Petrie v. Wyman

Decision Date14 September 1916
Citation159 N.W. 616,35 N.D. 126
CourtNorth Dakota Supreme Court

Appeal from the District Court of Cass County, Pollock, J.

From judgments rendered against them as garnishees, and orders denying their motions for judgment notwithstanding the verdict or for a new trial, Payne & Argusville Farmers' Elevator Company appeal.

Reversed.

Judgments against the garnishees reversed and garnishment action dismissed.

Barnett & Richardson, for appellants.

Plaintiff is not entitled to judgment against the garnishee Payne because no liability existed between Payne and Wyman by reason of the provisions of the lease.

A plaintiff in garnishment proceedings stands in no better position than the defendant does, with respect to the indebtedness sought to be reached by the process of garnishment, and such process will not hold anything which is not legally and equitably the property of the principal defendant. Therefore, an assignment by defendant of the claim due him from the garnishee will take precedence over a garnishment, provided the assignment was in good faith and for a valuable consideration. 14 Am. & Eng. Enc. Law, 857; 20 Cyc. 983; Bambrick v. Bambrick Bros. Constr. Co. 152 Mo.App. 69, 132 S.W. 322; Farley v. Colver, 113 Md 379, 77 A. 591; What Cheer Sav. Bank v. Mowrey, 149 Iowa 114, 128 N.W. 7; Edward Thompson Co. v. Durand, 124 La. 381, 50 So. 407; Mansfield v. Stevens, 31 Minn. 40, 16 N.W. 455; Singer Sewing Mach. Co. v Southern Grocery Co. 2 Ga.App. 545, 59 S.E. 473; Holmes v. Pope, 1 Ga.App. 338, 58 S.E. 281; Rushton v. Davis, 127 Ala. 279, 28 So. 477; St Louis v. Regenfuss, 28 Wis. 144; Bradley v. Byerley, 3 Kan.App. 357, 42 P. 930; Dole v. Farwell, 72 N.H. 183, 55 A. 553; Johnson v. Brant, 38 Kan. 754, 17 P. 794; Netter v. Stoeckle, 4 Penn. (Del.) 345, 56 A. 604; Edney v. Willis, 23 Neb. 56, 36 N.W. 300; Chicago, B. & Q. R. Co. v. Van Cleave, 52 Neb. 67, 71 N.W. 971; Roby v. Labuzan, 21 Ala. 60, 56 Am. Dec. 237; Smith v. Marker, 85 C. C. A. 372, 154 F. 838; Grimwood Co. v. Capitol Hill Bldg. & Constr. Co. 28 R. I. 32, 65 A. 304; Feore v. Mississippi Transp. Co. 161 Ala. 567, 49 So. 871; J. J. Smith Lumber Co. v. Scott County Garbage Reducing & Fuel Co. 149 Iowa 272, 30 L.R.A.(N.S.) 1184, 128 N.W. 389; Peoples' Sav. Bank v. Hoppe, 132 Mo.App. 449, 111 S.W. 1190; Clay Lumber Co. v. Hart's Branch Coal Co. 174 Mich. 613, 140 N.W. 912; Peters v. Snavely-Ashton, 144 Iowa 147, 120 N.W. 1048, 122 N.W. 836; Bedford v. Kissick, 8 S.D. 586, 67 N.W. 609; Grand Lodge, U. B. F. v. Harrison, 5 Ala.App. 373, 59 So. 307; Barkley v. Kerfoot, 77 Wash. 556, 137 P. 1046; Field v. Samis, 12 N. M. 36, 73 P. 617.

The transaction here was simply the giving of security for the furnishing of a supersedeas bond. It was an absolute assignment by defendant of his claim against this garnishee, and therefore garnishing creditors whose process was served after the assignment could obtain no enforceable rights against the garnishee.

The defendants themselves had nothing coming to them from the garnishee. They could not have obtained a judgment against the garnishee. The plaintiff occupies no better position. 14 Am. & Eng. Enc. Law, 857, 858; Roberts v. First Nat. Bank, 8 N.D. 480, 79 N.W. 1049; Bambrick v. Bambrick Bros. Constr. Co. 152 Mo.App. 69, 132 S.W. 322; Sintes v. Commerford, 112 La. 706, 36 So. 656; Williams v. Pomeroy, 27 Minn. 85, 6 N.W. 445; Walling v. Miller, 15 Cal. 38, 7 Mor. Min. Rep. 165; Caldwell v. Coates, 78 Pa. 312; Case v. Ingersoll, 7 Kan. 367; Third Nat. Bank v. Atlantic City, 126 F. 413; 20 Cyc. 992, 993, 1012-1026; What Cheer Sav. Bank v. Mowrey, 149 Iowa 114, 128 N.W. 7; Welch v. Renfro, 42 Tex. Civ. App. 460, 94 S.W. 107; Mason v. Saunders, 89 Kan. 300, 131 P. 562; Holmes v. Pope, 1 Ga.App. 338, 58 S.E. 281; St. Louis v. Regenfuss, 28 Wis. 144; Hall v. Page, 4 Ga. 428, 48 Am. Dec. 235; Roby v. Labuzan, 21 Ala. 60, 56 Am. Dec. 237; McLaughlin v. Swann, 18 How. 217, 15 L.Ed. 357; Cavanaugh v. Merrimac Hat Co. 213 Mass. 384, 100 N.E. 662; Younkin v. Collier, 47 F. 571; Boutwell v. McClure, 33 Vt. 127; Crudington v. Hogan, 105 Tenn. 448, 58 S.W. 642.

The general rule is that only legal, not equitable, rights, are reached by garnishment process. 14 Am. & Eng. Enc. Law, 858; Howard v. Porter, 99 Ga. 649, 27 S.E. 725; Smith v. Worley, 10 Ga.App. 280, 73 S.E. 428; What Cheer Sav. Bank v. Mowrey, 149 Iowa 114, 128 N.W. 7; Rushton v. Davis, 127 Ala. 279, 28 So. 477; Sintes v. Commerford, 112 La. 706, 36 So. 656; Third Nat. Bank v. Atlantic City, 126 F. 413.

The rule is that the reservation of a surplus under an assignment or instrument in trust does not invalidate the transfer. 20 Cyc. 561.

Declarations of an assignor made after an assignment are inadmissible against the assignee. Reinecke v. Gruner, 111 Iowa 731, 82 N.W. 900.

The validity or invalidity of the clause in the assignment as to the surplus can have no effect on the remaining valid provisions thereof. McCormick Harvester Mach. Co. v. Caldwell, 15 N.D. 137, 106 N.W. 122.

The question of notice of the assignment is immaterial. Wyman had the right, without notice to any person, to give the trust company security for furnishing the supersedeas bond. 14 Am. & Eng. Enc. Law, 861; Williams v. Pomeroy, 27 Minn. 85, 6 N.W. 445; White v. Fernald-Woodward Co. 75 N.H. 504, 77 A. 401; Corning v. Records, 69 N.H. 390, 76 Am. St. Rep. 178, 46 A. 462; Amarillo Nat. Bank v. Panhandle Teleg. & Teleph. Co. Tex. Civ. App. , 169 S.W. 1091; Walling v. Miller, 15 Cal. 38, 7 Mor. Min. Rep. 165; Crudington v. Hogan, 105 Tenn. 448, 58 S.W. 642; 20 Cyc. 553-555.

The clause in the assignment as to the surplus is wholly immaterial, for the further reason that there is not one particle of testimony in the record that there was any surplus. Caldwell v. Coates, 78 Pa. 312, and cases cited; Howard v. Porter, 99 Ga. 649, 27 S.E. 725; Smith v. Worley, 10 Ga.App. 280, 73 S.E. 428.

The holder of such surplus, if any, must be made a party before the rights of such third party can be affected. 20 Cyc. 1101; Edward Thompson Co. v. Durand, 124 La. 381, 50 So. 407; Mansfield v. Stevens, 31 Minn. 40, 16 N.W. 455; Brown v. Pillow, 98 C. C. A. 579, 174 F. 967; Corning v. Records, 69 N.H. 390, 76 Am. St. Rep. 178, 46 A. 462.

No presumption of liability on the part of a garnishee can be indulged. 20 Cyc. 1097, 1098; Bambrick v. Bambrick Bros. Constr. Co. 152 Mo.App. 69, 132 S.W. 322; Edward Thompson Co. v. Durand, 124 La. 381, 50 So. 407; Mansfield v. Stevens, 31 Minn. 40, 16 N.W. 455; Field v. Malone, 102 Ind. 251, 1 N.E. 507; Reinecke v. Gruner, 111 Iowa 731, 82 N.W. 900; Payne v. Chicago, R. I. & P. R. Co. 170 Ill. 607, 48 N.E. 1053; Curtis v. Parker, 136 Ala. 217, 33 So. 935; Caldwell v. Coates, 78 Pa. 312.

A. C. Lacy and John Carmody, for respondent.

A cause cannot be tried upon one theory in the lower court and upon an entirely new theory in the supreme court.

In the lower court, appellants contended that the assignment was a sale. Here for the first time they say it was only as security. Lynn v. Seby, 29 N.D. 420, L.R.A.1916E, 788, 151 N.W. 31; Rock v. Collins, 99 Wis. 630, 67 Am. St. Rep. 885, 75 N.W. 426.

Every transfer of property or charge thereon, every obligation incurred, and every judicial proceeding taken with intent to delay or defraud any creditor or other person of his demands, is void as against all creditors of the debtor and their successors in interest. Comp. Laws 1913, § 7220.

It is true that generally the actions of people are presumed to be fair and without intent to defraud others, yet transactions between relatives will be very closely scrutinized to see that no wrong is done. Krause v. Krause, 30 N.D. 54, 151 N.W. 991.

Where it is exclusively within the power of a party to produce evidence fully explaining a given transaction involved, and he purposely withholds the same or fails to produce it, a strong suspicion is raised as to the good faith of the transaction. Whart. Ev. 1266, 1269; Helms v. Green, 105 N.C. 251, 18 Am. St. Rep. 901, 11 S.E. 470; Daisy Roller Mills v. Ward, 6 N.D. 317, 70 N.W. 271.

If a garnishee fails to avail himself of the statutory remedies provided, he alone must suffer. Paulson v. Ward, 4 N.D. 100, 58 N.W. 792.

A garnishee who, before answer, has notice that the defendant in the action has assigned the debt to another before notice of the garnishment was served, must state that fact in his answer, to be protected from an action by the assignee of the debt. Coleman v. Scott, 27 Neb. 77, 42 N.W. 896; Copeland v. Manton, 22 Ohio St. 404; Maxwell, Justice Pr. (Neb.) 5th ed. 341, 342; Drake, Attachm. § 527; Wakefield v. Martin, 3 Mass. 558; Dix v. Cobb, 4 Mass. 508; Warren v. Copelin, 4 Met. 598; Littlefield v. Smith, 17 Me. 327; Winch v. Keeley, 1 T. R. 619, 99 Eng. Reprint, 1284; Walling v. Miller, 15 Cal. 38, 7 Mor. Min. Rep. 165; Smith, T. & Co. v. Clarke, 9 Iowa 241; Nesmith v. Drum, 8 Watts & S. 9, 42 Am. Dec. 260; Wilson v. Davisson, 5 Munf. 178; Tazewell v. Barrett, 4 Hen. & M. 259; Anderson v. De Soer, 6 Gratt. 364.

All defenses not made in the pleadings are considered as waived, especially such as are connected with the facts in the case. Stewart v. Preston, 1 Fla. 11, 44 Am. Dec. 621; Nicholson v. Golden, 27 Mo.App. 132; Wright v. Fire Ins. Co. 12 Mont. 474, 19 L.R.A. 211, 31 P. 87; Ex parte Bergman, 18 Nev. 331, 4 P. 209.

All findings must be supported by the evidence, and a judgment based upon findings not so supported cannot be sustained. Morenhout v. Barron, 42 Cal. 605; Devoe v. Devoe, 51 Cal. 543; Potomac Mfg. Co. v. Evans, 84 Va. 717, 6 S.E. 2.

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