#### Eau Claire National Bank, Respondent, vs. Chippewa Valley Bank, Garnishee, imp., Appellant.

*March 14*

April *5, 1905.*

*Garnishment: Bank: Fraudulently transferred note and mortgage received for collection: Interpleader: Judgment: Interest: Costs.*

1. A note and mortgage were assigned by husband to wife in fraud of creditors and were by the wife placed in a bank for collection. After it had received a check from the mortgagor in payment, the bank was garnished by a creditor of the husband and had notice of the plaintiff’s claim that the assignfnent to the wife was void. It nevertheless paid the money to the wife, who had also been made a garnishee. *Held,*that under sec. 2768, Stats. 1898, the bank was liable as garnishee.

2. Although the bank and the wife of the principal defendant were proceeded against severally as garnishees, yet all were parties to the proceeding, so that no interpleader was necessary, and a judgment in favor of the plaintiff against the bank as garnishee, and also determining that the wife had no title to the note and mortgage, was proper.

3. Under sec. 2768, Stats. 1898, the bank was liable in such case for interest on the amount found to have been in its possession as garnishee, from the date of the judgment in favor of plaintiff in the original action.

4. The bank having denied all liability, costs were properly awarded against it, under sec. 2772, Stats. 1898.

*521Appeal from a judgment of the circuit court for Eau Claire county: James O’Neill, Circuit Judge.

*Modified and affirmed.*

It appears from tbe record that May 28, 1902, the plaintiff commenced an action against John T. Eriend and three other parties to recover $5,976, over and above all offsets, founded upon express contract. In addition to the facts mentioned, the affidavit for garnishment stated, in effect, that the affiant believed that Louise E. Eriend and the *CMppewa Valley Bank*were indebted to or had property, real or personal, in their possession or under their control belonging to the defendant John T. Eriend, who had not property liable to execution sufficient to satisfy the plaintiff’s demand, and that such indebtedness or property was, to the best of the affiant’s knowledge and belief, not by law exempt from seizure and sale upon execution.

The *CMppewa Valley Bank,*through its cashier, on June 8, 1903, separately answered such garnishment upon oath, and therein stated that at the time of the service of the garnishee summons upon it “the *CMppewa Valley Bank*was then, and is now, in no manner and upon no account whatever indebted or under liability to the defendant John T. Eriend, and that it then had, and now has, in its possession or under its control, no real estate and no personal property or credits of any description whatever belonging to said defendant or in which he has any interest, and is in no manner liable as garnishee in this action.” On the same day the plaintiff’s attorneys notified the attorneys of the *CMppewa Valley Bank*that the plaintiff thereby elected to take issue on the answer of the *CMppewa Valley Bank*therein to the garnishee summons, and would maintain it to be liable as garnishee.

On June 16, 1902, Louise E. Eriend separately answered such garnishment upon oath to the same effect as the answer of the *CMppewa Valley*Bank, and on the same day the *522plaintiff, by its attorneys, notified tbe attorneys for tbe said Louise E. Eriend that they thereby elected to take issue on tbe answer of Louise E. Eriend therein, and would maintain her as liable as garnishee.

On April 18, 1903, the plaintiff recovered judgment in ' the circuit court in the original action against John T. Eriend and the other three parties referred to, in the sum of $6,621.18 damages and costs. On April 11, 1904, such issues on the respective answers of the garnishees, the *Chippewa Talley Banlc*and Louise E. Eriend, were tried, and at the close of the trial the court found, as matters of fact, in effect: (1) That judgment was rendered and entered in the original action as stated; (2) that at the time of the garnishment (May 28, 1902) the *Chippewa Talley Banlc*had in its possession and under its control a certain promissory note secured by mortgage on real estate, dated July 10, 1900, and executed and delivered by Theodore and Ida Maas, and payable to John T. Eriend, for $800, with interest, amounting in all on that date to $844-. 88, together with an assignment of said note and mortgage by John T. Eriend" to Louise E. Friend dated February 13, 1902; also a satisfaction of said mortgage, dated May 23, 1902, and executed by Louise E. Eriend; also a check signed by William A. Teall, agent, on the “New Bank of Eau Olaire,” payable to the order of the *Chippewa Talley*Banlc, for $844.88, which had been delivered to and accepted by the *Chippewa Talley Banlc*in payment of said note and mortgage, and which was afterwards, and on May 28, 1902, paid by said New Bank of Eau Claire to the *Chippewa Talley Bank,*and which property so in the hands of the *Chippewa Talley Banlc*was at the time of the value of $844.88; (3) that said note and ..mortgage and check at the time of the garnishment were owned by and the property of John T. Eriend, and the note and mortgage had been placed in the *Chippewa Talley Bmlc*for collection and payment by Louise E. Eriend; (4) that said assignment of the *523note and mortgage from Jobn T. Eriend to Louise E. Eriend was made by said Jobn T. Eriend,-and received by Louise E. Eriend, for tbe purpose of bindering, delaying, and defrauding tbe creditors of Jobn T. Eriend, and tbat in making said assignment said Louise E. Eriend bad notice of and participated in said fraud; tbat at tbe time of making tbe assignment tbe plaintiff was a creditor of Jobn T. Eriend, and said assignment was void as against the plaintiff; (5) tbat tbe note and mortgage were not piirchased by tbe said Louise E. Eriend from tbe said Jobn T. Eriend for a valuable consideration paid out of ber separate estate; (6) tbat tbe *Ohippewa Valley Bank*at tbe time of tbe garnishment bad notice of tbe fact tbat tbe plaintiff claimed tbat said property was tbe property of Jobn T. Eriend, and tbat tbe assignment thereof by him to bis wife, Louise E. Eriend, was fraudulent and void as against tbe plaintiff; and tbe *Ohippewa Valley Bank*also had notice tbat by said garnishment tbe plaintiff sought to reach, levy on, and bold said property as the property of John T. Eriend; (7) tbat tbe garnishee, Louise E. Eriend,, bad no right, title, or interest in said note, check, or mortgage, or tbe proceeds thereof, as against tbe jolaintiff herein.

And as conclusions of law tbe court found, in effect, tbat the plaintiff is entitled to judgment against the *Ohippewa Valley Bank*for $841.88, with interest thereon from May 28, 1902, besides tbe costs in this action; and to judgment tbat Louise E. Eriend acquired no interest in said note and mortgage by virtue of said assignment as against this plaintiff. Judgment was thereupon entered in accordance with such findings. Erom tbat judgment tbe *Ohippewa Valley Bank*appeals.

Eor tbe appellant there was a brief by *Bundy & Wilcox,*and oral argument by *O. T. Bundy.*

They contended, *inter*alia> that as tbe garnishees were severally proceeded against (sec. 1753, Stats. 1898) tbe proceeding against each must be deemed, under sec. 2766, a separate action, and a judgment *524against one of tbem cannot operate as an estoppel against the other. *Emmons v. Dowe,*2 Wis. 358 — 360. It was error, therefore, in the action against the bank to adjudicate the invalidity of the transfer to Louise E. Eriend and attempt to divest her title. An interpleader in that action was necessary. Sec. 2610, Stats. 1898; *Emerson v. Bchwindt,*108 Wis. 167, 172.

For the respondent there was a brief by *Wickham & Fair,*and oral argument by *James Wickham.*

They argued, among other things, that where a bank has notice that funds in its hands deposited by one person are claimed to be the property of the defendant in a garnishee proceeding, and, notwithstanding such notice, pays the money over to the person who made the deposit, it is liable as garnishee. *Ferry v. Home Ban. Bank,*114 Mich. 321, 72 N. W. 181; *Bykes v. Gity Sav. Bank,*115 Mich. 321, 73 N. W. 369; *Bryant v. Wilcox*(Mich.) 100 N. W. 918; *Citizens3 Stale Bank v. Council Bluffs F. Co.*89 Iowa, 618, 57 N. W. 444; 14 Am. & Eng. Ency. of Law (2d ed.) 844; *Cregg v. F.*& *M. Bank,*80 Mo. 251; *Baynes v. Lowell I. Ben. Soc.*4 Cush. 343.

Cassoday, C. J.

It is contended by counsel that the *Chippewa Yalley Bank,*as a matter of pure accommodation, received the papers mentioned in the foregoing statement from one party, to be delivered to another, upon payment by that other of a sum of money in exchange for the papers, the bank having no interest whatever in the transaction, not even making a charge for the services. In the principal case relied upon in support of such contention, “the answers of the supposed trustee” disclosed the facts that:

> “He had been in treaty with the defendant for a cow, to be purchased if approved. No bargain had been completed, and before the time of trying the cow had expired, and before the service of the plaintiffs writ, he had notified the defendant that he should not purchase the cow and had deliv*525ered ber to liim, but tlie defendant left her in his possession, where she was at the time of the service of the plaintiff’s writ.” *Staniels v. Raymond,*4 Cush. 314, 315.

Upon such facts it was there held, in effect, that the mere possession by the garnishee was insufficient to make him liable as the trustee of the owner. It is true, as claimed by counsel, that that case has frequently been cited with approval by this court. *Winterfield v. M. & St.*P. *R. Co.*29 Wis. 589, 592; *Bates v. C., M. & St. P. R. Co.*60 Wis. 296, 301, 19 N. W. 72; *Gleason v. South Milwaukee Nat. Bank,*89 Wis. 534, 536, 62 N. W. 519; *Gore v. Brucker,*94 Wis. 65, 69, 68 N. W. 396 ; *Hussa v.*Sikorski, 101 Wis. 131, 135, 76 N. W. 1117. In *Bates v. C., M. & St. P. R. Co.*the attempt washnade by garnishment process, served in Milwaukee at 5 a. m., to reach a carload of hogs while in actual transit from Lyons in Walworth county to Chicago, and which was delivered to the consignee at 7:20 o’clock the same morning. In the *Gore*Case, *supra,*an agent of the owner of a chattel mortgage who had taken possession of the property pursuant to the terms of the mortgage, and as such agent held the same for his principal, was not, by reason of such possession, subject to garnishment in an action against the mortgagor, even though the mortgage was void as against the mortgagor’s creditors. As stated in that case:

> “The plaintiff was at perfect liberty to attach the property so in the custody of Brucker, since the same was open and tangible, and, in fact, inspected by the plaintiff’s general manager. Had the plaintiff so attached, Lapidus [the owner of the mortgages] would have had an. opportunity to assert his right as mortgagee, and to have the same determined in a proper form,”

In the *Hussa Case,*cited, the mortgagor put the money in the hands of an agent to be paid over to the mortgagee in satisfaction of the negotiable note which the mortgage had been given to secure, and it was held that such agent was merely an agent of the mortgagor to transmit the money from him *526to tbe mortgagee, wbo was tbe principal defendant in tbe action, “and was not a debtor of tbe mortgagee, nor liable as bis gamisbee.” In tbat case tbe gamisbee answered tbat be was not indebted to and tbat be bad no money or property of tbe defendant in bis possession, except $510, wbicb sum be was informed and believed belonged to bim, but wbicb was claimed by bis wife, and be asked tbat sbe be required to in-terplead, as prescribed by statute (sec. 2767, Stats. 1898), and sbe was thereupon brought into tbe action and made answer, and tbe question of tbe ownership of tbe money was determined upon such answer.

Tbe case at bar differs essentially in its facts from any of tbe cases thus relied upon. In this case tbe note and mortgage were payable to Mr. Friend. lie assigned them in writing to Ms wife. Tbe note, mortgage, and assignment, with a satisfaction of tbe same signed by Mrs. Friend, were placed, in tbe *Chippewa Valley Bank*for collection. Tbe mortgagor caused a check for tbe amount due on tbe note and mortgage, and payable to tbe order of tbe *Chippewa Valley*Bank, to be delivered to tbat bank in payment of tbe note and mortgage. In tbat condition of things tbe garnishee summons was served. Tbe *Chippewa Valley Bank*thereupon drew tbe money on tbe check and paid it over to Mrs. Friend, and delivered tbe other papers to tbe mortgagor, notwithstanding tbe allegation in tbe garnishee papers tbat tbe note and mortgage and tbe money due thereon were tbe prop•erty of and belonged to Mr. Friend, and tbat the plaintiff would so maintain notwithstanding its answer. Tbe real controversy was whether such property belonged to Mr. or Mrs. Friend. Instead of submitting tbe facts to tbe court and thus relieving itself from all liability, it assumed tbat such property belonged to Mrs. Friend, and hence denied being indebted to or having in its possession or under its control any property whatever belonging to Mr. Friend.

*527Our statute prescribing tbe liability of a garnisliee is mucb broader than the Massachusetts statute, and declares that:

> “From the time of the service of the summons upon the garnishee he shall stand liable to the plaintiff to the amount of the property, moneys, credits and effects in his possession or under his control belonging to the defendant or in which he shall be interested to the extent of his right or interest therein, and of all debts due or to become due to the defendant, except such as may be by law exempt from execution. Any property, moneys, credits, and effects held by a conveyance or title *void as to the creditors*of the defendant shall be embraced in such liability.” Sec. 2768, Stats. 1898.

The language thus quoted has been in force ever since the revision of 1878. The last sentence thus quoted was, by way of amendment to the prior statutes, added by that revision, so as “to expressly cover property held in fraud of creditors.” Revisers’ Notes, 1878. This court has repeatedly declared that the words thus added, in connection with other provisions of the statutes cited, “clearly evince a purpose to make the remedy by garnishment as effectual in reaching nonleviable assets, things in action, evidences of debt, credits, and effects, and in fact any property held by any sort of conveyance or title void as to the creditors of the principal defendant, as the old creditors’ bill in chancery. Such is the logical result of previous decisions of this court.” *La Crosse Nat. Bank v. Wilson,*74 Wis. 391, 398, 43 N. W. 153; *Bloodgood v. Meissner,*84 Wis. 452, 456, 54 N. W. 772; *Bragg v. Gaynor,*85 Wis. 468, 485, 55 N. W. 919; *Spitz v. Tripp,*86 Wis. 25, 28, 56 N. W. 330; *Jones v. Alford,*98 Wis. 245, 251, 73 N. W. 1012; *Dahlman v. Greenwood,*99 Wis. 163, 167, 74 N. W. 215; *Stannard v. Youmans,*100 Wis. 275, 279, 280, 75 N. W. 1002. The case presented comes within the comprehensive language of the statute quoted.

Counsel argues that to hold a bank liable as such garnishee *528is a great annoyance and obstruction to business. But tbat is a question for tbe legislature, and not for tbe courts.

2. It is true tbe two garnishees were severally proceeded against — Mrs. Eriend, as claiming to be tbe owner of the-note and mortgage and tbe proceeds of tbe check; and tbe bank, as the receiver and disposer of tbe property as mentioned. In such case tbe statute expressly declares tbat “any number of garnishees may be embraced in tbe same affidavit and tbe summons” therein “provided for.” Sec. 2753, Stats. 1898. No joint judgment was rendered in tbe action. No interpleader was necessary, since both claimants of tbe property were parties to tbe proceedings — Mrs. Eriend as garnishee; and Mr. Friend as principal defendant. *Look v. Brackett,*74 Me. 347.

3. Error is assigned because tbe *Chippewa Talley Bank*was adjudged liable for interest on tbe $844.88 from tbe date of garnishment, May 28, 1902, to tbe entry of judgment in tbe gamishee proceeding, April 11, 1904. Tbe judgment in tbe original action was not rendered until April 18, 1903. Until that time tbe plaintiff bad no right to tbe money. Tbe statute quoted only made tbe garnishee liable for tbe amount of moneys, etc., in its possession at tbe time of garnishment, but is silent as to interest. As soon as the judgment was entered in tbe original action, however, tbe plaintiff, as shown by tbe result of tbe trial, was entitled to tbe amount so found to be in tbe possession of tbe garnishee. For any delay after tbat time tbe plaintiff is entitled to compensation by way of damages for such delay. *J. I. Case P. Works v. Niles & Scott Co.*107 Wis. 9, 17, 82 N. W. 568; *McCall Co. v.*Icks, 107 Wis. 232, 241, 83 N. W. 313; *Hansen v.*Allen, 117 Wis. 61, 66, 93 N. W. 805.

4. There was no error in tbe trial court allowing costs against tbe garnishee. Upon tbe findings of tbe court tbe statute expressly authorized judgment for costs against tbe garnishee. Sec. 2772, Stats. 1898.

*529*By the Oourt.*— Tbe judgment of tbe circuit court is hereby modified and reduced so as to entitle tbe plaintiff only to recover judgment for $844.88, and interest thereon from April 18, 1903, and, as so modified and reduced, tbe same is affirmed. No costs are allowed in this court to either party, except tbe plaintiff must pay tbe clerk’s fees.