Geo. M. Howe & Co. v. Jones
| Decision Date | 25 October 1881 |
| Citation | 8 N.W. 451,57 Iowa 130 |
| Parties | HOWE & CO. v. JONES ET AL |
| Court | Iowa Supreme Court |
Appeal from Marshall District Court.
ACTION in chancery. There was a decree granting the relief prayed for in plaintiff's petition. The intervenors, S. Binford & Caswell and Meeker, appeal. The facts of the case appear in the opinion.
REVERSED.
Caswell & Meeker, for appellants.
Brown & Binford and Boardman & Carney, for appellees.
I.
In an action between Binford and others, plaintiffs, and Boardman and others, defendants, in the Marshall District Court, a decree was rendered requiring defendant Boardman, to deliver certain notes held by him as collaterals, to plaintiffs. Upon appeal to this court, the decree of the District Court was affirmed September 20, 1876. The further facts and proceedings in the action need not be stated, as they cut no figure in this case.
On the 9th day of April, 1877, the plaintiffs, being two mercantile firms, filed their petition in this case, showing the judgment and the proceedings in the action above referred to and alleging that Boardman had delivered to the clerk of the court the notes involved in the former action, and required to be delivered to plaintiffs therein, and has also paid to the clerk certain moneys and costs provided for by the decree in that case, and that the clerk is about to pay over the notes and money to the plaintiffs in the former action, or to other parties not entitled thereto. It is also shown that after the decision of the former action in the Supreme Court, the plaintiffs caused Boardman to be garnished upon certain judgments before recovered by plaintiffs separately in the District Court of Marshall county, who answered, stating that he had in his possession the notes in question, which he was about to deliver to the clerk of the court. It appears that subsequently to this garnishment of Boardman, he delivered the notes to the clerk, as shown by the petition.
The petition further shows that many of the notes are worthless and those that are good must be collected by proceedings at law. It is alleged that plaintiffs have demanded the notes of the clerk, who refuses to deliver them unless ordered by the court. The petition prays that a receiver be appointed, and that he qualify by giving bond in the sum of $ 3,000; that the clerk be required to deliver to him the notes, which the receiver shall proceed to collect, and that upon the final hearing the plaintiffs be adjudged to be the owner thereof.
After the petition was filed, the plaintiffs herein, who are also plaintiffs in the garnishee proceedings against Boardman, under Code, section 2861, agreed to and caused to be entered a judgment in that proceeding, wherein Boardman was ordered to deliver to the clerk of the court the notes and money in his hands, to be held by the clerk or receiver, subject to the further orders of the court, and it was adjudged that upon his compliance with the order, Boardman should be discharged as garnishee. It is shown, that prior to this judgment, the notes and moneys in question were turned over to the clerk, a part thereof upon the day of the filing of the petition in this case, and a part soon after.
On the 10th day of April, the day after the petition was filed, the judge of the District Court at chambers appointed Boardman receiver, pursuant to the prayer of the petition, and it appears that immediately thereafter, the clerk re-delivered the notes and moneys to Boardman, as receiver. No notice of the application for the appointment of a receiver was given to the parties adversely interested.
During the first term, after this action was commenced, Samuel Binford filed his petition in intervention, alleging that Binford & Brother, plaintiffs in the original action, assigned to him on the 28th day of April, 1875, the notes and moneys in controversy, and the judgment rendered against Boardman. It is shown that the consideration of this assignment was the reimbursement of the intervenor for whatever amount he had paid or should be required to pay upon a note given by Binford & Bro., upon which he was surety. This assignment, the intervenor alleges in his petition, was to be subject to the claim of the attorneys in the original suit for the services rendered therein. It is alleged that the intervenor had paid $ 600 upon the note upon which he was surety as aforesaid. He asks that he may be allowed to intervene in this proceeding, and that his interest in the judgment and notes be declared superior to plaintiffs' claim, and subject only to the claim of the attorneys for services in the original action.
Caswell & Meeker also filed a petition of intervention, showing that they were the attorneys of Binford & Bro. in the original action, and rendered services therein of great value; that they filed liens upon the judgment for their services; and that in June, 1876, by an oral agreement Binford & Bro. transferred and assigned to them $ 1,000 of the judgment, or of the collectible notes which Boardman was to turn over under the judgment to secure intervenors for services rendered and to be rendered in the litigation between Binford & Bro. and Boardman. It was agreed that, if the fees of the intervenors should prove to be worth less than $ 1,000, they should repay to Binford & Bro. the difference between their value and $ 1,000. They ask that their interest in and claim to the notes be enforced by proper judgment.
Binford & Bro. also filed a petition of intervention. It need not be further noticed, as they do not unite in the appeal.
All of these intervenors united in a motion to discharge the receiver, upon the ground that the order appointing him was made upon insufficient showing, and without notice to the parties having adverse interest to the plaintiffs in this action; that the receiver is an improper person to receive the appointment; and for other reasons that need not be here stated.
It will be observed that the intervenors, Samuel Binford, and Caswell & Meeker, between whom there is no conflict, claim an interest in the money and notes involved in this action under certain transfers and assignments set out in the pleadings. The plaintiffs claim the same property under the garnishment process against Boardman, and they further claim that the property is lawfully in the hands of the receiver for their benefit. The notes and money have never reached the hands of plaintiffs, but are now in the hands of Boardman as receiver.
II. We will consider first the claim and interest which plaintiffs have in the property. It will be readily seen that their claim is based wholly upon the garnishee proceedings. Boardman had possession of the property which the court declared in the original proceeding belonged to Binford & Bro., and ordered it to be returned to them. Boardman answered that he had the property in possession. It was by him turned over to the clerk, and by an agreed judgment he was discharged as garnishee. This was all proper enough, for surely the garnishee could be discharged upon surrendering the property to the custody of the law. For this the agreed judgment provides. It also declares that the property shall be subject to the further order of the court. Now the service of the garnishment, the answer of Boardman, and the judgment, did not determine the right of plaintiffs to the property as against the intervenors or others. The proceedings, up to and including the judgment, had no other effect than to seize the property in the hands of Boardman and transfer it to the custody of the law. There was no adjudication that plaintiffs should take the avails of the property. On the contrary, the judgment provides that it is to be held subject to further orders of the court, which plainly means that all rights thereto are to be settled by further adjudication in the case.
This certainly was the understanding of plaintiffs, for when they found it in the hands of the clerk, they did not seek to gain possession of it by any process or proceeding, but filed the petition in this case asking for the appointment of a receiver, who shall have power to collect the notes, and praying that upon the final hearing plaintiffs may be adjudged to be the owners of the notes. The notes and money were delivered to the receiver, in whose hands they now are. Now, until the decision of this case in the court below, there was no adjudication that the plaintiffs were entitled under the garnishee proceedings to the property. When the intervenors filed their petition plaintiffs had acquired no right by adjudication to the property. At that time they and plaintiffs stood on equal grounds before the court, pressing their respective interests and claims in and to the property.
If the property at that time had been lawfully assigned and transferred to the intervenors they will hold it, for the plaintiffs can only acquire the title and interest held by the defendants in the action wherein the garnishee process was issued. Thomas v. Hillhouse, 17 Iowa 67; Manny & Co. v. Adams, 32 Iowa 165.
Code section 3016, provides as follows: ...
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