Court Opinion

ID: 7883733
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:37:05.613313+00
Date Added: 2024-06-11T16:31:40.942755
License: Public Domain

*26The opinion of the court was delivered by
Valentine, J.:
1. Interpleader. That an action in the nature of a “Bill ■ of Interpleader” may be maintained under our system of practice, whenever a proper case is made therefor, and whenever the plaintiff has no other adequate remedy, wehave no doubt. And we think the action may be maintained whenever the plaintiff has no adequate remedy in the nature of an action at law. The first and main question then for our consideration is, whether a proper case for interpleader has been made out in this particular case. Involved however in this main question are several minor questions, which we shall consider as we proceed. The court below decided upon various demurrers to the petition that the petition did not state facts sufficient to constitute a cause of action as against any of the defendants. And this petition in error is now instituted for the purpose of having that decision reversed. Now, if the petition in the court below did state facts sufficient to constitute a cause of action in favor of the plaintiff and against any two or more of the defendants, the decision of the court below must be reversed as between the plaintiff and those two or more defendants.
s. Equitable remedies. *27s. when inter-proper. *294 concurrent remedies. *26The action of interpleader is undoubtedly an equitable remedy, and for that .reason principally it cannot be maintained in any case where the party seeking it has another plain and adequate remedy in the nature of an action at law. Indeed, as a rule the action of interpleader cannot be maintained where another plain and adequate remedy has been given by statute; for as a rule, the remedy given by statute is considered as a legal remedy, in contradistinction to an equitable remedy. But the remedy given by statute may sometimes be an equitable remedy, and when it is, then it does not supersede some other previously-existing equitable remedy unless it has been expressly so enacted, but the second remedy is merely cumulative, and the two remedies are in effect concurrent. There never has been any rule in equity that we are aware of requiring a party to *27resort to one equitable remedy in preference to some other equitable remedy where the two remedies are equally applicable to the facts constituting the cause of action or defense, and where both are equally available to the parties; and we think no such rule has ever existed. In the present case the plaintiff is a school district. It employed the defendants Clark & Co. to build a school-house. Clark & Co., with the assistance of several sub-contractors, built the school-house, The school-house now owes Clark & Co., the contractors, $793.38J. This amount does not seem to be disputed. Clark & Co. claim the whole of it. Other defendants claim the same or portions thereof by virtue of being sub-contractors who furnished labor and materials for the school-house, and by virtue of having mechanic’s liens thereon. Other defendants claim said fund, or portions thereof, by virtue of being creditors of the contractor, and by virtue of garnishment-liens obtained in attachment proceedings against him in a j ustice’s court. And still another defendant claims the larger portion of said fund by virtue of a garnishment-lien obtained in the district court before a judge pro tem. in a proceeding in aid of execution. Clark & Co., (the contractors,) claim directly from the school district. All the other defendants claim under and through Clark & Co., except as to a portion of Trimmer & Thompson’s claim, of which we shall speak hereafter; but each defendant claims that his right to said fund is paramount to that of any other defendant. The amount which the defendants claim in the aggregate is vastly more than the plaintiff owes to Clark & Co., and therefore the plaintiff could not well pay the claim of any one of the defendants without great hazard to itself. For the purposes of this case, we shall assume that mechanic’s liens may be taken upon school-houses, and such other public buildings. Also, for the purposes of this case, but without expressing any opinion thereon, we shall assume that the action of interpleader does not lie in favor of the owner of a building to compel the holders of mechanic’s liens thereon, (contractors and sub-contractors,) to interplead with each other, .and with *28the contractor, and thereby have determined the extent and priority of their respective liens. And yet there may be cases where the action ought to lie. Under our statutes a promissory note may be given for the amount covered by the mechanic’s lien. (Laws of 1871, page 253, § 1; Laws of 1872, page 294, § 1.) And in such a case it is not necessary for the holder of the note to commence an action to enforce the lien until after the note becomes due, (Laws of 1872, page 297, §4,) although the note may not become due for ten or twenty or any other number of years. Now suppose that there are twenty or more sub-contractors holding notes for various sums due at various times, and the aggregate amount of these notes is vastly more than the owner of the building owes the contractor, or js liable for to the contractor and sub-contractors taken together. And suppose the contractor disputes all these notes, and that each sub-contractor claims that his own note is valid, unpaid, and secured by a lien upon the building, but disputes the notes and supposed liens of all the others. Suppose also that it is claimed that some of the notes were not given for labor or material furnished for the building; that some of them were obtained fraudulently; that some of them are paid; that some of the supposed liens were obtained irregularly, or fraudulently; that some of the holders of the notes are not the real owners of the same, etc.; and suppose the holder of each note intends to contest the lien of every other holder of a note: must the owner of a building keep his money five, ten, fifteen, or twenty years, until some one is ready to sue him, although his debt to the contractor is all the time due and drawing interest, which interest he will eventually have to pay? The action or defense given by the mechanic’s-lien law, and by § 43 of the civil code, is hardly an adequate remedy in such a case, f For the purposes of this case, and for that only, we shall also assume the following, to wit: lst.-A party who has a debt coming to him secured by a mechanic’s lien, may abandon or waive the mechanic’s lien, commence an ordinary action for the debt, sue out an attachment, and garnish any debtor of his debtor. 2d.-A garnishment-lien may be ob*29tained upon a fund already subject to a mechanic’s lien held by some other person, but of course the mechanic’s-lien will remain prior in right to the garnishment-lien. 3d.-When a party has two claims, one of which is secured by a mechanic’s lien and the other is not, he may sue out an attachment and garnish a fund subject to said mechanic’s lien, and to various other mechanic’s liens held by other parties, to secure one or both of his said claims. But in such a case he of course waives his mechanic’s-lien unless he commences a regular action to foreclose the same. We shall also for the purposes of this case assume, (and this is probably a correct assumption,) that a garnishee cannot require an attaching-creditor and the debtor (his creditor) to interplead with each other as to who shall receive the amount due from the garnishee to the debtor. And yet, if there were other persons claiming to hold prior liens on the fund due from the garnishee to the debtor in attachment, the only adequate remedy for the garnishee to protect himself from these conflicting claims would be an action of interpleader. The garnishment-lien attaches when the garnishee is served with notice, (Gen. Stat., 667, §206; id., 787, §51,) and continues until the attachment is dissolved, or the plaintiff’s claim is satisfied; and there is no provision for the determination of the extent, force, validity, or priority of this kind of lien in an action to foreclose a mechanic’s lien. (Laws of 1871, page' 255, § 5.) Indeed, the garnishee in such a case would have no adequate remedy except by the action of interpleader. And hence in such a case the action would lie. It is claimed however that § 43 of the civil code furnishes an adequate remedy. We do not think so. Under that action the holder of the fundis not entitled to any remedy until he jg gue(j^ an<j commencement of the suit may be postponed almost indefinitely. If the holder of the fund has no remedy except the one given to him by §43 of the civil code he may be compelled for an almost indefinite period of time to hold said fund always ready to pay the same to the person entitled thereto, and to pay it at any *30time when called upon with accumulated interest, although the holding of the same may be no benefit to him. His debt due to the contractor, in a case like the one at bar, does not stop drawing interest because others have obtained supposed liens thereon. Sometimes undoubtedly the remedy given by said § 43 of the code is an adequate remedy; but even then we do not think that the legislature intended that it should take the place of the action of interpleader. In such cases it was probably intended that the two remedies should be concurrent. Such seems to be the opinion of Mr. Wait as he gathers it from the New York authorities. (1 Wait’s Practice, 166, 167, 174. The remedy given by §43 of the code, as applied to cases like this, is in its nature an equitable remedy; and we know of no rule that requires that one equitable remedy should supersede or take precedence of another equitable remedy where both are equally applicable to the case. But it is claimed that the plaintiff in this action (the school district) had already been sued by the defendants Trimmer & Thompson, and that therefore the plaintiff as defendant in that suit had a right under said §43 of the code to have all the other parties brought in and have them interplead as to who should receive said fund, and as to how much each should receive; and therefore, that the plaintiff had another adequate remedy. But if this were true, still the remedy given by said section is an equitable remedy as applied to this case, and therefore the plaintiff still had no adequate remedy at law. But it cannot be that said section was intended absolutely to supersede the action of interpleader, even in a case like the one at bar. If such were so it would lead to insuperable difficulties in practice. Suppose that twenty or more different persons should each claim to be entitled to a particular fund, and suppose that one of these persons should sue the holder of the fund for the recovery of the same, and should in the same suit set up twenty or more separate and distinct causes of action and ask judgment on the whole of them: would the holder of the fund be bound to forego his action of interpleader, and in its stead resort to his remedy under *31said §43 of the code? Would he be bound to bring in as co-defendants with himself all the adverse claimants to said fund, and have them litigate their right to said fund while he was at the same time in the same suit on the same trial litigating with the plaintiff the questions arising in the other twenty separate and distinct causes of action in. which himself and the plaintiff alone were interested? But suppose there were various other persons, not claimants to said fund, but interested in the subject-matter of some one or more of these various other causes of action set up by the plaintiff against the defendant: must these other persons also all be brought in so that their claims m,ay also all be determined in this same suit? And so on, ad infinitum.' Each of these different causes of action set up in said petition may be concerning a fund, to each of which there may be twenty or more different claimants. Now suppose that each adverse claimant to one of these funds should commence an action against the holder thereof at about the same time: would the holder be bound under said § 43 to bring in all the adverse claimants into each suit, or could he bring them into one suit only and have the other suits enjoined? And if- he could bring them into one only, and have the others enjoined, into which should he bring them, and which should he have enjoined? If these suits were brought in various counties, or in various courts, they could not well be consolidated. Or if there were various other matters to litigate in each one of these suits they could not well be consolidated, although they might be brought in the same court. Now if it be agreed that the holder of the fund may enjoin the litigation concerning this fund in all the suits but one, why not in that one too, and allow him to bring an original action divested of all extraneous matters, and have it determined in that-action to whom the fund belongs? After a careful consideration of the whole question we have come to the conclusion that wherever under the former chancery practice a bill of interpleader would lie, an action in the nature of a bill of interpleader will now lie.
With respect to a portion of Trimmer & Thompson’s claim *32it would seem that the school-district has made itself absolutely liable; or at least Trimmer & Thompson so claim; and .hence with respect to this portion of said claim the action of interpleader will not lie. This portion of said claim must be litigated in another suit.
5. Order of judge, and justice, not a judgment. There are two other questions involved in this case. First; Is an order of a judge pro tem. of the district court in a proceeding in aid of execution, under §490 of the civil code, that a garnishee shall pay over to the judgment-creditors certain money which the garnishee owes to the judgment-debtor, a final determination of the liability of said garnishee to pay said money to said judgment-creditor? Second: Is an order of a justice of the peace in an attachment proceeding pending before him under §42 of the justices act, that a garnishee shall pay into court certain money which the garnishee owes to the defendant in the action, a final determination of the right of the plaintiff in the action to said money? We must answer both of these questions in the negative. Neither of said orders is a judgment. The making of them is not an adjudication between the parties. It does not determine their ultimate rights. It simply gives to the creditor the same right to enforce the payment of the money from the garnishee that the debtor previously had. It is in effect only an assignment of the claim from the debtor to the creditor. The creditor gains no more or greater rights than the debtor had, and the garnishee loses no rights. And the payment of the money can be enforced from the garnishee to the creditor only by an ordinary action. It is not necessary that an order under § 490 of the civil code be made by the court, as a court. It may be made by a judge of the court, at chambers; and in the present case it was made by a judge pro tem. Now can it be possible that a proceeding for the recovery of money may be determined finally, without parties plaintiff or defendant, without pleadings, before a judge at chambers, and without a jury? Final jurisdiction is always conferred upon courts, and not upon judges at chambers. Besides, in proceedings for the recovery of money a man’s *33rights can be determined against his will only by a jury. “The right of trial by jury shall be inviolate.” (Constitution, Bill of Eights, §5.) And no legislative act can abridge or impair that right. But suppose said order is an adjudication, a final determination of the rights of the parties: then there should be some way of directly enforcing it — either by execution against the property of the garnishee, or by imprisonment of his person. Now, it has already been decided in this court, and well decided as we think, that an execution is not allowable in such a case. (Arthur v. Hale, 6 Kas., 161, 165.) And we think it is equally clear that the order cannot be enforced by imprisonment of the garnishee. (Union Bank of Rochester v. Union Bank of Sandusky, 6 Ohio St., 254; Edgarton v. Hanna, 11 Ohio St., 323; Welsh v. Railroad Co., 11 Ohio St., 569.) “No person shall be imprisoned for debt except in case of fraud.” (Constitution, Bill of Eights, §16.) Now suppose the garnishee owes a debt to the .judgment-debtor, as is claimed in the present case. He is ordered to pay it into court, or to the judgment-creditor. He is unable to do it, or indeed he may even refuse to do it. May the court, or judge at chambers, imprison him therefor? If they can, then they may not only imprison him for debt, but they may imprison him forever therefor, or at least until he pays the debt; for there is no provision for'his discharge before he pays the debt. Would not this be imprisonment for debt, with a vengeance? But the statute does not seem to authorize the court or judge to order the garnishee to pay the money into court, or to the judgment-creditor. It simply provides that the court or judge may order the money “to be applied toward the satisfaction of the judgment.” (Civil code, § 490.) Under this order the money may be paid voluntarily by the garnishee, or it may be collected from him by an ordinary action. This is the view taken of the question by the Supreme Court of Ohio. (Edgarton v. Hanma, 11 Ohio St., 323, and other cases above cited.) Section 490 of our code is the same as §467 of the Ohio code, except that immediately after the words above quoted the following words are inserted *34in our code and omitted in the Ohio code, to-wit: “ and may enforce the same by proceedings for contempt in case of refusal or disobedience.” Now these words probably do not mean that the court may imprison a garnishee for not pajdng money which he owes (a debt) into court, or to the judgment-creditor ; but if they do, then we think that they are unconstitutional to that extent. (Union Bank of Rochester v. Union Bank of Sandusky, 6 Ohio St., 254, 260 to 262.) Section 473 of the Ohio code is the same as § 498 of our code; and both read.as follows:
“If any person, party or witness disobey an order of the judge or referee, duly served, such person, party or witness may be punished by the judge as for a contempt.”
This section is about as strong as the new words inserted in §490 of our code, and yet with this section the supreme court of Ohio made the decisions above cited.
6. Order of justice against garnishee. With regard to the order made by the justice in the attachment and garnishment proceedings, we would say that the plaintiff in such proceedings has his remedy to enforce the payment of the money due from the garnishee by an ordinary action under § 43 of the justices act, and perhaps also by an action or proceeding under § 44 of the justices act; but he has no other remedy. (Rice & Burnett v. Whiting, 12 Ohio St., 358.)
In conclusion we would say that we think the petition shows a good cause of action for interpleader. It shows that there are several persons claiming the same thing from the plaintiff; that the plaintiff has no beneficial interest in the thing claimed; that some of the defendants have already instituted proceedings therefor against the plaintiff, and that others threaten so to do; that the plaintiff cannot determine to whom it belongs without great hazard to itself; that the plaintiff has no adequate remedy at law, nor indeed any other adequate remedy; that while the thing in dispute is a debt to Clark & Co., one of the defendants, yet there is no dispute about the amount of the debt; and that while some of the defendants do not claim the whole of the debt, yet that Clark *35& Co. do, and the others in the aggregate claim vastly more than the debt.
The judgment of the court below is reversed, and cause remanded with the order that the demurrer to the petition be overruled, and for such other proceedings as may be proper in the case.
All the Justices concurring.