Case Name: Knisely v. Evans
Court: Supreme Court of Ohio
Jurisdiction: Ohio
Decision Date: 1877-12
Citations: 34 Ohio St. 158
Docket Number: 
Parties: Knisely v. Evans.
Judges: 
Reporter: Ohio State Reports, New Service
Volume: 34
Pages: 158–163

Head Matter:
Knisely v. Evans.
"Where a negotiable promissory note is transferred by indorsement, after maturity, the legal title is thereby vested in the indorsee; and, after such indorsement, the amount due on the note can not be garnisheed in the hands of the maker, whether he has notice of the transfer or not, as a debt due to the original holder.
'Error to the District Court of Tuscarawas county.
The original action was brought by Nathaniel W. Evans, the defendant in error, as indorsee of a promissory note, .against Elias Knisely, the plaintiff' in error, as maker of the note. The note was executed by Knisely on the 14th •day of June, 1872, and was payable one day after date to Harrison P. Arnold, or order, for four hundred and four dollars and seventy cents.
On the 20th of the same month the note was indorsed .-and delivered to Evans by the payee, Arnold.
The issues in the cause were submitted to the court for ■trial.
The following extract from the record shows the findings •of the court, both as to the facts and law arising in the case:
“ And the court having heard the testimony, and one of the parties having requested the court to state in writing the conclusions of fact found, separately from the conclusions of law, with the view of excepting to the decision of the court upon the questions of law involved in the trial, states the conclusions of fact as follows, to wit: That the -defendant, Elias Knisely, did, on the 14th day of June, a. d. 1872, make and deliver his negotiable promissory note — a copy of which is set out in the petition of the plaintiff — to one Harrison P. Arnold; that on the 20th day of June, a. d. 1872, between the hours of 11 o’clock a. m. and 1 o’clock p. M. the plaintiff, Evans, purchased the note from Arnold, .giving therefor one hundred dollars in money, and cancelling the indebtedness of Arnold to him for two hundred dollars for money before that time by him lent to Arnold, and forty-■two dollars for goods before that time sold by him to Arnold, and that Arnold then indorsed and delivered the note to the plaintiff — a copy of the indorsement being set out in the petition of the plaintiff. That on the 20th day ■ of June, A. D. 1872, at 9 o’clock p. m., the defendant, E. Knisely, was served with a copy of an order of attachment and garnishee notice, issued by John Albaugh, a justice of the peace in and for Goshen township, Tuscarawas county, Ohio, at the suit of -Hummell & Brother against said Harri son P. Arnold; that E. Knisely, on the 27th day of June, a. d. 1872, in pursuance of said notice, appeared before said justice and answered as garnishee, admitting his indebtedness to said Arnold upon said promissory note; that the justice afterward, on the 6th day of August, a. n. 1872, to which time said action had been continued by said justice for service of the said Arnold by publication, made an order that Knisely should pay to the justice so much of his said indebtedness as would pay the claim of Hummell & Brother against Arnold, to wit, the sum of $218.75; and that afterward, to wit, on the thirtieth day of August, a. d-1872, pursuant to said order, Knisely did pay to the justice the sum of $218.75, which was applied to the satisfaction of the judgment rendered by the justice in the action of Hummell & Brother against Arnold, in which the order of attachment had issued; and that Knisely down to, and at the time of, the payment of' said money by him to the justice had received no notice that his said note to Arnold had been indorsed, and transferred to the plaintiff, or any other person.
“And as conclusions of law upon the facts so found the court states as follows, to wit; That said promissory note was overdue when the same was so indorsed by Arnold to Evans, on the 20th day of June, A. d. 1872; that as against the plaintiff, Evans, the defendant, Knisely, is entitled to be credited as for a payment upon said promissory note, with said sum of $218.75, so paid by him to the justice in said attachment proceeding, as of date of August 30, 1872.”
Whereupon, the court, after crediting on the note the amount so paid by Knisely, rendered judgment in favor of Evans, for the l’esidue.
On petition in error, prosecuted by Evans, the district court reversed the judgment of the court of common pleas, and rendered judgment in his favor, for the full amount of the note.
The object of the present proceeding is to obtain the reversal of the judgment of the district court, and the affirmance of that of the court of common pleas.
Hanee O'Donnell, for plaintiff in error.
Charles H. Kibler, for defendant in error.

Opinion:
"White, C. J.
We see no error in the judgment of the district court.
Whether Knisely, the maker of the note, is entitled, as against Evans, to be credited with the payment made by him as garnishee, depends upon the effect of the process, of garnishment with which he was served in the attachment proceeding of Hummell & Brother against Arnold,, the payee of the note.
The answer to this question is to be found in the statute-under which the proceedings in attachment were had.
But before referring to the statute, it will be well to understand the relation of the parties to the note.
The note was negotiable, and was indorsed to Evans, for value, after maturity. The fact, however, that it was overdue, did not destroy its negotiability. It was still competent for Arnold, the payee, to invest Evans with the full, legal title, by indorsement.
The effect of the indorsement was to make the indorsee,, instead of the payee, the creditor of the maker. Erom the time of the indorsement and delivery, the relation of debtor and creditor arose between the maker and Evans,, and ceased between the maker and Arnold. Nor, in the-absence of statutory requirement, is the indorsee bound to-notify the maker of the indorsement, in order to perfect-his title. Baxter v. Little et al., 6 Met. 10; Davis v. Miller, 14 Gratt. 1.
In order to obtain the process of garnishment, the code- (§ 200) provides, that " when the plaintiff, his agent or attorney, shall make oath, in writing, that he has good reason to, and does, believe, that any person or corporation, in said affidavit named, has property of the defendant in. his possession (describing the same), if the officer can not get possession of such property, he shall leave with such garnishee a copy of the order of attachment, with a written, notice that he appear in. court and answer, as provided in section two hundred and fourteen."
By section two hundred and fourteen, the garnishee is required to answer, under oath, all questions put to him touching the property, of every description, and credits of the defendant, in his possession or under his control, and is required to disclose truly the amount owing by him to the defendant.
Section two hundred and five declares that the order of attachment binds the property attached from the time of service, and that the garnishee shall stand liable to the •plaintiff in attachment, for all property, moneys, and credits in his hands, or due from him to the defendant, from the time he is served with the written notice.
Erom these provisions, it is apparent that the process of .garnishment could only operate on what Knisley, the garnishee, might bo owing Arnold, the defendant in attachment, at the time of the service of notice. Prior to this -service of notice, the note in question had passed, by indorsement, to Evans. There was, therefore, at the time •of service, nothing owing by Knisely to Arnold, as respects the note, to be garnisheed.
The fact that Knisely, in answering as garnishee, admitted that he was still indebted to Arnold, can not prejudice Evans. The latter was no party to the proceeding, -and is not concluded by it. The answer of Knisely was •doubtless unadvisedly made. Before answering as he did ^and submitting to judgment, he ought to have informed himself whether Arnold still held his note. He admitted •to be true what was not true in fact; but he can not visit the consequence of his mistake upon Evans, who was in no •way privy to its commission.
It is claimed by counsel for plaintiff in error that the defense is authorized by section three of the act relating to negotiable instruments. 1 S. & C. 862.
The section provides, in respect to promissory notes, that if the indorsee of a note indorsed after maturity shall institute an action thereon against the maker, the defendant shall be allowed to set up the same defense that he might have done, had the action been instituted in the name and for the use of the person to whom the note was originally made payable.
Without undertaking now to define the scape of the operation of this section, it is sufficient in the present case, to say, that independent of the process of garnishment, the payment by Knisley 'to Hummell & Brother would have constituted no defense to an action instituted on the note by the payee himself. And, as already shown, the process of garnishment constitutes no defense, for the reason that, .at the time of service, the garnishee was not indebted to Arnold, the defendant in attachment, the note having previously been indorsed and delivered to Evans.
Judgment affirmed.