Int'l Harvester Co. of Am. v. Hanson

Decision Date28 February 1917
Citation161 N.W. 608,36 N.D. 78
PartiesINTERNATIONAL HARVESTER CO. OF AMERICA v. HANSON et al. (COOK et al., Garnishees).
CourtNorth Dakota Supreme Court
OPINION TEXT STARTS HERE
Syllabus by the Court.

A creditor stands in the same position as his debtor with respect to claims against third persons in garnishment proceedings. No recovery can be had at the instance of a creditor against such third persons who are garnished, where prior to the garnishment the debtor has disposed of all of his beneficial interest in the claims.

Evidence examined, and found to establish that garnishees were not, at the time of garnishment, liable to the principal defendant in any sum.

Section 6706 of the Compiled Laws of 1913, relating to liens on property not yet acquired or not yet in existence, and containing a proviso that “no lien or mortgage shall be created upon the future earnings of any machine or machinery operated in whole or in part with man or animal,” construed, and held not applicable to an assignment of rights under an existing contract, and that it does not prevent the making of a contract for threshing for the benefit of a third party.

A garnishee's affidavit, denying liability, need not contain evidentiary matter.

Appeal from District Court, Cass County; Chas. J. Pollock, Judge.

Action by the International Harvester Company of America against Benedict Hanson and Dina Hanson, his wife, and others, Albert Cook and others, garnishees. Judgment against garnishees, and defendants Benedict Hanson and Dina Hanson appeal. Reversed.

A. T. Cole, of Fargo, for appellants. Lawrence & Murphy, of Fargo, for respondent.

BIRDZELL, J.

This action was begun by the plaintiff against John Hanson, Julia Hanson, Benedict Hanson, and Dina Hanson, defendants, upon a judgment which had been obtained against them in Clay county, Minn., upon certain promissory notes set out in the complaint. Garnishment summonses were served upon the garnishees Sterling on September 10, 1914, and upon garnishees Moody on September 14, 1914. Jury trial being waived, trial was had before the court in the district court of Cass county, resulting in a judgment by stipulation upon the Minnesota judgment. Separate judgments were entered against the garnishees as follows: Against Robert Sterling in the sum of $175.60, and against A. L. Moody in the sum of $863.05. Appellants Benedict Hanson and Dina Hanson have appealed to this court from the judgments against the garnishees.

In his assignments of error appellants' counsel takes exception to certain of the findings of fact of the trial court and to the conclusions of law drawn from the facts found The questions of fact presented upon this appeal involve, in reality, the sufficiency of the evidence to establish certain conclusions of fact upon which appellants' main proposition of law depends. Briefly stated, the trial court found that, on or about the 3d day of July, 1914, defendant Benedict Hanson went to the State Bank of Gardner (not a party to this action), and made an oral agreement with its managing agent by the terms of which the said Hanson agreed to deliver to the bank the proceeds and earnings of his threshing outfit for the season of 1914, to be applied by the bank, after paying the operating charges, to the payment of indebtedness due and owing by Hanson to the bank in the sum of $1,212.75, nearly all of which was past due; that during the month of August certain moneys earned by Hanson in threshing for the garnishees Moody and Sterling were, in pursuance of the above arrangement and in compliance with written orders therefor, paid by the garnishees to the State Bank of Gardner, and that during the month of August Moody, through his agent, entered into a contract with Benedict Hanson for additional threshing, which was done prior to the 12th day of September following, and prior to the service of the garnishment summons upon Moody; and that thereafter, to wit, on the 15th day of October and on the 16th day of October, Sterling and Moody, respectively, deposited the sums of $137 and $815.85 in the State Bank of Gardner, to the credit of the general account of Benedict Hanson. From these findings of fact the learned trial judge found that the attempted transfer by Hanson to the bank of his interest in the earnings of his threshing rig from the work done for Sterling and Moody was invalid for the reasons: (1) That the assignment was but the assignment of a mere possibility, coupled with no interest, Hanson having no contract with Sterling or Moody at the time of his arrangement with the bank; and (2) for the reason that the attempted transfer was in violation of section 6706 of the Compiled Laws of 1913, providing that:

“No lien or mortgage shall be created on the future earnings of any machine or machinery operated in whole or in part with man or animal.”

Appellants' challenge of the correctness of these two propositions presents the questions upon which this case must be decided.

[1][2] 1. That the transfer was but the assignment of a mere possibility coupled with no interest, Hanson having no contract with Sterling or Moody at the time of his arrangement with the bank. A careful perusal of the record in this case convinces us that the legal sufficiency of Hanson's acts to divest him of his interest in the earnings of his threshing rig for the year 1914 cannot properly be decided by considering alone the transaction between him and the bank early in July, but that we must regard as well the dealings of the parties prior to the service of the garnishment summons. It is a well-established rule of law in this jurisdiction that the liability of a garnishee is to be measured by his responsibility and relation to the defendant, and that the plaintiff cannot, by garnishment, place himself in a position superior to that occupied by the defendant as to the garnishee. Shortridge v. Sturdivant, 32 N. D. 154, 155 N. W. 20;Petrie v. Wyman et al., 159 N. W. 616. The plaintiff in this case was, at the time of the service of the garnishment summons, an unsecured creditor of the principal defendants. The garnishees Moody and Sterling were indebted either to defendant Benedict Hanson or to the State Bank of Gardner on account of work that had been performed by Hanson. If, prior to the garnishment proceedings, arrangements had been made whereby Moody and Sterling had become liable to the bank and these arrangements had been assented to by all parties concerned, save the plaintiffin this case, Hanson had no interest in any of the subsequent payments made by the garnishees to the bank.

The law requires the observance of no particular formality in the assignment of a chose in action. It was competent for Hanson to divest himself of all his interest in the future earnings of the machine without the signing of any order and without the execution of any bill of sale, mortgage, or written instrument of any kind. Roberts v. First National Bank, 8 N. D. 474, 79 N. W. 993. If no assignment were shown and the evidence established that an arrangement was made whereby Hanson was to thresh for Moody and Sterling, and that Moody and Sterling were to pay the amount of the threshing bill to Hanson's creditor, the bank, Hanson retained no interest in the proceeds that could be reached through garnishment by his general creditors. In Shinn on Attachments and Garnishments, we find this clear statement of the law applicable:

“When a garnishee has contracted with the principal debtor that he will pay the money or deliver the property to some third person, then the plaintiff in garnishment cannot recover because he is only placed by the garnishment in the position of the principal defendant, who could not himself recover from the person made the garnishee.” 2 Shinn on Attachments and Garnishments, § 516; Baker and Smith v. Elgin, 11 Or. 333, 8 Pac. 280.

And in a case of this character the assent of the creditor to the terms of the contract made for his benefit is presumed. Rogers v. Gosnell, 58 Mo. 589. We are satisfied from the record and from the law applicable to the facts disclosed, aside from the possible effect of section 6706 of the Compiled Laws of 1913, that the plaintiff stands in no better position in respect to the garnishees than Hanson stood at the time of the service of the garnishment summons upon Moody and Sterling, and that at such time Hanson would have been unable to recover anything from them as against the bank.

The witness Mitchell, cashier of the State Bank of Gardner, and Benedict Hanson are in substantial accord as to the arrangement made in July, as the following extracts from the testimony of Mitchell and Hanson will show. In answer to the query as to business relations between Hanson and the bank, Mitchell testified:

“A. As near as I can remember, he came to me and wanted us to take care of his labor and expenses, threshing expenses, and he was to turn over the money that he received for threshing, or earned for threshing. Q. And anything further? A. Well, as near as I can remember, if there was anything above that it was to be turned in on what he owed us at the time. Q. Was he in debt to you at the time? A. Yes, sir. Q. Can you say about how much he was in your debt? A. Yes, sir. Q. How much? A. $1,212.75. Q. And state whether or not this was prior to the time that he began threshing? A. Yes, sir. Q. Have you had any final settlement with Hanson as yet for the year 1914? A. No, sir.”

And he gave the following testimony upon redirect examination:

“Q. Where was this talk about you furnishing funds, or this talk with him about the threshing? A. In the bank. Q. And what was said in reference to getting the funds; what was said between you and Hanson, and what did Hanson ask you for? A. He asked us to take care of him on his labor and other necessary expenses, threshing expenses. Q. What did you say to him in reference to that? A. Well, I told him we would take care of him under those...

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4 cases
  • State Bank of New Salem v. Schultze
    • United States
    • North Dakota Supreme Court
    • 21 Mayo 1924
    ... ... presumed. Rodgers v. Gosnell, 58 Mo. 589." ... International Harvester Co. v. Hanson, 36 N.D. 84, ... 161 N.W. 608; Hatcher v. Plumley, 38 N.D. 155, 164 ... N.W. 698; ... ...
  • Bronson v. Chambers
    • United States
    • North Dakota Supreme Court
    • 17 Noviembre 1924
    ...Co. v. Lemke, 39 N. D. 37, 166 N. W. 800;Hatcher v. Plumley, 38 N. D. 147, 164 N. W. 698, and cases cited; International Harvester Co. v. Hanson et al., 36 N. D. 78, 761 N. W. 608. On the trial, various witnesses were called on both sides. Chambers himself was a witness. He testified fully ......
  • Ruble v. Nyseth
    • United States
    • North Dakota Supreme Court
    • 31 Diciembre 1931
    ...v. Sturdivant et al., 32 N. D. 154, 155 N. W. 20;Petrie v. Wyman et al., 35 N. D. 126, 159 N. W. 616;International Harvester Co. v. Hanson et al., 36 N. D. 78, 161 N. W. 608. The case was tried on the theory that if the mortgage was valid the mortgagor had a lien upon the proceeds from the ......
  • State v. Riordan
    • United States
    • North Dakota Supreme Court
    • 3 Marzo 1917

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