Tabor v. Bank of Leadville

• Decision Date: 06 November 1905
• Citation: 83 P. 1060,35 Colo. 1
• Parties: TABOR v. BANK OF LEADVILLE (TRIMBLE, Garnishee.)
• Court: Colorado Supreme Court

83 P. 1060

35 Colo. 1

TABOR v. BANK OF LEADVILLE (TRIMBLE, Garnishee.)

Supreme Court of Colorado

November 6, 1905

Appeal from District Court, Arapahoe County; Samuel L. Carpenter Judge.

Action by Elizabeth B. Tabor, as executrix, against the Bank of Leadville; George W. Trimble being garnishee. From a judgment discharging the garnishee, plaintiff appeals. Affirmed.

In 1889 plaintiff's testator brought an action in the district court of Arapahoe county against the Bank of Leadville, a domestic corporation doing a banking business in the city of Leadville, to recover the amount of various deposits made in and wrongfully withheld by the bank. The summons was served upon one of the bank's stockholders in the county of Arapahoe, who, on the same or next day employed an attorney to represent the defendant in said action, and the attorney entered into a stipulation with plaintiff's attorney before time for pleading expired, that judgment might be rendered against defendant in the sum of $54,412. Upon this stipulation judgment was, the next day after the complaint was filed, rendered by the court against the defendant for the plaintiff, and on the same day execution was issued afterwards returned nulla bona, and notice of garnishment served upon George W. Trimble, garnishee and appellee herein. To the interrogatories propounded, the first three of which were in the statutory form, and three others which were deemed pertinent by the plaintiff, the garnishee made answer which, for the purposes of this review, may be summarized as consisting of (1) a plea to the jurisdiction of the court (2) a plea of the statute of limitations; (3) a defense that the garnishee, at the time of service upon him, did not have any property or effects or money of any kind in his possession belonging to the defendant; (4) an offset. The plaintiff replied to these various answers or pleas, and upon the issues thus joined, evidence was heard by the court without a jury, and findings made in favor of the garnishee upon which a judgment discharging him was rendered. From this judgment discharging the garnishee, the plaintiff brings the case here by appeal. To elucidate the different questions involved, the material facts bearing upon what we consider the important questions of the case are recounted. In 1883 the Bank of Leadville, the defendant in the pending action, was insolvent. Its board of directors deemed it to be to the interest of its creditors to have a receiver appointed to take possession of its property and adjust its affairs, and to this end, at a special meeting of the board, a resolution was passed requesting the cashier to obtain the consent of Trimble, the garnishee in this action, to act as receiver, and then to make proper application to the district court of Lake county for that purpose, and also instructed its cashier to assign the bank's property and assets to Trimble for the benefit of its creditors. In pursuance of this authority, and for such purpose, the cashier, in behalf of the bank, made the application, and the garnishee herein was appointed receiver and accepted the appointment. The cashier, also, in the name and under the seal of the bank, executed a written assignment to Trimble purporting to convey to him all the property and assets of the bank for the benefit of its creditors, and this deed was duly recorded. Possession of all the bank's property of every kind was taken by Trimble, apparently as receiver and assignee and as trustee or agent of the bank, and in the course of years he proceeded to realize upon the assets, bringing a large number of suits for that purpose, and succeeded in thus collecting $69,264.61. In the receivership proceeding, and before the same was adjudged void, as hereinafter noted, various orders were made by the district court, among others one allowing the receiver, as compensation for his services, and for expenses of administering the trust, the total sum of $24,123.68. After Trimble was appointed receiver and the deed of assignment executed, and after he had so taken possession of the bank's assets, two actions were brought directly against the Bank of Leadville, one by Jones and the other by Breene, in which judgments were duly rendered, and attachments were sued out in aid thereof, and Trimble was garnished thereunder. In the district court of Lake county, where the suits were begun and then pending, the garnishee was discharged; the court holding that Trimble's possession as receiver, antedating the levy of the writs, was superior to the lien of the attachment and garnishment. Upon review of the Jones Case in this court, which was taken up as a test case, the receivership was held void, and the judgment of the district court in favor of the garnishee was reversed, and the cause remanded, with instructions to sustain the attachment and garnishment proceedings, and to make the lien thereby acquired upon the bank's property in the garnishee's possession a first lien as against any rights claimed under the receivership. In pursuance of such instructions, the district court proceeded with these cases, which involved the same question, and with the consent and approval of Jones and Breene, the defendant bank being a party and having an opportunity to be heard, rendered judgment against the garnishee in favor of the bank for the use of the plaintiffs Jones and Breene to the extent of the value of the bank's property which he held in his possession, less the amount of the demands which the garnishee claimed he was entitled to deduct from the defendant's property in his possession, for his costs, expenses, and attorney's fees, and compensation for his own services for reducing defendant's property and assets to money, which was for the same sum that was previously allowed him in the receivership proceeding. Trimble carried out the judgment by turning over to the sheriff, to be applied on the Jones and Breene judgments, this balance, thus ascertained, and thereupon was discharged from further liability to the bank. Jones and Breene, the judgment creditors, whose judgments aggregated about $100,000, thus received, to be applied thereon, the sum of $45,140.93, and expressly consented that the remainder of the property and money of the bank which the garnishee Trimble had in his possession, amounting to $24,123.68, should be retained by him out of which to pay the aforementioned demands which he claimed against the bank. We do not find that the bank gave its consent, or made any objection. The amount thus retained, together with that turned over to the sheriff to be applied upon the Jones and Breene judgments, included everything which the garnishee had received from the sale of the bank property, and covered all its assets which came into his possession. It is for this sum of $24,123.68 which plaintiff in this action claims judgment should have been rendered against the garnishee in the bank's favor for plaintiff's use.

Philo B. Tolles, Thomas D. Cobbey, and Charles H. Burton, for appellant.

Chas. Cavander, L. M. Goddard, and S.C. Warner, for appellee Trimble.

CAMPBELL, J. (after stating the facts).

This action was against a bank organized as a corporation under the laws of this state. Its business, so long as the same was prosecuted, was carried on exclusively in Lake county, Colo. This action was begun in the district court of Arapahoe county. The service of summons was made upon one of the bank's stockholders who was found in Arapahoe county. On the day of the service, or the one next succeeding, this stockholder in such capacity employed a lawyer to represent the bank in the action, and this lawyer immediately entered into a stipulation with plaintiff's counsel which amounted to a compromise judgment against defendant for $54,412. The garnishee here claims that this judgment was void, and for that reason alone he should be discharged as garnishee, even though he have assets of defendant in his possession. It is said, first, that the service of process upon a stockholder, in the circumstances, was invalid; and second, that as the result of a corrupt bargain with plaintiff the stockholder was induced to come from his own home into Arapahoe county for the express purpose of having summons served upon him, and that as the result of a like corrupt contract with the plaintiff he wrongfully secured the stipulaton to be made by the attorney for the entry of the judgment. Plainti...