Price v. Brady
| Decision Date | 01 January 1858 |
| Citation | 21 Tex. 614 |
| Parties | TEMPE PRICE v. C. W. BRADY AND ANOTHER. |
| Court | Texas Supreme Court |
The rule that the maker of a negotiable note is not liable in garnishment, is based upon the fact that the note is by law negotiable, and on the liability of the garnishee to the holder of the note, whether he be known or not. 23 Tex. 508;26 Tex. 283.
A receipt given for promissory notes, for collection, to be accounted for to the holder of such receipt, does not belong to the class of instruments negotiable by commercial usage or law, and until the maker of such receipt receives notice of its assignment, he may avail himself of his defenses against the party to whom it was given.
In the construction of attachment and garnishment statutes the rule is, that the personal property in the hands of a garnishee, in respect to which he may be charged, must be such as is capable of being seized and sold under execution.
Under our statutes, choses in action are not liable to levy and sale under an execution.
Promissory notes, in the hands of a person, are not liable to garnishment.
See this case as to the power of our courts to lend equitable assistance to a judgment creditor at law, to reach the choses in action of his debtor.
Appeal from San Augustine. Tried below before Hon. A. O. W. Hicks.
Tempe Price, the appellant, who was a judgment creditor of one C. W. Brady, garnished the appellee, Greer, requiring him to answer, etc. Greer answered, that before the service of the writ of garnishment in this case he executed a promissory note to said Brady, payable to him or bearer one day after date, for $287.50; that said note is unpaid; but that he did not know who was the owner of said note. But on the same day upon which he executed said note he gave said Brady a receipt for several notes, in which it was specified that he would be responsible for said notes, or the money he might collect on them, to the holder of said receipt; that he did not know who was the owner of said receipt. Upon this answer the garnishee was discharged.
F. B. Sexton, for appellants, cited Miller v. Taylor, 14 Tex. 538;Prat v. Law, 9 Cranch, 456; Story, Prom. Notes, sec. 17; 3 Missouri, 88; Drake, Attach. sec. 627.
H. M. Kinsey, for appellee.
Two questions are presented:
1st. Whether L. V. Greer is subject to garnishment as the maker of the promissory note to Charles W. Brady, the defendant in execution?
2d. Whether he is liable in garnishment for certain promissory notes belonging to the defendant Brady, which he (Greer) has in possession, having given a receipt to Brady therefor, promising to account to the holder of the receipt for the notes, or the money he might collect on the said notes?
As to the first ground. The note in question, executed by the garnishee in favor of Brady, was past due at the service of the garnishment, but the garnishee, by his answer, certifies that he did not know who was the owner of the note, as he had not seen it or heard from it since it was executed. In Wybrants v. Rice & Nichols, 3 Tex. 458, it was held that the maker of a negotiable note was not liable in garnishment, but by the answer in that case the garnishee expressed the belief that the note had been negotiated. But the fact of circulation is not the sole ground of exemption. The true reason is in the facts of its negotiability by law, and in the liability of the garnishee to the holder of the note, whether he be known or not.
This note may have been passed before due; if so, the maker (Greer) is liable not to Brady, but to the holder, and it would contravene the principles of the garnishee's liability to subject him to the garnishment when the judgment would be no defense to an action by the holder of the note.
This point was considered and decided in Iglehart v. Moore at this term. Drake, Attach. sec. 580, 586; 14 La. 449, 511; 5 N. H. 502;7 Yerg. 42.
The next point is as to the liability of the garnishee as the holder of promissory notes deposited with him by the defendant for collection, and to account to whoever might hold the receipt.
The garnishee, in his answer, states that he does not know who is now the holder or owner of the receipt. As this instrument is not among those classed as negotiable by commercial usage or law, the holder would not have the rights pertaining to the holder of commercial paper. He would, until he gave notice to Greer of the assignment of the receipt, be subject to defenses which Greer could set up against Brady. Art. 2522. And, until this notice, Greer would be liable under the garnishment, because he could set up the judgment in garnishment as a defense to an action by Brady to recover from him these notes or their value. If promissory notes, belonging to a debtor, in the hands of a third person, are subject to garnishment, there was error in discharging the garnishee, as he did not certify that he had notice of the transfer of the receipt from Brady to another, and until such notice he was liable, and could not claim exemption on the ground that he knew nothing of the then ownership of the receipt.
This brings us to the question of, whether a person having in his possession promissory notes of a defendant can, in respect thereof, be charged as garnishee; and it would appear to be a general rule in the construction of attachment and garnishment statutes, that the personal property in the hands of a garnishee, in respect to which he may be charged, must be such as is capable of being seized and sold under execution, for the reason that, as a general rule, these statutes provide that the garnishee may discharge himself of liability by delivery of the property to the proper officer, and therefore he should not be charged with property which, if so delivered, could not be sold under execution. And as promissory notes, or other choses in action, are not in common law states, as a general rule, made subject to seizure or forced sale, a person in possession of them should not be charged as garnishee. Drake, Attach. sec. 425; 8 Pick. 298;3 Humphreys, 448;9 Mass. 537.
Choses in action are not assignable at common law, and are not subject to sale under a scire facias at common law. But as they are assignable in equity, the inquiry in the courts of this state would be into the terms of the execution laws, to ascertain whether there was an intention to subject choses in action (such for instance as promissory notes) to sale under execution. A law for the execution of judgments, under our system, should be framed as well with the purpose of enforcing decrees in equity as of...
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