Smith v. Butler

• Decision Date: 09 April 1904
• Citation: 80 S.W. 580,72 Ark. 350
• Parties: SMITH v. BUTLER
• Court: Arkansas Supreme Court

80 S.W. 580

72 Ark. 350

SMITH v. BUTLER

Supreme Court of Arkansas

April 9, 1904

Appeal from Hot Springs Chancery Court, LELAND LEATHERMAN Chancellor.

Decree affirmed.

E. H Vance, Jr., and Andrew I. Roland, for appellants.

One who lends another money to pay a debt, and takes his note for its payment, is not entitled to be subrogated to the rights of the creditor. 24 Am. & Eng. Enc. Law, 283; 50 Ark. 108. Appellee was not entitled to an equitable assignment of the creditor's right. Sand. & H. Dig., § 490; 53 Ark 523; 47 Ark. 293. The notes of appellant were not subject to appellee's claim or any judgment he could obtain. 62 Ark 398; 65 Ark. 377; 67 Ark. 133; 69 Ark. 123; 52 Ark. 101; 33 Ark. 762; 57 Ark. 242; 60 Ark. 90. The lien of a garnishment dates from the service of the writ. 39 Ark. 97; 40 Ark 531. Negotiable paper is not subject to garnishment until it has fallen due. Waples, Attach. 279; 10 Cal. 339; 64 Ky. 489; 6 Mich. 326; 57 Tenn. 401; 22 Tex. 230. A lien of a garnishment does not dislodge prior liens. Waples, Attach. §§ 18, 779-836. A lien of the vendor is personal, and exists only between vendor and vendee. 31 Ark. 596; 53 Ark. 523; Tied. Com. Pap. 415; Dan. Neg. Inst. § 800a; 45 Ark. 271; 48 Ark. 354.

N. P. Richmond, and H. Berger, for appellee.

The garnishment proceeding operates as a compulsory statutory assignment. Drake, Attach. § 452; 1 Metc. 476; 7 Neb. 300. A vendor's lien is a creature of equity. Waples, Homestead & Ex. 332, 335. The lien was assignable. 62 Ark. 400; 66 Ark. 444; 69 Ark. 125. The notes were subject to garnishment. Sand. & H. Dig., §§ 3714-3718; 55 Ark. 139; 70 Ark. 70. A debtor cannot claim his exemptions of property sold under attachment where he has had an opportunity and neglected to claim his exemptions as provided by statute. 55 Ark. 139; 53 Ark. 54. In the case at bar, the payee and garnishee were protected against the danger of twice paying the debt. 53 Ark. 524. Negotiable paper may be reached by garnishment where it affirmatively appears that the note had become due, and was still the property of the payee. 38 Ga. 18; 58 Ga. 615; 62 Ala. 113; 13 Ind. 161; 14 Ind. 453; 17 Ind. 520; 26 Ind. 375; 46 Ind. 246; 2 Greene, 125; 10 Cal. 339; 14 Am. & Eng. Enc. Law (2d Ed.), 770; Drake, Att. §§ 583-590. The language of an opinion should be construed with reference to the facts before the court. 24 Ark. 439; 61 Ark. 43. Final judgment was properly rendered against the garnishee upon answer showing indebtedness to the defendant, against whom judgment had been previously rendered. 70 Ark. 127.

OPINION

BATTLE, J.

H. W. Rains was indebted to H. A. Butler for goods, wares and merchandise in the sum of $ 121.75. He was a married man and the head of a family, and owned and resided on certain lands in this state. On the 190th day of November, 1897, he sold the lands to S.D. Newman, and received for the same $ 80 in cash, and three promissory notes of Newman--one for $ 75, due December 1, 1898; one for $ 74, due December 1, 1899; and the other for $ 73, due December 1, 1900--and by deed conveyed the lands to Newman, and reserved in the deed a lien on the lands to secure the payment of the unpaid purchase money. His wife joined him in the execution of the deed, and therein relinquished dower and homestead, and acknowledged the execution thereof. On the 27th of November, 1897, Butler recovered a judgment against him before a justice of the peace for the $ 121.75, and on the 19th of September, 1898, sued out a writ of garnishment against Newman, and on the 10th of December, 1898, recovered a judgment against the garnishee for the amount of his note that was due and payable on the 1st day of December, 1898, of which Rains at the time was owner. Newman appealed to the circuit court, and Butler recovered the same judgment in that court against him. Rains transferred the note that was garnished, after its maturity and judgment thereon before the justice of the peace, to W. R. Collie, and transferred the other two notes, before maturity, to S.W. Smith. Butler instituted this suit against Newman in the Hot Springs chancery court to enforce the lien upon the lands reserved in the deed. Rains, Collie and Smith were made defendants. Collie answered, and claimed the note that was garnished, and asked for judgment thereon against Newman and for sale of lands to pay the same. Smith answered, and asked for judgment upon the two notes transferred to him, and for the enforcement of the lien upon the lands, and that his notes be first paid out of the proceeds. The court rendered the judgment asked for by Smith against Newman, and decreed that the lands be sold, and that, if they did not sell for enough to pay the judgments of Butler and Smith, the proceeds of the sale be applied pro rata in part payment thereof. Newman, Collie and Smith appealed.

The lien reserved in the deed executed by Rains to Newman as security for the payment of the notes for the purchase money is analogous to a mortgage, and passed, with the transfer of the notes, as an incident thereto. Pullen v. Ward, 60 Ark. 90, 28 S.W. 1084; Morris v. Ham, 47 Ark. 293, 1 S.W. 519. The garnishment of the note due on the 1st day of December, 1898, and the judgment for the amount thereof in favor of Butler against Newman, vested Butler with the complete right to the indebtedness of Newman evidenced thereby, together with all the rights and remedies possessed by Rains for the collection of the same, including the lien reserved for security. If it were otherwise, the garnishment and the judgment that followed, would be of no avail, and the debt would be transferred without the means of collecting it, and the object of the garnishment, which was to enable Butler to collect the debt due him, would be defeated, and Newman would hold the land he purchased from Rains free and discharged from the lien reserved for the payment of a part of the purchase money, and the contract of the parties would thereby in part be defeated. Such would be a most unreasonable interpretation of the law, and subsersive of its object.

The transfer of...