Court Opinion

ID: 6511442
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:22:43.924236+00
Date Added: 2024-06-11T15:54:53.502498
License: Public Domain

SOMERYILLE, J.
The purpose of the present bill, on, *37the part of the complainants, is to effect a marshalUng of certain securities .held by the appellant, Henderson, as the creditor of one Dnffee, of whom also each of the complainants are judgment creditors. Dnffee held a policy of insurance on the life of one Bobbins, which he transferred as collateral security to Joseph Steiner, to secure a debt due him, in regard to the validity and priority of which there is no contest. He also owed Montgomery a debt of about two thousand dollars, and, to secure payment of this sum, he executed a mortgage to him on certain real property, also another mortgage on certain chattels, and he made, in addition to these securities, an assignment to Montgomery of his interest in the assets of the dissolved co-partnership of Dunklin, Duffee & Co., as well as the residue m ■said life policy, then in the hands of Steiner. This assignment was made in January, 1878. After these events, in November, 1879, each of the complainants, who are now appellees in this court, recovered judgment on their respective claims in the Circuit Court of Mobile county; and during the progress of these suits, served writs of garnishment on Joseph Steiner, summoning him to answer as the garnishee and debtor of Duffee. The garnishment process in favor of the Alabama Gold Life Insurance Company was served upon Steiner on the 12th of August, 1879, and that of Horton, the other complainant, on the day following. On the 15th day of August, after service of these garnishment writs, Duffee assigned to Henderson all of his interest in the'surplns money arising from the insurance ■policy, subject to the claims of Steiner and Montgomery, which were prior in time and right. Montgomery also assigned his claims on Dnffee to Henderson, with all of his securities above described.
The purpose of each of the bills under consideration — -which were, on the hearing, consolidated into one cause by the chancellor — is to force Henderson, as the assignee of Montgomery, to exhaust his remedy against the mortgaged property, and the assets of Dunklin, Duffee & Co., before proceeding against the insurance money in the garnishee’s bands. This is upon the principle, that where one creditor has a lien upon two funds or estates, and another creditor has a lien upon one of them only, the latter is entitled, in equity, to throw the former on the fund not common to both.—1 Story’s Eq. Jur. § 663; Gordon v. Bell, 50 Ala. 220; Nelson v. Dunn, 15 Ala. 501.
Conceding that a garnishment or attachment lien, acquired by summoning a garnishee to answer at law, would entitle the plaintiff so acquiring it to such a remedy in a court of equity,— a point unnecessary to be decided — it becomes material to inquire whether, under the facts of this case, the complainants have any such lien on the fund here in controversy. If not, *38the whole case made by the bill is manifestly devoid of equity.
It has often been held, and may be considered as settled by our decisions, that attachment and garnishment proceedings-sued out in courts of law, which are purely of statutory origin, can operate only on the legal rights of the defendant in attachment — at least, in cases where no fraud intervenes — or, in other words, upon such rights as the defendant could enforce, in his own name, by action at law. If money in the hands of a garnishee is sought to be reached, it must be of a character which the defendant in attachment could recover of the garnishee by action of debt, or indebitatus assumpsit.—Henry v. Murphy & Co., 54 Ala. 246; 1 Brick. Dig. 175, §§313-14; Jones v. Crews, 64 Ala. 368; Toomer v. Randolph, 60 Ala. 356.
It is plain from the facts disclosed in the garnishee’s answer, and the other pleadings in the Circuit Court, upon the propounding of Henderson’s claim, which are also matters of proof in this cause, that the legal title of the money in Steiuer’s hands, admitted by him to be a balance of over twenty-two hundred dollars, had passed out of him before the service of the ga/rnishment writ upon him. It was transferred to Montgomery,, through the assignment made to him by Duifee in January, 1878, — considerably more than a year before the garnishment writ was issued. This fact is fatal to the garnishment proceeding ; for no balance was in Steiner’s hands, as the debtor of' Duffee, upon which the lien could operate. Steiner owed Duffee nothing, but he owed Montgomery, as the assignee of Duffee, and Montgomery was not summoned as garnishee inthe cause. The latter could have sued for the whole of the residue of the life policy fund, and if it was more than adequate to satisfy his claim, he, and not Steiner,-would have been debtor to Duffee for the surplus, if any.
The remedy afforded by the statute is, therefore, clearly inadequate to reach this surplus by garnishment against Steiner, unless by successful contest of the garnishee’s answer in the Circuit Court pursuant to the provisions of the Code authorizing such a controversy. — Code, §§ 3302-3. If. Duffee had any interest in it, only his legal, and not his equitable rights, as we have shown, could be ren died by garnishment. Nor in such cases is it permissible to resort to a court of equity, to supplement the defects of the statute.—Phillips v. Ash's Heirs, 63 Ala. 414; Janney v. Buell and Wife, 55 Ala. 408; McClellan v. Lipscomb, 56 Ala. 255. In this view of the case, the complainants had no lien on the fund in controversy, and the chancellor erred in granting-the relief prayed; and his decree is hereby reversed, and the cause remanded.