Marx v. Parker

• Decision Date: 06 August 1894
• Parties: MARX ET AL. v. PARKER ET AL. [1]
• Court: Washington Supreme Court

37 P. 675

9 Wash. 473

MARX ET AL. v. PARKER ET AL. ^[1]

Supreme Court of Washington

August 6, 1894

Appeal from superior court, Whatcom county; John R. Winn, Judge.

Action by Daniel Marx and E. C. Jorgenson, copartners, against W. S Parker, city marshal, and the First National Bank of Fairhaven, garnishee, to subject deposits of city funds to the payment of a judgment against W. S. Parker. Judgment for plaintiffs, and defendants appeal. Reversed.

Albert Sherman, City Atty., and Kerr & McCord, for appellants.

Alexander & Alexander, for respondents.

STILES J.

Marx &amp Jorgenson, having obtained a judgment for money against W. S Parker, summoned the First National Bank of Fairhaven as a garnishee. The bank answered that it had an account with Parker as a depositor, wherein he was credited with $845.14 but it alleged that the money deposited was money of the city of Fairhaven, which Parker, as marshal of that city, had collected in his official capacity, and this fact, at the hearing, it established to a moral certainty. The account was kept in the individual name of Parker, but it was understood that none but city money would be deposited in that account, and that none but checks in favor of the city treasurer would be drawn against it. Still, it was in no sense a special deposit, but the money was used by the bank for its own purposes, with the understanding that it would be required at the expiration of each month, when the statute required the marshal to settle with the treasurer. Gen. St. § 655.

It was error for the court, of its own motion, to require the city of Fairhaven to appear as an intervener. It would have neither gained nor lost by the result of the proceeding. Horn v. Volcano, etc., Co., 13 Cal. 62. It was a proper case for an interpleader on the motion of the bank, under Code Proc. § 156, but no such motion was made. Therefore the city must go out of the case, in any event. The disposition of this case depends upon the settlement of two questions: (1) What were the rights of respondents as plaintiffs in the garnishment proceeding? (2) What relation did Parker, as marshal, bear to the city of Fairhaven touching the money collected by him and deposited with the bank?

1. It is a general rule in garnishment that the plaintiff can obtain no greater beneficial relief against the garnishee than the judgment debtor would be entitled to, and that if the debtor's recovery would be limited to a mere legal title, without beneficial interest or right of enjoyment in himself, the proceeding must fail. A judgment creditor cannot have his debt satisfied out of property held in trust for another, no matter how completely his debtor may have exercised apparent ownership over it, unless it was upon the faith of such ownership that the credit was given. Wade, Attachm. § 416; Morrill v. Raymond, 28 Kan. 415; Bank v. King, 57 Pa. St. 202. Therefore, if the deposit in the bank was, in equity, the property of the city, although it stood in Parker's name, respondents had no right to a judgment against the garnishee.

2. The respondents present several propositions, supported by authority, to the effect that a custodian of public funds who is required by law to give a bond for the proper disposition of the moneys coming to his hands, is not a mere bailee, but is a debtor; and the argument is drawn therefrom that the money which he receives is his, and can be applied to the payment of his debts. The general rule is conceded to be that an agent can under no circumstances so deal with his principal's property or money that the former cannot, as against him, follow and recover it, or its proceeds, whatever shape he may have caused it to take; and all persons into whose hands the principal's property or its proceeds may come, with notice of its character, are likewise responsible to him in a proper action. National Bank v. Insurance Co., 104 U.S. 54; Bank v. King, supra; Van Alen v. Bank, 52 N.Y. 1; Overseers of the Poor v. Bank of Virginia, 2 Grat. 544; Meadowcroft v. Agnew, 89 Ill. 472. Now, a collector or treasurer of a municipal corporation, without bond and without statutory obligations, would at common law be a mere bailee, and the rules governing bailments would apply to him the same as any other agent; but it is universal that such officers are required to give bonds, and that statutes govern their liability, and out of this fact have grown many cases which seem at first glance to sustain the view that they are debtors, and not bailees, and that the money they receive is their own. In Inhabitants of Colerain v. Bell, 9 Metc. (Mass.) 499, it was said: "The specific money received by a collector, in the collection of taxes, is his money, and not that of the town." In Inhabitants of Hancock v. Hazzard, 12 Cush. 112, the court, speaking of a collector of taxes, said: "His obligation is not regulated by the law of bailments, and the cases cited to that effect are not applicable. He is a debtor, an accountant." In Egremont v. Benjamin, 125 Mass. 15, concerning a town treasurer, the expression was used: "He was not a bailee of the moneys received, but an accountant." Halbert v. State, 22 Ind. 125, declared it to be well established that a public officer required to give bond for the proper payment of moneys coming into his hands officially is not a mere bailee of the money. Rock v. Stinger, 36 Ind. 346, held that the technical legal title to money in the hands of a township trustee was in himself, and that a loan of such money did not constitute an illegal transaction; and so, in Shelton v. State, 53 Ind. 331, it was ruled that there could be no recovery against a county treasurer for interest received by him on deposits of county funds in a bank, because the money received by him became his own money. This case notes the absence of statutory provisions, which will be spoken of hereafter. Perley v. Muskegon County, 32 Mich. 131, contains an elaborate review of the subject in an action for money had and received against third persons alleged to have received and used money furnished by a county treasurer out of county moneys in his hands, and it was held that the officer was not a bailee merely, and that the action brought would not lie; yet the opinion strongly intimates that an action on the case or a bill in equity might be sustained. So far has the argument drawn from these cases been carried that in State v. Keim, 8 Neb. 63, it was held that the state could not recover money deposited by its treasurer in a bank, on the ground that it was a loan of money prohibited by statute, and not the result of a conspiracy to obtain public money;...