Court Opinion

ID: 6950968
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:31:39.726802+00
Date Added: 2024-06-11T16:08:04.706132
License: Public Domain

Mr. Justice Wauker delivered the opinion of the Oourt. This record presents two questions for determination. First, whether by commencing an attachment suit, and the service of garnishee process, the attaching creditor acquires such a lien upon property in the hands of the garnishee, as will authorize a court of equity to interpose its restraining power, to prevent him from disposing of it before a judgment and execution are had in the proceeding at law. The second is, whether, independent of a lien, the court will entertain a bill to preserve the property, until it can be subjected to a sale on legal process, on the ground, that the garnishee has acquired all of his rights to the property, in fraud of the creditors of his vendor. In reference to the first proposition, it may be said, that the plaintiff in attachment acquires all of his rights in that proceeding, from the statute. If a lien exists by virtue of the service of garnishee process, it is by virtue of the statute, as this proceeding is unknown to the common law. And the statute has not, in terms, made such service a lien upon the effects of the debtor, in” the hands of the garnishee. Under the act regulating attachments, it seems to be the levy alone which creates a lien on property. The delivery of the writ to the officer does not, as with an execution on a judgment, create a lien. Pierson v. Robb, 3 Scam. 139. It is true, the act does not give any priority of lien to the first levy, but requires a pro rata, disposition of the proceeds of the sale of the property attached, on all the judgments against the defendant, rendered at the same term, on writs issued to that term. It has been held, that such a levy is a qualified lien on the estate attached for the satisfaction of the debt, which becomes merged in the judgment. The People v. Cameron, 2 Gilm. 471. It was again held, that a levy on real estate, under a writ of attachment, pursued to judgment, execution and sale made under it, operates as a lien on the land, from the date of the levy. Martin v. Dryden, 1 Gilm. 213. Again, the court, in the case of Burnell v. Robertson, 5 Gilm. 282, held, that where personal property was sold at private sale, by the defendant in attachment, and the purchaser had not reduced it to possession before the writ was levied, it was subject to the attachment. These cases establish the fact that a lien is created by the levy of the writ upon the property. But this question of whether the service of the garnishee summons creates an actual or a qualified lien upon the effects in the hands of the garnishee, has not been determined, in terms, by this court. If, as we have seen, it is the levy upon the defendant’s property which, alone, creates the lien, we are at a loss to perceive how the mere ’service of a summons on a third person to appear and answer whether he is indebted to, or has effects of the defendant in his possession, can create a lien of any character. It is the seizure of the property under the writ, and not its delivery to the officer, that constitutes the lien. It is not notice, actual or constructive, as in case of a fi. fa., that produces that effect. The property is only in the custody of the law, when it is reduced to the possession of the officer. By the service of the garnishee process, there can be no pretense that the property is, in any sense, transferred to the officer, or that he thereby acquires any right to control it. The garnishee still has the right to retain it, and by the service, only becomes liable to account for it or its proceeds, if judgment shall be rendered against him on the trial. The statute does not prohibit him from disposing of it, but only renders him liable on failing to produce it, to satisfy the judgment. The fifteenth section,, it is urged, renders the property in the hands of the garnishee liable to satisfy the judgment against the debtor in attachment. The judgment there referred to is, obviously, the one that may be recovered against the garnishee. The latter clause of this section only has reference to the judgment that may be recovered against the garnishee. By this provision, not only his, but the debtor’s property in his hands, are made liable to satisfy the judgment against the garnishee. The statute has nowhere provided for the sale of property, in the hands of the garnishee, to satisfy the judgment against the debtor. This would seem to place it beyond doubt, that it was not the design of the legislature to create any lien on such property. It was, however, regarded as eminently just, that the garnishee might surrender the debtor’s property in his hands, to satisfy the judgment recovered against him, not because he was a debtor, but a mere bailee, and in no default to any person. It is insisted, that the construction contended for was given to a similar statute in Pennsylvania. Brashear v. West, 7 Pet. 608. But the provisions of that act are materially different from ours. It provides, that the officer executing the attachment, “ shall go to the house, or to the person in whose hands or possession the defendant’s goods or effects are supposed to be, and then and there declare, in the presence of one or more credible persons of the neighborhood, that he attached the same goods or effects. From and after which declaration, the goods, money or effects so attached, shall remain in the officer’s power, and be by him secured, in order to answer and abide the judgment of the court in that case, unless the garnisbee will give security therefor.” It will be observed, that this statute, unlike ours, expressly declares that the property shall remain in the power of the officer, and. be secured by him, to abide the judgment of the court. Our statute does not require the officer to secure the property, nor does it require the garnishee to enter into bond before he can be permitted to retain it in his custody. If the garnishee desires to free himself of all liability, he may surrender the property to the officer, and terminate the responsibility of its custody. Or, he may turn it out to be sold on execution to satisfy the judgment against himself. This is provided for by the statute. These provisions all repel the presumption that the legislature designed to create any lien upon, or place the property in the hands of the garnishee, in the custody of the law. Then will a court of equity, independent of any lien acquired by the garnishment, entertain the bill, on the ground of alleged fraud upon the creditors of the defendant in attachment, by the sale of his property to the garnishee? If so, it can only be, for the reason, that complainant does not have a perfect, adequate and complete remedy at law. He has resorted to his action at law, and by that proceeding has acquired no other or different right to, or interest in, the property than he had before the proceeding was instituted. He may have acquired rights against the garnishee, but not against the property of the defendant in his hands. Nor can we perceive that his footing in a court of equity, is any better or different than if the attachment had not been sued out. And we are not aware that it has ever been seriously contended that an equitable attachment could be sustained. It was, no doubt, because no such remedy existed, that the legislature provided the means of reaching the property by garnishee process. Ve are unable to perceive anything to prevent the suit at law from progressing to its final termination, precisely as attachment suits always do. If discovery is desired, it can be as effectually had by the answer of the garnishee as by his answer to a bill. The interrogatories propounded to him may be made as searching and efficacious, as if they were contained in a bill. If the answer of tbe garnishee is untrue, it may be contradicted as well as an answer to a bill. Nor do we see that any grounds are shown for an injunction, to restrain the garnishee from disposing of the property. The bill contains no allegation that there is any danger of loss before a trial can be had at law. Complainants having no judgment, execution, or even a lien on the property, they occupy the same situation as any other simple creditor, and an allegation of danger of loss would not give jurisdiction, in such a case. The current as well as the weight of authority, both in Great Britain and this country, seems to be, that a court of equity will not interfere, until the plaintiff has obtained his judgment; if he desires to have a fraudulent obstruction removed, or if it is to subject an equitable estate, not liable to sale on execution, he must exhaust his legal remedies, by obtaining a judgment and a return of nulla bona, before a court of equity will afford such relief. This question is not one of first impression in this court, but has been repeatedly before it for adjudication. In the case of Ballentine v. Beall, 3 Scam. 203, it was held, that when a creditor has obtained a j udgment ¿nd has his execution returned no property found, he may file his bill, to subject property to the payment of his debt, not liable to sale on execution. In the case of Miller v. Davidson, 3 Gilm. 518, it was held, that where a party desires to remove a fraudulent incumbrance out of the way of an execution, he may file his bill as soon as he obtains his judgment. But if he seek to satisfy his debt out of an equitable estate, not liable to sale on execution at law, then he must exhaust his legal remedy, by getting judgment, and an execution returned no property found, before he can resort to equity. In the case of Manchester v. McKee's Ex’rs, 4 Gilm. 511, the same rule is announced, as in Ballentine v. Beall. And in the case of Farnsworth v. Strasler, 12 Ill. 482, it was held, that the court of equity would entertain a bill to remove a fraudulent conveyance, to obtain satisfaction of a money decree, where an execution had already been levied upon the property. And in the case of Ishmael v. Parker, 13 Ill. 324, the same rule was adopted, as in Miller v. Davidson. Subsequently, in the case of Greenway v. Thomas, 14 Ill. 271, all of the questions involved in the case at bar were before the court, when it was held that a creditor, as a general rule, must first reduce his debt to a judgment before he can resort to a court of equity for aid in its collection. It was likewise held, that the rule would not be relaxed, if it was in his power to comply with this requirement. In that case, the bill alleged that the debtor had left the State, after having made a fraudulent assignment for the benefit of his creditors, and put his assignees in possession of his property. It was also alleged, that process could not be served upon him, as an excuse for not first having obtained a judgment at law. It was there said, “ that under these circumstances, there would have been no trouble in prosecuting an action at law, by attachment, under our statute, in which he could have reduced his demand to a judgment. The assignment being fraudulent and void as to creditors, the attachment might have been levied directly upon the assigned property, and taken from the possession of the assignees; or, if complainant did not choose to assume the responsibility of such a course, in anticipation of a decision upon the validity of the assignment, he might at least have garnisheed the debtors of the assignors. It is true, he would not have obtained a personal judgment, but he would still have established his claim in a court of law, which would, at least as to the property and credits attached, have authorized him to have called upon the aid of a court of chancery to remove the embarrassments which the fraudulent assignment presented to the collection of his debt.” These cases settle the doctrine, that the complainant must first establish his claim at law, before a court of equity will lend its aid. And it is for the reason that a court of chancery does not assume jurisdiction, to settle and establish purely legal rights. If jurisdiction were entertained in this case to ascertain the legal validity of complainant’s demand, it being wholly of a legal character, so as to afford relief against obstructions that would afterwards present themselves to an execution, no reason is perceived why such jurisdiction might not be assumed in all cases, where legal demands might be so obstructed. This would be an innovation on the settled practice of this court, as well as the chancery practice generally. Whatever may have been held in other courts, we regard this as the practice of this court, too long and too firmly settled to be departed from, simply because it may have been differently held in some other tribunals. If the authorities were uniform against it, and it was not calculated to promote justice, then there might be some reason for a change. But when such is not the case, and the current of authority sustains the practice, we must adhere to the rule as the settled doctrine of the court. These decisions are conclusive of this case, and the decree of the court below must be affirmed. Decree affirmed.