant thereto, and that the complainant may have such other and further relief as in equity it is entitled to receive.

A temporary restraining order was granted, but subsequently the injunction was dissolved, and the bill was dismissed on demurrer. Complainant appealed.

Under the federal statute, 1 Fed. Ann. (2d Ed.) 1130 (11 USCA § 107, subd. [f]), 'all levies, judgments, attachments, or other liens, obtained through legal proceedings against a person who is insolvent, at any time within four months prior to the filing of a petition in bankruptcy against him, shall be decreed null and void in case he is adjudged a bankrupt,' etc.

While this court has said that 'a garnishment creates no lien in the plaintiff's favor,' it also said in the same case that 'the plaintiff secures by the garnishment the right to have the debt owed by the garnishee to the defendant, paid by the garnishee upon the plaintiff's judgment against the defendant instead of to him'; and that, whether the plaintiff in garnishment has a legal or equitable lien, or an inchoate lien or right to be subrogated to the defendant's claim against the garnishee, it is a substantial right. Pleasant Valley Farms v. Carl, 90 Fla. 420, 106 So. 427. See section 3436, Rev. Gen. Stats. 1920.

If the garnishment had been dissolved as in Pleasant Valley Farms v. Carl, 90 Fla. 420, 106 So. 427, or...