Court Opinion

ID: 7985520
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:25:02.916521+00
Date Added: 2024-06-11T16:35:11.442029
License: Public Domain

George. J.,
delivered the opinion of the court.
In November, 1866, Murdock, the plaintiff in error, recov*417«red a judgment in attachment against W. A. Shaw as principal debtor, and against T. E. Daniel as garnishee, for the sum of $334.69. The judgment in attachment was rendered by default against Shaw as a non-resident,|upon proof of publication only. In July, 1867, T. E. Daniel, the garnishee, through his agent, paid this judgment and the interest, and took from Murdock an instrument in which Murdock acknowledged the receipt of the money, “ which sum he agreed to make good to T. E. Daniel in payment of his indebtedness, for that amount, to W. A. Shaw.”
Daniel was indebted to Shaw in the sum of $1,901, principal. In December, 1870, the assignee of Shaw sued Daniel on this debt for $1,901, and Daniel’s defence to the suit, based on the payment of the debt to Murdock, was disallowed, upon the ground that Murdock had not given the bond required by sect. 1479 of the Code of 1871, conditioned to restore the money if the defendant in attachment would appear and disprove the debt within a year and a day. The executors of Daniel brought this suit against Murdock upon the instrument hereinbefore set out, to recover back the money acknowledged to be paid, and claim that by the terms of the instrument Murdock is bound to refund it.
It will be noticed, that Murdock was not a party to the suit between Shaw’s assignee and Daniel, in which;the credit was disallowed ; nor does it appear that he was notified of its pendency. He is, therefore; not bound by the judgment rendered in it. The undertaking of Murdock, in the receipt given for the money, was not to secure from Shaw or his assignee a credit on the debt sued on, but was a guarantylto Daniel that the payment was a valid discharge of the debt pro tanto, and if it were not, that he would make it good. Under this guaranty Daniel was bound, if sued, to set up the defence, and if valid, sustain it, or to notify Murdockfof the pendency of the suit, and give him an opportunity of making the defence. He did not give the notice; and he is therefore bound to show not only that he made the defence, but also that *418the defence could not legally be made effectual. That the Circuit Court decided against this defence is not sufficient, if in fact the decision was wrong. This brings us to the inquiry as to the effect of a voluntary payment made by a garnishee in a case like this.
It is insisted by the defendants in error that the payment is utterly void, and could not have been made effectual in any way, as no bond was given as provided for by the statute. We do not agree with this view. The judgment by default in attachment, though on service by publication only, is not void, and the judgment against the garnishee is good and valid. This last judgment operates as an assignment to the garnishing creditor of the debt due by the garnishee. The plaintiff in attachment thus became the owner of the debt due by the garnishee, but without power to enforce collection until he had provided the security required by the statute for the restoration of the money in case this judgment and assignment should afterwards, within the time limited, be avoided by disproof of the debt upon which the attachment was based. Sect. 1479 of the Code of 1871 provides simply that the plaintiff in attachment, before any sale of the defendant’s property shall be made, or before execution shall be issued against the garnishee, shall enter into bond, with good security, conditioned to restore the money if the defendant shall within a year and a day come into court and disprove or avoid the debt. And the statute further declares that any sale made without such bond being given shall be utterly void. This, statute applies only to judgments in attachment proceedings where the defendants have not been served with process nor appeared, and therefoi’e, presumably, have had no opportunity of making defence. Its purpose is to secure them this opportunity within the time limited. The giving of the bond to restore the money was therefore made a condition precedent to a forced sale, which would divest the defendant’s title to his property seized under' the attachment. The statute also prohibits a levy and sale of the garnishee’s property until after *419such bond shall be given. It protects the garnishee from a. compulsory payment by a sale of his property; but it does-not apply in terms to a voluntary payment made by the garnishee. As to such payment, the garnishee is left free to act-as he may choose. If he choose to pay, then, if it be held that-such payment is valid for all purposes, the defendant in attachment would be deprived of his right to collect the debt, from the garnishee, even though he should disprove the debt for which he was attached. This, though not against the express words of the statute, would be against its plain equity. If, however, it be held, as we think is the true rule, that such payment is only provisionally good, subject to be annulled in case the attachment debtor should disprove or avoid the debt on which the attachment is based, then the rights of the defendant in the attachment, which we recognize as within the equity of the statute, are fully protected. The attachment debtor may consent to or dispute the payment. If he consent, the rights of all parties are settled. If he dispute it, he can bring his action against the garnishee to recover the debt due, as if there had been no payment. If the garnishee plead the judgment against him and its voluntary payment, the attachment debtor will then have the opportunity to show its invalidity by disproving or avoiding the debt upon which the attachment was procured. This rule preserves the rights of all the parties, and secures to the defendant in attachment the opportunity of disproving the debt upon which he was attached. It secures to the. garnishee the right which belongs to all debtors, to discharge their debts when due. Payment by the garnishee does not, like a judicial sale, destroy or change the title of the debtor in attachment. If his estate- be' sold, and no bond be given to restore the proceeds, as required by the statute, he has been deprived, if the sale be held valid, of his property by proceedings under a judgment of which he-had no notice, and deprived also of the opportunity secured by the statute of disproving within a year and a day the-alleged debt against him. He is utterly without remedy-*420Hence the statute has declared such sale without bond to be utterly void. The case is far different with reference to a voluntary payment by the garnishee. Such payment changes no title ; nor does it put the defendant in attachment — the creditor of the garnishee — in a worse, but in a better position than if the bond had been given. In the latter case he would only be allowed to disprove the debt within a year and a day, .and failing for that time, his remedy would be forever gone. In the case of voluntary payment, his claim being a chose in action, and reducible to possession and enjoyment by suit only, we allow him, at any time whenever he may bring such suit, to disprove the debt for which he was attached, and thus avoid the effect of the payment on his rights. It is true that, until the bond is given, it is doubtful to whom the garnishee may validly pay, and he is allowed to refuse to pay until the doubt is removed. Hence the statute protects him from compulsory collection by the attachment debtor,, by prohibiting the issue of an execution against him and declaring a sale of his property under such execution void. If, however, he make voluntary payment to one of two claimants of the debt, there is nothing in the words of the statute or in its policy to prevent him from taking the risk that he pays to the right party, and if it turns out that he has paid the true creditor, then to allow the payment to be valid.
This view disposes of the case as presented in the record, and it is therefore unnecessary to express an opinion on the other questions raised and discussed by counsel.
The judgment is reversed and a new trial granted.
In response to suggestions of error in the foregoing opinion, presented by the counsel for the defendants in error, the court made an addendum to the opinion, in which the suggestions of error are indicated and answered, as follows : —
George, J.,
responding for the court.
It is urged in the suggestions of error filed by counsel for *421the defendants in error that the payment was not even provisionally good, because it appeared that Shaw had assigned the debt to White before the attachment proceedings. But it is also shown that Daniel, the garnishee, knew nothing of the assignment at the time he made payment. As against theassignee, the payment would have been good if the refunding bond had been given. This is not denied, and it is also made good by our statute. The failure to give the refunding bond did not aifect the assignee's interest. The bond was not intended to protect him. It was solely for the benefit of the defendant in attachment, and we have shown that, as against him, the payment was provisionally good.
It is urged also that the judgment against the garnishee on which the credit was disallowed is at least prima facie evidence that the disallowance was rightful. The judgment was purely, as to Murdock, res inter alios acta, and was not evidence against him for any purpose except to show its own rendition. The right reserved to the defendant in attachment by the bond to restore, was a right to disprove or avoid the debt. This imposed affirmative action on him, and we hold that in the suit against the garnishee he must do exactly what he would have been compelled to do if the bond had been given and he had come into court to avoid the judgment.