Daily globe. [volume] (St. Paul, Minn.) 1878-1884, 1878-04-02
SUPREME COURT.
DECLsION or CASE FILED YEsTER-
DAY.

. -
DEcLsION or CASE FILED JESTER
Cis0rtes A. DeGraf and William Crooks,
s $. partners Of the late firm Of De-
GRAFT d Co., Respondents vs. 1he First
Osoasion Of the st. Paul and Pacific
Ras1road Co., Defendants, and Horace
Thompson, Edmund Rice smpleaded Nth
John s. Kennedy, TRUSTEES Gaynishee.
appellants.
SYLLABUS.
party who obtains possession of a definite
sum OF money belonging to another which he
has no right in justice or equity to retain may
be garnisheed as his debtor for such sum by a
creditor of the latter. By the terms of each of
three mortgages given by the defendant COM
Pany upon its railroad land and franchises, the
Tolls, moneys, rents, issues and profits were in
Guided as part of the mortgaged property.
1t was also stipulated in each that ssall the
current net earnings and moneys of said rail
road after deducting current expenses and pay
ing interest on certain bonds secured by prior
liens should be appropriated and used from
1lme 10 Tune, II necessary, in the payment of
the interest on the bonds secured by such mort
gage" that on default in the payment of in
terest for the period of six months, the mort
gagees or trustees might center into possession
of the road and mortgaged property, and col
lect and receive all the tolls, profits, moneys,
rents, issues and profits Of the same, and oper-
ate the road for the benefit of the bondhold-
| ers, but it was also provided ssthat until de-
fault in the payment of the principal or
interest Of the bonds thereby Sc
cured, the mortgagor company should
be permitted to possess manage and
operate the road. and take and use the
rents, moneys profits tolls, issues thereof in the
same manner and with the same effect as if the
mortgage deed had never been made" Held
The income of the road acquired by the com
pany during the continuance of its possession
and operation of the same belonged to the COM
pany as its property, and if the mortgages took
possession of such income without the consent
of the company, the same could be reached by
garnishee process in favor of the company's
creditors.
OPINION.
Assuming that appellants at the time they
took possession of the road and franchises
made the mortgages had no legal right al
mortgages to take and appropriate any portion
of the road then on hand without the consent o.
authority of the company their liability a. gar
nishees in respect to the $42, 618.04, would seen
to follow from the facts indisputably evidenced
by the disclosures, and if their liability exist.
to this extent there is no occasion to conside
any of the questions raised and discussed il
respect to the $4,000 claim, inasmuch as tn,
sum thus subjected to punishment is NOR,
than sufficient to satisfy and discharge tn,
Judgment Of plaintiffs. Under the statute tn,
right of garnishment is given to contrac
creditor, whenever it is properly made to ap
pear that the garnishee is indebted to tn
debtor of the former, or has property, none,
or effects in his hands, or under his control
belonging to such debtor, exceeding in amour
and value the sum fixed by statute. (Gen
, Statutes oh. 66, art. 10, sec. 147.) These an
pellants were debtors of the defendant com
pany, within the meaning of this statute, il
respect to this sum Of $42,61s.04, at tn
time of the punishment. The fact
established by the disclosure beyond an,
! reasonable doubt are that the appellants a
mortgage trustees, under three several mort
/ cages, and solely by virtue of their authorit
ant companys railroad property, and tn
franchises Herewith connected, on the 9th da
J of October 1876, and thereafter operated an
used the same as such trustees. At this tim
! the company was, as it had heretofore been i
the actual possession and enjoyment Of its sal
o railroad and property, the lawful owner
! with J. T. Farley as It's general manager an
). Bottsford as its treasurer; and there then re
NAMED in account upon the books of the CON
! ! pany, which were then balanced of unexpende
! income and earnings Heretofore, acquired
9 balance of $42, 618.04 which then belonged t
/ the company, and was in the hands of its sal
8 treasurer When the trustees thu
took possession, the said Earle
thereupon became and thereafter continued
be the general manager of the trustees, and tn
said Bottsford also became and continued the
treasurer, and all their subsequent acts in re-
8 erence to the company's funds then in til
possession of it's treasurer in respect to all re,
enues afterwards earned in operating the roa
were done solely under the direction and al
g thority Of said trustees, and as their officers
acting solely as treasurer for said trustees. an
= by their order and that of their general man.
7 ger, and without any direction or authorit
. whatever from the company or any of its off
: GERS, the said Bottsford Immediately upon th
Q said trustees taking possession turned over t
s them said moneys SO in his hands belonging
g the company, by transferring the same to th
. new account which he as their treasurer the
; opened and afterwards kept. and whic
contained a full entry of all their re
l ceipts and disbursements as trustee
in connection with said road. The only groun
upon which the trustees made any claim to tn
: transfer OF This money was their supposed lega
right thereto as trustees, under the stipulation
contained in the mortgages. This sum s
! transferred to the account of the trustees, tc
!. gether with the subsequently acquired earning
of the road, constituted common fund fror
which the current expenses incurred by Their
in operating the road were paid. under thei
directions There was also paid from thi
fund, under like directions, after the trustee
so took possession of the road, and before tn
garnishment in question, certain debts cor
tracted by the company in operating the roa
. prior to October 9th, 1876 in the aggregat
: equal to, if not exceeding, the said sum o
$42, 618.O4, but these debts were assumed an
paid voluntarily by the said trustees, an,
their treasurer, without any authority o
direction whatever from the company
or any of its officers. OF this generalIfund, ther
was in the hands of the treasurer of the trus
tees a alance on the 18th of November, 1876
of $18, 96617, and on the 22d of November, 1876
of $50, 242.07. The garnishee simmons wa
f served on Rice and Thompson November 10th
1876, at which time it does not definitely appea
what balance remained, nor is it at all import
ant, in the view of the case taken by the court
Upon these facts, leaving out of sight for til
present the voluntary payments of the debts o
J the company by the trustees, and their effects
if any, upon the latters liability, it is clear,
2 the trustees had no rightful claim upon th
money in question under the mortgages, tina
they had no legal or eqitable right to retain q
use it for any purpose. Having acquired
, through a mistake as to their legal rights, an
having no right conscientiously to retail
) it, cause of action at ono