Northfield Knife Co. v. Sharpleigh

• Decision Date: 17 October 1888
• Parties: NORTHFIELD KNIFE CO. ET AL. v. SHARPLEIGH ET AL.
• Court: Nebraska Supreme Court

24 Neb. 635

39 N.W. 788

NORTHFIELD KNIFE CO. ET AL.

v.SHARPLEIGH ET AL.

Supreme Court of Nebraska.

October 17, 1888.

Syllabus by the Court.

Proceedings in garnishment bind the garnishee from the time of the service of the notice, and the property in his hands is not thereafter subject to levy and sale on process thereafter issued against the debtor, during the continuance of the attachment.

Where a number of attachments have been issued against a debtor, and notices of garnishment served upon a garnishee, and certain other creditors thereafter obtain separate judgments against the debtor, and proceed to levy executions upon the goods in the hands of the garnishee, the attaching creditors in an action to determine the priority of liens and for an injunction may enjoin the defendants from selling under their executions until the final determination of the case.

Where a garnishee abandons the property of the debtor in his hands after the notice was served, the court may appoint a suitable person to take charge of and, if necessary, dispose of such property.

Error to district court, Cass county; CHAPMAN, Judge.W. L. Brown and S. P. Vanatta, for plaintiffs in error.

M. A. Hartigan and R. B. Windham, for defendants in error.

MAXWELL, J.

This action was brought by the plaintiffs in the district court of Cass county to restrain the defendants from selling certain goods of one John S. Duke, upon execution. It is alleged in the petition that on or about December 20, 1887, the several plaintiffs had begun suits in said court against one John S. Duke, a hardware merchant in said county, and had sued out orders of attachment on the stock of goods then owned by said Duke; that when an attempt was made to levy said attachments, plaintiff therein learned that said Duke was not in possession of the goods, but that Sherman S. Jewett & Co., by their agent, W. S. Wise, had the actual and manual possession thereof, and the attachments were not levied, but that, on further showing, the plaintiffs sued out garnishee process against said Wise, and had the same served on said garnishee and Duke; that said Wise proceeded to answer said garnishee process, and did appear in the district court of Cass county on the 16th day of January, 1888, and answered in said cause; that he held said stock of goods under a chattel mortgage securing $800, and that the invoiced and appraised value of said stock was about $4,000; that the defendants and others did obtain judgments in the county court of Cass county, Neb., in the several sums due from said Duke, and did sue out executions on said judgments, and caused the same to be placed in the hands of M. McElwain, constable, who levied the same on the unsold portion of said stock of goods. There is also an allegation that the garnishee is about to abandon or has abandoned the care of the property. The prayer is for a decree adjusting the priority of the liens, and to enjoin the defendants from selling said property in satisfaction of the executions in their hands until the liens of the plaintiffs are satisfied, and for the appointment of a receiver.

The defendants demurred to the petition, upon the ground that the court had no jurisdiction; that the facts stated in the petition did not constitute a cause of action; and that there was a misjoinder of parties plaintiff and defendant. The demurrer was overruled, and, the defendants electing to stand on their demurrer, judgment was entered as prayed in the petition.

Three questions are presented by the record. (1) Whether service of a notice upon a garnishee creates a lien on the goods of the debtor in his hands. (2) Whether an action in equity can be maintained to determine the priority of liens, and for an injunction, till the final hearing. (3) The authority of the court to appoint a person to take charge of goods which a garnishee declines to retain in his hands.

In Mathews v. Smith, 13 Neb. 179, 12 N. W. Rep. 821, and Reed v. Fletcher, ante, 437, it was held that, upon service of a notice on a garnishee, it created a trust in the property in his possession. Hence, to entitle the creditor to serve notice upon the garnishee, the property or credits must be within the jurisdiction of the court. Therefore, if a non-resident of the state should come into it for a mere temporary purpose, but have no property of the debtor in his hands in the state, he would not be liable as garnishee. Baxter v. Vincent, 6 Vt. 614;Ray v. Underwood, 3 Pick. 302;Wright v....