Hamilton Nat. Bank v. Woods

• Decision Date: 17 September 1948
• Citation: 34 Tenn.App. 360,238 S.W.2d 109
• Parties: HAMILTON NAT. BANK v. WOODS et al.
• Court: Tennessee Court of Appeals

Page 109

238 S.W.2d 109

34 Tenn.App. 360

HAMILTON NAT. BANK v. WOODS et al.

Court of Appeals of Tennessee, Eastern Section.

Sept. 17, 1948 Certiorari Denied by Supreme Court Jan. 25, 1949.

W. L. Tillett, Chattanooga, for plaintiff in error.

Wilkerson & Wilkerson, J. F. Atchley, Chattanooga, for defendants in error.

GOODMAN, Judge.

This controversy is somewhat of a sequel to the case of Maribelle Woods v Hamilton National Bank, which was considered upon appeal by this court at the September term, 1946, wherein, in an opinion by Judge Hale, entered November 13, 1946, this court, in substance, held that a note purchased by the complainant had previously been paid and extinguished under the Negotiable Instruments Law, Code, § 7325 et seq. and, therefore, did not furnish basis for the assertion of the vendor's lien upon the property of her mother and father originally securing the same.

The present case involves a garnishment served upon Chandler King from a judgment in the sum of $4,060 obtained by the Hamilton National Bank against M. S. Woods and wife, Mary G. Woods. The answer of the garnishee, Chandler King, is of the gravaman of the present suit and, in view of its materiality, is quoted as follows:

'This defendant is not and was not at the date of the service of the writ of garnishment upon him indebted to M. S. Woods in any amount.

'This defendant shows that he is the president and general manager of the Braser Company, a Tennessee corporation, and that prior to the incorporation of the Braser Company this defendant operated said business as trustee for the benefit of his minor children and, after the death of his minor children, for the benefit of himself. Defendant shows that said defendant M. S. Woods was and has been for a number of years employed by the Braser Company as a salesman and during the course of his employment he has become indebted to the said Braser Company for advances against him commissions in an amount varying between $700.00 and $1000.00. Defendant shows that some time prior to the year 1944 the said M. S. Woods delivered to this defendant a note dated November 1, 1933 in the principal sum of $1500.00 signed by M. S. Woods and wife Mary Woods, payable to P. A. Smith and endorsed without recourse by the said P. A. Smith, said note being secured by a vendor's lien and a deed of trust on certain real estate in Hamilton County, Tennessee, described as being Lot No. 10, Block No. 46, James Addition to Highland Park, in said County. Said note was delivered to this defendant, Chandler King, by the said M. S. Woods as additional security for the payment of the indebtedness of the said M. S. Woods to the Braser Company.

'Defendant avers that some time thereafter, to wit, on or about October 12, 1944, said note was purchased from this defendant by Maribelle Woods, the daughter of the said M. S. Woods, for $1500.00. The purchase price was paid to this defendant by check signed by the said Maribelle Woods in the sum of $1500.00 and said check was cashed and deposited to the defendant's personal account. Defendant was advised and believes that said sale of said note to the said Maribelle Woods was a bonafide sale and that this defendant is entitled to said $1500.00 and that the said M. S. Woods is not entitled to any part of said $1500.00. Defendant is advised, however, that this transaction has been the subject of litigation between the said Maribelle Woods and the Hamilton National Bank in cause No. 29229 in the Chancery Court of Hamilton County, Tennessee and that by final decree entered in said cause this Court has adjudged that said $1500.00 note had been paid and satisfied prior to the time of its purchase from this defendant by the said Maribelle Woods. This defendant is not fully informed as to whether the $1500.00 representing the purchase price of said note legally belongs to this defendant, whether it belongs to the said Maribelle Woods or whether the said M. S. Woods has any legal or equitable claim to any part of said money.

'Wherefore, this defendant submits the facts to the court for its judgment thereon as to whether he is indebted to or has in his possession or control any choses in action or other legal or equitable interest to which the said M. S. Woods may be entitled.'

This answer was filed on August 18, 1947, and on the same date (order nunc pro tunc), the Circuit Judge held that the plaintiff, Hamilton National Bank, was entitled to have and recover of the garnishee the sum of $777.13, the same being the difference between the amount of M. S. Woods' indebtedness to Chandler King at the time, and the sum of $1500 which had been paid to the latter by Maribelle Woods. On August 20, 1947, a motion was made by Wilkerson & Wilkerson, attorneys for the defendants in the suit in which the judgment upon which said garnishment was issued was entered, to set aside and vacate said judgment against Chandler King, garnishee, and to grant a new trial. This motion was supported by the affidavit of W. E. Wilkerson, who, in substance, deposed that M. S. Woods was then out of the State, and that upon an examination of the Chancery Court proceedings, and to the best of his knowledge, information and belief, the $1,500 paid to King was paid out of the personal funds of Maribelle Woods and that M. S. Woods did not provide or contribute any part thereof. On August 22, 1947, a motion was made on behalf of Maribelle Woods, likewise then absent from the State of Tennessee, by J. F. Atchley, her attorney in the case of Maribelle Woods v. Hamilton National Bank, aforementioned, to be allowed to intervene by petition in the cause. The same was subsequently amended in open court so as to move the court to set aside the judgment. This motion was supported by the affidavit of J. F. Atchley, in substance and effect, that, according to affiant's advice, the judgment rendered was against funds in the hands of Chandler King, belonging to Maribelle Woods. There motions came on to be heard on August 25, 1947 (order nunc pro tunc), and, upon consideration thereof, the court continued the same to the next term of the Circuit Court of Hamilton County, the same to be heard on September 22, 1947; the order of the court providing that '* * * said Maribelle Woods may file an intervening petition in this case as sought in her motion subject to legal exceptions * * *'. On September 20, 1947, the petitioner, Maribelle Woods, filed her petition setting forth the fact of her purchase of the note from Chandler King for $1,500, the final decision in the Chancery Court case, afore referred to, that said note had been paid off by the makers prior to transfer, and asserting the right to be reimbursed out of the funds held by Chandler King in the amount of the note, or at least for the sum of $777.73 which the court had previously adjudged as belonging to the Hamilton National Bank. She sought, as relief, the vacation of the judgment theretofore rendered and a new trial. The Hamilton National Bank filed answer to the intervening petition, denying the material averments thereof and specifically pleading estoppel, laches notice and fraud. The legal sufficiency of the petition was challenged as was petitioner's right to intervene.

The case was set for hearing on October 6, 1947, upon oral testimony and the various exhibits filed thereto, whereupon the court took the case under advisement, rendering an opinion on November 10, 1947. The Circuit Judge found in favor of the petitioner, Maribelle Woods, ordered the judgment theretofore entered set aside, and directed payment to her of said sum of $777.13. The Hamilton National Bank thereupon seasonably filed a motion for a new trial which was overruled and an appeal in the nature of a writ of error was prayed and perfected to this court. Thus we find the state of the pleadings and proceedings as they come to us for consideration.

For initial determination is the question of petitioner's right to intervene. In our opinion, under the practice in this State, intervention, by a third party demonstrating an interest in the subject matter, will be permitted upon petition seasonably filed; or even after judgment, provided the rights of the original litigants are not injuriously affected, the court still retains jurisdiction over the judgment and subject matter, 47 C.J. pp. 110, 111, and good and sufficient cause is shown for the delay. This is in accord with the principles of Equity (Gibson, Sec. 794 et seq.) and there is no reason why the same should not be applicable in a proceeding such as this Particularly is this true where a garnishee files answer in the nature of an interpleader in a court of law.

Plaintiff-in-error challenges petitioner's right to intervene on the grounds that the latter has no interest in the subject matter and that no specific property is involved. Cited in support thereof is Section 8623 of the Code of Tennessee which provides 'In actions for the recovery of property, any person not a party thereto, on showing himself interested in the subject-matter of the suit, may be allowed to appear as defendant therein.'

In Marlin v. Merrill, 25 Tenn.App. 328, 156 S.W.2d 814, 819, on petition to rehear, this court (Middle Section) in an opinion by Judge Felts, said, 'To enable one to intervene under this section, he must show himself 'interested in the subject-matter of the suit.' He must have an interest in the property itself, a title to it, a lien on it, or a right to its possession. Without such an interest in the property, he cannot come in under this statute. Haynes v. Rizer, 82 Tenn. 246; Stretch v. Stretch, 2 Tenn. Ch., 140. That one as a creditor might have a right to attach the property, or to reduce his debt to judgment and have execution levied on the property, is not enough to entitle him to intervene under this statute.' This is the principal case relied upon on behalf of plaintiff-in-error on this proposition. And we consider the...