Heston v. Finley

• Decision Date: 06 June 1925
• Docket Number: 25,958
• Parties: JOHN F. HESTON, Appellee, v. J. L. FINLEY, Appellant
• Court: Kansas Supreme Court

236 P. 841

118 Kan. 717

JOHN F. HESTON, Appellee, v. J. L. FINLEY, Appellant

No. 25,958

Supreme Court of Kansas

June 6, 1925

Decided January, 1925.

Appeal from Sherman district court; CHARLES I. SPARKS, judge.

Judgment reversed and cause remanded.

SYLLABUS

SYLLABUS BY THE COURT.

1. VENUE--Action in Personam--Residence of Parties. An action in personam and for equitable relief, other than for the adjudication of interests in real property, can only be commenced in a county where the defendant resides or can be summoned.

2. PROPERTY--Money Judgment--Situs. A money judgment is a form of intangible personal property, the situs of which is the domicile of the assignee of the judgment.

3. JUDGMENTS -- Set-off -- How Governed. The setting off of judgments is governed by equitable considerations, and such set-offs are not permissible where intervening rights would be prejudiced thereby.

4. SAME--Set-off--Assigned Interest in Judgment. Where defendant's client obtained a judgment against plaintiff in Kansas, and plaintiff later obtained a judgment against defendant's client in Colorado, and defendant acquired a lien on the Kansas judgment and later an assignment of his client's interest in that judgment before plaintiff effectively commenced proceedings to set off his Colorado judgment against the Kansas judgment, the rights of defendant in the Kansas judgment do not yield to plaintiff's subsequent demand that his Colorado judgment be set off against the Kansas judgment, and defendant's right to realize on the Kansas judgment duly assigned to him may not be interfered with by injunction at the instance of the Colorado judgment creditor.

5. SAME--Merger of Lien and Assignment--Election of Holder. When the holder of a bona fide lien on a judgment afterwards acquires all the remaining interest of the judgment creditor by assignment, the holder's rights as lienee and as assignee do not necessarily merge, as the matter is governed by the interest and unconstrained election of the holder, and the lien and assignment cannot be regarded as merged to his prejudice by judicial decree.

E. F Murphy, and E. E. Euwer, both of Goodland, for the appellant; T. F. Garver, of Topeka, of counsel.

George D. Freeze, and T. E. Stewart, both of Goodland, for the appellee.

OPINION

DAWSON, J.:

This was an action in the nature of a creditor's bill to set off a Colorado judgment against a Kansas judgment and to enjoin the lienee and assignee of the Kansas judgment from attempting to enforce it, and for other relief.

A brief statement of the earlier litigation will develop the points involved herein:

On July 15, 1921, a judgment was entered in the district court of Sherman county, Kansas, in favor of Albert Chaplin against John F. Heston, for $ 699.20. The defendant in the present case, J. L. Finley, a lawyer of St. Francis, Cheyenne county, was attorney for Chaplin in the Sherman county litigation. On October 26, 1921, Finley filed notice of an attorney's lien upon the Sherman county judgment, service being made on Heston's attorneys. The amount of the lien claimed was $ 451.

On May 24, 1922, Heston recovered judgment against Chaplin for $ 3,658 in the district court of Elbert county, Colorado. This defendant Finley acted as attorney for Chaplin in the Colorado litigation, and on June 9, 1922, in payment for his services and expenses therein, Chaplin assigned to Finley his remaining interest in the Sherman county judgment. This assignment was recorded in the Sherman county district court on June 22, 1922, and on July 3, 1922, Finley obtained an order of court substituting him as judgment creditor in lieu of Chaplin.

Soon after obtaining judgment in Sherman county, Kansas, against Heston, Chaplin became a resident of Colorado, and after Heston obtained his Colorado judgment against Chaplin some sort of proceeding was instituted in Sherman county to have the Colorado judgment set off against the Kansas judgment. The appellee's brief says that proceeding "was not successful on account of the assignment to said Finley of the Kansas judgment having been made prior to its commencement." Later Finley set about the matter of realizing on the Kansas judgment, and to that end he got out executions and instituted garnishments against debtors of Heston; and in an attempt to frustrate such proceedings this action in Sherman county was begun.

Finley first made a special appearance, showing he was a resident of Cheyenne county, and challenged the jurisdiction of the court. This being overruled, he reserved his objection to the jurisdiction and filed an appropriate demurrer to the petition. This also being overruled, Finley answered, renewing his objection to the jurisdiction, challenged the sufficiency of the petition as if by demurrer, and set up in detail all the facts upon which his lien on the Kansas judgment was perfected and the subsequent assignment of Chaplin's interest in it to him.

The oral testimony and documentary proof developed no particular dispute over the facts, and the trial court dictated an opinion which may be regarded as informal findings of fact and conclusions of law, and gave judgment for plaintiff, in part as follows:

"The attorney's lien was made and attempted to be made a part of the record prior to the time when the assignment was taken by the defendant in this case. An assignment was made, and in accordance with the terms thereof defendant purported to become the entire owner of the judgment, for it is provided in said assignment 'that all rights, title and judgment in and to the judgment obtained in the above-entitled case is sold, assigned and transferred to J. L. Finley'; that being the case, as far as the defendant's interests are concerned, he became the owner of the judgment, and could not have a lien at that time on his own judgment, because he was the owner thereof, no more than one who holds a mortgage on real estate can, after acquiring the title thereto by warranty deed, still hold a lien thereon while enforcing rights under his warranty deed, because the titles are merged into the larger and greater title, represented by such warranty deed. So it is here, and the attorney's lien, whatever the force it had, became absorbed and entirely erased by the assignment of the entire judgment itself, and no longer possessed any right to an enforcement thereof, because the two matters are inconsistent with each other and cannot both be relied upon, for the lien is antagonistic and contrary to the other, and, as the assignment is the last act, it is superior to and supersedes the attorney's lien itself. . . .

"And the court further finds that the judgment in Colorado . . . in the case of J. F. Heston against Albert Chaplin . . . should be allowed as offset on said Kansas judgment to the amount of $ 824.51.

"The court further finds that the said defendant should be permanently enjoined in this action from further proceedings towards the collection of a case of Albert Chaplin against John F. Heston, . . . either as assignee of judgment or attorney for Albert Chaplin, or upon his attorney's lien filed in said case of Chaplin v. Heston. . . .

"It is therefore by the court considered, ordered and adjudged, that the said Colorado judgment of J. F. Heston against Albert Chaplin be and the same is hereby offset against the Kansas judgment of Albert Chaplin against John F. Heston to the amount of $ 824.51, the present amount of said Kansas judgment.

"It is further ordered and adjudged that the attorney's lien of said defendant, J. L. Finley, has been abandoned by him, and the same is hereby held to be absorbed and merged in the assignment made by Albert Chaplin to J. L. Finley, assigning to said J. L. Finley, defendant, all the right, title and interest of said Albert Chaplin in and to the said judgment rendered in the case of Chaplain v. Heston, . . .

"It is further ordered and adjudged that the said assignment be set aside and held for naught.

"It is further ordered, adjudged and decreed that the temporary restraining order or injunction, heretofore allowed, become permanent, and said defendant, J. L. Finley, is forever restrained and enjoined from proceeding further towards the collection of said judgment, entitled Albert Chaplin against John F. Heston, . . . or from further proceeding under his said assignment or from further proceeding under his said attorney's lien on said judgment."

Defendant appeals, assigning various errors, some of which are serious.

And first as to the question of jurisdiction: Finley was a resident of Cheyenne county. This action was for equitable relief and the judgment obtained was in personam. An action of that nature and to procure a judgment responsive thereto, except to adjudicate interests in real...