Pitkin & Brooks v. Burnham, Hanna, Munger & Company

• Decision Date: 10 July 1901
• Docket Number: 9,451
• Parties: PITKIN & BROOKS ET AL., APPELLANTS, v. BURNHAM, HANNA, MUNGER & COMPANY ET AL., APPELLEES
• Court: Nebraska Supreme Court

87 N.W. 160

62 Neb. 385

PITKIN & BROOKS ET AL., APPELLANTS, v. BURNHAM, HANNA, MUNGER & COMPANY ET AL., APPELLEES

No. 9,451

Supreme Court of Nebraska

July 10, 1901

APPEAL from the district court for Adams county. Heard below before BEALL, J. Reversed.

REVERSED AND REMANDED.

Tibbets Bros., Morey & Ferris, for appellants.

J. B Cessna, Batty, Dungan & Burton, M. A. Hartigan, John Hartigan, Smith & Olmstead and John C. Stevens, contra.

OPINION

HOLCOMB, J.

The present action has its origin in a controversy between creditors of an insolvent merchant in regard to their respective rights in, and priorities to, the proceeds of a sale of a stock of merchandise formerly owned by the insolvent debtor. The plaintiffs, appellants, claim priority by virtue of proceedings taken in attachment and garnishment and processes issued therein and served on one David Barlass a constable, who, it is claimed, was in possession of the stock of merchandise under and by virtue of several successive levies of writs of execution issued out of the county court of Adams county on judgments against the debtor by confession which were in favor of several alleged creditors who are not parties to this action. The defendants, appellees, lay claim to the proceeds of the debtor's property by reason of several writs of attachment levied or attempted to be levied directly thereon by the sheriff of said county in whose hands they were placed, and who, ignoring the possession of the constable, by acts amounting to force and violence wrested from him the possession of the property the proceeds of which are in dispute.

The salient features of the case as we gather them from the record appear as follows: One Rollins, a retail merchant, was indebted in various sums to all the parties to this action save the sheriff and constable; and being in failing circumstances went before the county court of said county at about 2 o'clock in the morning, and confessed judgments in favor of different parties, who it is claimed, were relatives of the debtor and who were represented by attorney, for various sums of money alleged to be due and owing such parties aggregating in amount between sixteen and seventeen thousand dollars. Immediately after the confession of the several judgments and the entry thereof executions were issued thereon and delivered to the said David Barlass, constable, for service. In the execution of these several writs the constable went to the building containing the stock of goods of the judgment debtor and served the same by taking possession of the property, declaring that by virtue of the executions which he held and for their satisfaction he levied on all the property in the building; after fastening the doors and windows, putting a locked padlock on the front door, and posting a notice to the effect that the store was closed on executions levied on the property therein, he temporarily departed from the building. While the constable was thus absent, the sheriff of the county, in whose hands there had been placed several writs of attachment issued at the instance of the appellees, who are creditors of the judgment debtor or some of them, knowing of the possession taken by the constable, his levy of the writs of execution, and that he claimed the property by virtue of the levies he had made thereon and the actual possession taken thereunder, entered the building and in form levied on the stock of goods under the writs of attachment he then held, in utter disregard of the rights and claims and possession of the constable under his several executions theretofore levied. It appears that some one, whether the sheriff or some person for him, is not disclosed by the record, had broken open the rear door of the building and by this means the sheriff gained an entrance to the building. When the constable sought to regain possession, he was barred from entrance into the building until finally, after gaining admission by strategy, he was forcibly ejected therefrom and by superior force denied any further control or possession of the property on which he had levied the executions placed in his hands for service. Immediately following the levy by the sheriff of the attachment writs in the manner stated, the appellants, as creditors also of the judgment debtor, instituted attachment and garnishment proceedings for the recovery of the debts due them and garnisheed the constable as having in his possession property and goods of the debtor subject to attachment which could not otherwise be reached. Later on the judgments rendered against Rollins by confession were satisfied of record and the constable directed to return the executions issued thereon, which was accordingly done, with a return indorsed thereon showing what had been done in pursuance thereof, and that the constable, while the levy was in force, had been garnisheed by other creditors of the judgment debtor as having property in his possession belonging to such debtor. The constable also answered in the garnishment proceedings, disclosing in his answers the facts as to his levy on the property of the debtor under the executions he then held, and the subsequent transactions with reference to the property being wrested from his possession by the sheriff.

In the petition filed in this cause it is alleged: "That during the night between said December 28, 1896, and the following day, said Harry B. Rollins, for the purpose and with the intent of hindering and delaying his said creditors, confessed judgments before the county judge of said county and procured executions to issue thereon forthwith." This allegation is, by the different answers filed, admitted to be true. Because it stands admitted under the pleadings by all the parties to this action that the judgments on which the executions were issued, and by the constable levied on the judgment debtor's property, were confessed for the purpose and with the intent of hindering and delaying the creditors of the judgment debtor, it is contended by those claiming under the levies of the attachment writs made by the sheriff that the judgments and executions issued thereon are mere nullities and wholly void and no rights of any kind were or could be acquired thereunder or thereby, while the other creditors who garnisheed the constable while in the constructive possession of the property by virtue of the executions levied thereon insist that the judgments and the executions were valid and binding and the possession of the constable lawful until the time the judgments were satisfied and the execution withdrawn, or until it was judicially determined that the judgments were fraudulent and void as against the creditors of the judgment debtor; that the judgments were at most voidable only, and not void.

A correct decision of the case therefore hinges on the legal status of the property in the possession of the constable under the executions he held, issued on the judgments, which we may, for the purpose of this case, assume to have been fraudulently confessed for the purpose of defrauding the other creditors of the judgment debtor. It is not suggested nor is there anything to warrant the inference that either the county judge entering the judgments by confession or the constable in whose hands the executions were placed for levy and satisfaction of the judgments, acted other than in good faith and in an honest discharge of official duty. If the judgments were fraudulent, the officers connected with their rendition and enforcement are free from any taint of the fraud thus sought to be perpetrated. All parties to this action then acting on the assumption that the judgments by confession were procured for the purpose of defrauding the good-faith creditors of the debtor, what are the rights of the constable in possession of the property under the writs of execution placed in his hands for service and the other good-faith creditors who sought to charge the constable as garnishee so holding the property by a constructive, if not actual, possession before the judgments by confession were satisfied of record and the executions recalled? Or stating the proposition in another way, can the sheriff make a valid levy under the attachment writs placed in his hands for execution on the same property which the constable had levied on, in disregard of the levy and possession of the constable under the executions issued on the judgments thus fraudulently confessed? Counsel for the appellees take the affirmative of the last proposition and say in their brief: "Property levied upon and taken into possession on judgments fraudulently confessed and executions issued to hinder and delay creditors is not in custodia legis, but is subject to another process issued from another court." Counsel for appellants vigorously combat the proposition thus contended for. Let us briefly examine the question. The judgments were not void. They were only voidable. The court had jurisdiction over the parties and over the subject-matter. The judgments on their faces were in all respects regular and valid and the court was possessed of power to render them. The parties were before it and it had jurisdiction of their persons. The judgments were binding on the parties and all the world, save perhaps the creditors of the judgment debtor, who could assail them as being fraudulent and void in so far as by them the property of the debtor was sought to be taken in fraud of their rights. The judgments were not nullities; they were not absolutely and altogether void. They were enforceable except in so far as they conflicted with the rights of the creditors, and as to them they were voidable, and together with any lien on property attempted to be created by an execution issued thereon could be set aside in any proper...