Court Opinion

ID: 8005241
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:52:46.236197+00
Date Added: 2024-06-11T16:35:44.086202
License: Public Domain

Wagner, Judge,
delivered the opinion of the court.
Plaintiff commenced his action against one Streeter, by attachment, and the defendant was garnished in the proceeding. At the return-term defendant filed its answer to the interrogatories propounded, and stated that it was not indebted in any manner to Streeter, but that it was indebted to Streeter & Co., a co-partnership firm composed of Streeter and one Pizer, and therefore asked to be discharged.
To this answer plaintiff filed a denial, and then set up affirmatively, among other things, that the garnishee was indebted to Streeter & Oo. for money deposited by said firm with garnishee, and that the firm was solvent, and that both members of the firm were non-residents and had no creditor in this State except the plaintiff, and that all the monies and effects of Streeter & Co. in this State were deposited with and in the possession of defendant. To this affirmative matter thus pleaded, the defendant demurred, for the reason that it was irrelevant and immaterial, and showed no cause of action against or liability of defendant as garnishee. This demurrer was by the court sustained.
Plaintiff then moved the court to grant an order requiring Streeter and Pizer, the members of the firm, to appear and litigate, and show their respective interests in the fund. This motion was by the court overruled.
On the trial the facts stated in the answer were fully proved, and the court gave judgment for the defendant.
The important question which underlies this case is, whether in an action by attachment against an individual, a person is liable to,be garnished who is indebted to a co-partnérship of which that individual isa member. It is conceded that there is some conflict in the authorities upon this subject, but the cases greatly preponderate against the right of resorting to the process of garnishment under such circnm*23stances. In Kingsley vs. Missouri Fire Co. (14 Mo., 465) it was held, that in a proceeding against a garnishee summoned in attachment as a debtor of a defendant, the plaintiff could not prove a joint indebtedness of the garnishee to the defendant and another person. In the opinion it is said that tliis remedy by attachment and garnishing is one of strict law, and if the debtor could not sue the garnishee alone on the debt, then the garnishee should not be held liable to the plaintiff in the attachment suit, for a debt due by him to the debtor and another, as the other would also be entitled to sue, and thus there would be two actions pending by two plaintiffs, for one indebtedness to them as a partnership. The question is carefully considered, and the authorities reviewed in Drake on 'Attachment, and the learned author declares the true doctrine to be, that the attachment of a debt due to a co-partnership, in an action against one of the partners, is justly distinguishable from the seizure on attachment or execution of the tangible effects of the firm for the same purpose. The partnership property may be sold to pay the debt of one partner, but a debt due the firm cannot be taken by garnishment for that purpose. The reason for the distinction is, that in case of a sale the property cannot be appropriated until all liens upon it growing out of or relating to the partnership are discharged, while in the other case, the judgment against the garnishee, if acquiesced in, changes the right of property, and divests the co-partner’s title to the property attached, which cannot be done so long as the partnership accounts remain unsettled, or its debts unpaid. (Drake Attach., § 567.) The case of Wiles vs. Maddox (26 Mo., 77) is inapplicable here.
The point came up before Mr. Justice Story, in a ease where, in a suit against G-. & G., the garnishee answered that he was indebted to G. & L., one of the defendants being a member of both firms. The court, in deciding-against the liability of the garnishee, observed : “In order to adjudge the trustee responsible in this suit, it must be decided that the funds of one partnership may be applied to the payment of *24the debts of another partnership, upon the mere proof that the principal debtor has an interest in each firm. If this be correct it. will follow that a separate creditor of one partner will have greater equitable as well as legal rights, than'the partner himself has. The general rule undoubtedly is, that the interest of each partner in the partnership fund is only what remains after the partnership accounts are taken ; and unless upon such an account the partner be a creditor of the fund, he is entitled to nothing. And if the partnership be insolvent the same effect follows.” (Lyndon vs. Gorham, 1 Gall., 367.)
It must be borne in mind that garnishment is essentially a legal proceeding, and not adapted for the ascertainment and settlement of equitable rights between the garnishee and the defendant; and that a court of law has no power to act on the debt, until by an adjustment of the partnership affairs, -it shall appear whether the defendant, has any and what interest in the general surplus, or the particular debt.
There is another principle of law which is strongly antagonistic to the doctrine contended for by the plaintiff. It is this : As the attaching creditor can hold the garnishee only to the extent of the defendant’s claim against the garnishee, and can acquire no rights against the latter, except such as the defendant had; and as he is not permitted to place the garnishee in any worse condition than he would be in if sued by the defendant, it follows necessarily, that whatever defense the garnishee could urge against an action by the defendant for the debt in respect of which he is garnished, he may set up in bar of a judgment against him as garnishee. (Firebaugh vs. Stone, 36 Mo., 111; McDermott vs. Donegan, 44 id., 85.) It therefore-results in this case, that Streeter could not have maintained an action against the garnishee, as one partner is incapable of suing for a debt due the firm, and if Streeter could not sue, the plaintiff cannot.
The only remaining question is the action of the court in overruling the motion requiring Streeter and Fixer to appear and litigate their respective rights in the debt. In reference to this question it might be sufficient to say, that no excep*25tion was taken to the court’s ruling. But aside from this, the action of the court was manifestly proper. There was no authority for the proceeding; the parties were non-residents, and not within the jurisdiction of the court, and that tribunal could exercise no control over them. A’garnishment proceeding, as previously remarked, is strictly legal, and no power exists in the court to invoke equitable interference to compel a settlement and adjustment of accounts between other parties.
The 7th section of our garnishment act (Wagn. Stat., 665) provides that, ’’whenever any property, effects, money or debts, belonging or owing to the defendant, shall be found in the hands of the garnishee, he may, at any time before final judgment, discharge himself, by paying or delivering the same or so much thereof as the court shall order to the sheriff, from all further liability on account of the property, money or debts so paid or delivered.” The statute evidently contemplated, that, in order to render a person liable as garnishee, the debt which he owed the defendant should be of such a character that upon being served with process he might pay the amount, without being compelled to await the determination of a chancery proceeding requiring an adjustment of accounts between parties and partnerships. So thought the court in Lackland vs. Garesche (56 Mo., 267), where it held that the statute touching garnishment is essentially legal and not equitable in its nature and procedure; and the rights, credits and effects in the hands of the garnishee which are subject to attachment, are such as are not ■incumbered with trusts, and such as may be delivered over, or paid to the officer under the direction of the court, free from incumbrances. The judge, in delivering the opinion said that it was' “not contemplated by the legislature to authorize a court of law, in a mere side issue growing out of an attachment suit, to exercise the intricate and complicated duties of a chancellor.”
No error is perceived in the record, and the judgment should be affirmed. Judges Napton and Sherwood concur; Judges Tories and Hough absent.