Case ID: mont_26/html/0163-01.html
Source: Caselaw Access Project
Author: {"author": "\n      ME. JUSTICE PIGOTT", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

COWELL, Respondent, v. MAY et al., Appellants.
    (No. 1,379.)
    (Submitted November 19, 1901.
    Decided December 9, 1901.)
    
      Garnishment — Contingent Liability — Liability of Garnishee— Evidence — Findings—Supplemental Findings.
    
    1. Iu order to charge a garnisbee, there must be at tbe time of the service a debt due or to become due, and not a contingent liability .or a conditional contract merely.
    2. One whose land had been sold under foreclosure, and against whom a deficiency judgment had been entered, contracted to sell his equity to the purchaser on the foreclosure for a certain sum, if the purchaser would secure and deliver to the debtor a receipt from the judgment creditor for all sums due him from the debtor. The debtor executed a deed, and deposited it in escrow, to be delivered to the purchaser on the delivery of the receipt, and the payment of the balance of the purchase price, $10 being paid at the time. Prior to any delivery of the receipt or any waiver of the same on the part of the debtor, the execution purchaser waj served with garnishment process at the suit of the judgment creditor. Held, that the purchaser was not liable, his liability to the debtor having been merely contingent.
    3. Implied findings may supplement, but they cannot be allowed to contradict, express findings.
    4. It was proper to admit evidence showing that after service of the garnishment process, the deed in escrow was destroyed, and another one made, and the entire consideration paid, for the purpose of showing what the original terms of the contract were at the time the process was served.
    5. The trial court having found the facts as to the contract as originally made, and that there had been no delivery of the receipt, or waiver thereof, findings to the effect that the destruction of the deed in escrow after service, and the giving of another deed, and the payment of the consideration, were for the purpose of evading the garnishment process, could not aid the plaintiff.
    
      Appeal from District Court, Ravalli Gounty; F. H. Woody, Judge.
    
    Action by Charles L. Cowell against Albert May and George May, co-partners under the firm name and style of May Brothers. Erom a judgment in favor of plaintiff, defendants appeal.
    Reversed.
    
      Mr. G. B. Gallcins, for Appellants.
    
      Mr. Frank Woody, for Respondent.
   ME. JUSTICE PIGOTT

delivered, tbe opinion of tbe courts

Tbe defendants pncbased at sheriff’s sale under a .decree of foreclosure, tbe land of one Harris. Upon tbe coming in of tbe sheriff’s return, on tbe 8th day of July, 1897, a deficiency judgment for $290 was docketed in favor of Cowell, tbe plaintiff in that action and also tbe plaintiff in this, and against Harris, tbe defendant therein. On tbe 10th day of July, 1897, tbe defendants, being' desirous of obtaining immediate possession of the land so purchased by them, entered into negotiations with Harris, they offering to pay him for bis equity of redemption tbe sum of $350, and Harris promising to convey for that price if be could get a receipt from tbe plaintiff in full .of all demands. On tbe next day Harris signed and acknowledged a deed therefor and left it in tbe possession of one Cal-kins upon tbe express condition, agreed to by tbe defendants, that be should not deliver it until the defendant Albert May delivered to Calkins a receipt in full of all claims and demands which,tbe plaintiff held against Harris. Tbe condition in respect of tbe receipt was shown to have been for tbe benefit of Harris only, tbe performance of which be might waive. ■ There was no evidence tending to prove that tbe defendants, or either of them, promised t to procure or deliver tbe receipt. Tbe receipt was never obtained. At tbe time tbe deed was signed tbe defendants paid $10 to Harris on tbe purchase, price. Thereafter, but ¡on tbe same day, tbe plaintiff caused the sheriff to serve upon tbe defendants a copy of tbe writ of execution issued upon tbe deficiency judgment, together with a notice that any debts owing by them to Harris were attached. Tbe defendants made answer to tbe garnishment by denying that they were, or that either of them was, indebted to Harris. On tbe 13th day of July, 1897, Calkins, with whom tbe deed.bad been left in escrow, prepared another deed in which Harris was named as tbe,-grantor and the defendants as the grantees, conveying tbe same property described in tbe first deed. In company with one of tbe defendants, Calkins went to Jhe ranch of Harris, returned to him the first deed, and requested him to sign, acknowledge and, deliver the second one. This he did, and the defendant who was then present paid to Harris $340, the remainder of the purchase price: Thereafter the court,, by an order to that effect, authorized the plaintiff, who, as we have said, was i the judgment creditor of Harris, to institute an action against the defendants for the recovery of the alleged debt owing by them to Harris; whereupon this action was commenced tunder the provisions of Section 1266 of the Code of Civil Procedure. The complaint states the formal matters required in an action of this character, and alleges that at the time of i the service of the copy of the execution and of the notice on the defendants, they were indebted to Harris in the sum of $340, and prays for judgment that the defendants be, compelled to pay to the plaintiff a sufficient amount therefrom to satisfy his judgment against, Harris. The defendants by answer denied that at the time of the garnishment they, or either of them, were, of was, indebted to Harris in. any sum whatever. In this statement are set out such facts as we deem relevant to the only question necessarily presented(on the appeals; what other matters the evidence may have tended to prove need not be recited. The court found for the plaintiff and rendered-judgment in his favor. Prom the judgment and order refusing a new trial the defendants prosecute these appeals.

The single question upon which the case as presented to this court must he decided, is whether or not the defendants were indebted to Harris at the time the garnishment was served upon, them. The court made special findings of fact, the fourth and fifth of which are as follows: “Fourth. That on the 10th day of July, 1897, when the notice of garnishment was served on the defendants, the said Benjamin N. Harris had, executed a quitclaim deed of his equity of redemption to; a tract of land to said May Brothers, for a valuable consideration upon the following conditions, to-wit: Said Harris placed said deed in the hands of C. B. Calkins, and at the same time instructing said Calkins not to deliver said deed to said May Brothers, until Albert May, one of tbe firm of said' May Brothers, sbonld deliver to said Calkins a receipt in full of all claims and demands which one Charles L. Cowell had and held against said Harris, and that upon the delivery of said receipt, the said Calkins was to deliver said deed to May Brothers, they paying to said Harris a balance of $340, they, May Brothers, having already paid to said Harris $10 at the time of the execution of said deed. Fifth. That said Albert May did not procure said receipt from said Coiwell, on attempt soi to do.” Both parties agree that these findings are correct, and although implied findings may supplement they cannot be allowed to contradict express findings. Under the evidence it is unquestionable that there was a contract entered into between May Brothers and Harris for the purchase and sale of the equity of redemption. It is equally true that, under the fourth finding, the stipulations in the contract were mutual and dependent, and the liability of the defendants conditional, — in other words, they would not become indebted to Harris unless and until Albert May delivered to Calkins a receipt in full running from Cowell to Harris, or Harris waived such delivery. ■ The defendants did not expressly promise to obtain or deliver tire receipt, nor did any legal duty or obligation so to do rest upon them, or either of them. To get it might have been impossible. If they did not get it and Harris did not waive the fulfillment of this condition, the executory contract of sale would fall and there could be no cause of action in favor of Harris against the defendants arising out of the nonpayment of the purchase price. They had, it is true, agreed with Harris to make the purchase and to pay him $350, and they had paid him $10' of the price, but that agreement was subject to- the condition just mentioned. Unless the fulfillment of the condition was waived by Harris, the delivery of the receipt was a condition precedent to the existence of a debt. The procurement and delivery of the receipt was an act which Harris required to be done for his benefit, and for his benefit only; and if Albert May had delivered the receipt to Calkins, then Harris would have possessed the right (perhaps without a formal demand of payment, but in any event after such demand) to maintain an action against the defendants for the unpaid purchase price; but until the receipt was delivered, or until Harris waived its delivery, there was no indebtedness owing by the defendants to Hands. Such was the condition at the time the garnishment was served. Harris might have waived the performance of the the condition precedent to the defendants’ liability, and this waiver would have created a liability certain, the right to enforce which would have inured by subrogation to the plaintiff; but Harris did not do so until after the defendants were served. Although the immaturity of a debt at the time of garnishment is, of itself, unimportant in so far as the ultimate liability of the garnishee is concerned, yet, in order to charge him, there must be an existing debt at the time of the service, — a contract under which a debt may or may not arise is not sufficient. There must be at the time of the service a debt due or to become due, and not a contingent liability or a conditional contract merely. “The debt from the garnishee to the defendant, in respect of which it is sought to charge the former, must moreover be absolutely payable, at present or in future, and not dependent on any contingency. If the contract between the parties be of such a nature that it is uncertain and contingent whether anything will ever be due in virtue of it, it will not give rise 1» such a credit as may be attached; for that cannot properly be called a. debt which is not certainly and at all events payable, either at the present or some future period.” (Drake on Attachment, 7th Ed. Sec. 551.) Except in so far as the necessity .of making a demand for payment (if such necessity would have existed) is concerned, the plaintiff stands in no better position than Harris; the former was subrogated to the rights of the latter. The question whether the defendants are liable to1 the plaintiff may be tested by inquiring whether Harris, without waiving his right to the receipt from Cowell, could have maintained an action against May Brothers at the time of'the garnishment. Let it be supposed that Harris had sued the defendants on'July 10, 1897, to recover judgment for $340, alleging tbe matters stated in findings four and five, a demand and a refusal on tbe part of tbe defendants to pay tbe money or deliver tbe receipt, and that be did not waive tbe performance of tbe condition 'touching tbe receipt, but would insist upon tbe performance of that condition as prerequisite to' tbe delivery of tbe deed; is it not apparent that tbe complaint would be de-murrable for want of substance? Or if tbe plaintiff bad brought tbe present action while tbe original contract was in force and before tbe transaction of July 13, is it not perfectly clear that tbe defendants would prevail because at tbe time of tbe garnishment they did not owe a debt to Harris? Again, let it be supposed that tbe defendants, upon being garnished, paid to tbe sheriff tbe remainder of tbe purchase price, as they may do under Sections 900, 903, 1218, and 1262 of tbe Code of Civil Procedure (if they are indebted to tbe principal defendant), and thereupon bad demanded of Harris tbe delivery of tbe deed, asserting that they bad fully performed tbe conditions on their part; could tbe defendants compel Harris specifically to perform tbe contract by delivering tbe deed of' conveyance? Would not tbe court declare that tbe payment to tbe sheriff was not tbe liquidation of any debt owing by tbe defendants to Harris, but was merely voluntary? We think such wonld be tbe case. Tbe plaintiff is in no better situation than Harris would have’been under tbe circumstances suggested in tbe first example. For aught that appears, tbe receipt required by Hams might never be obtained; if not obtained by tbe defendants or waived by Harris, there could be- no liability of tbe defendants to him under the terms of tbe original contract. The case of Baltimore & Ohio Railroad Company v. McCullough & Company, 12 Grattan, 595, wherein tbe court held tbe garnishee not liable, involves tbe consideration of a question identical in principle with the case at bar.

Other special findings have to do with tbe conduct of the defendants and Hands after tbe service of garnishment- Among them is one. that there was no new bargain on July 13 when tbe old deed was surrendered, tbe new deed delivered and tbe payment made, and tbat tbe transaction of tbat date was for tbe purpose of avoiding the effect of tbe garnishment of July 10. In passing we remark tbat tbe first part of this finding conflicts with tbe fourth finding, for Harris delivered tbe new deed and accepted payment without requiring tbe defendants to comply with tbe condition of tbe first contract touching tbe receipt from Cowell; and as to tbe fatter part of tbe finding, we observe tbat tbe 'motive imputed may have, existed, but if tbe fourth and fifth findings be correct there was no debt attached by tbe process of garnishment. With respect to this finding and all other findings subsequent to tbe fifth, it is sufficient to say tbat, while evidence of tbe facts to which they relate was admissible because of its tendency to prove what tbe terms of tbe contract of July 10 were and whether there was an indebtedness owing by tbe defendants to Harris at tbe moment of service, they cannot, in view of tbe fourth and fifth findings, sub-serve any purpose. It was for tbe court below to draw from all tbe evidence tbe inferences of fact and declare what tbe contract was and whether a debt existed. Tbe only legitimate conclusion ultimately deducible from findings four and five is tbat tbe contract to purchase was conditional and tbe liability of tbe defendants contingent; tbat at tbe time of tbe garnishment tbe condition upon which depended tbe liability of tbe defendants for tbe remainder of the purchase price bad not been performed by them or waived by Harris, and hence tbat there was no debt.

Hnder tbe findings, we must therefore bold that at tbe time of the garnishment tbe defendants were not indebted to Harris, and hence tbat there was no debt attached by tbe process of garnishment.

For these reasons tbe judgment and tbe order appealed from are reversed and tbe cause is remanded for a new trial.

Reversed and remanded.