Court Opinion

ID: 8867700
Source: CourtListenerOpinion
Date Created: 2022-11-26 18:11:00.902888+00
Date Added: 2024-06-11T17:06:03.646179
License: Public Domain

SHELBY, Circuit Judge,
after stating the case as above, delivered the opinion of the court.
This case was determined in the court below on a question of equitable jurisdiction. The case was on trial at law, and the court was of opinion that it “involved an accounting, and was therefore equitable in its nature, and could not be entertained in a suit at law.” It is true that in the United States courts the distinction between common law and equity is maintained. This distinction must be .observed, even if it be abolished by the code procedure of the state in which the federal court is sitting. In re Sawyer, 124 U. S. 200, 209, 8 Sup. Ct. 482, 31 L. Ed. 402; Fenn v. Holme, 21 How. 481, 16 L. Ed. 198. Many cases of accounting arise of which an equity court alone has jurisdiction. . But, if the case is one of accounting only, it will be found that the complicated nature of the accounts constitutes the ground for going into equity. Kirby v. Railroad Co., 120 U. S. 130, 134, 7 Sup. Ct. 430, 30 L. Ed. 569. The bill which invokes this jurisdiction is insufficient if it only alleges that the accounts are of an intricate and complicated nature. It must descend to particulars, and state the facts showing the intricate and complex nature of the accounts. 3 Daniell, Ch. Pl. & Prac. (4th Am. Ed.) p. 1929, and note 1. It cannot be maintained that a court of *941equity lias jurisdiction oí every action for goods sold or money advanced, where partial payments have been made, or of every contract, express or implied, where different sums of money have become due, and different payments have been made. In Fowle v. Lawrason, 5 Pet. 495, 503, 8 L. Ed. 204, Marshall, C. J., said, “Although the line may not be drawn with absolute precision, yet it may be safely affirmed that a court of chancery cannot draw to itself every transaction between individuals in which an account between parties is to be adjusted.” In the absence of other matters of equitable cognizance, the unquestioned rule is that courts of equity will not take jurisdiction unless great complexity exists in the accounts. There was no evidence in the case showing any complication in the account between Tandy and Hudson. The account consisted only of amounts advanced and expenses paid by Tandy. The only other matter to be considered in the accounting is the amount realized from the sale of the cattle, and the hill of exceptions shows that Tandy’s statement on this subject was accepted without other evidence. The record before us shows no such intricate and complex account as requires the interposition of a court of equity. •
When the writ of garnishment was served on Tandy, he held about 221 head of cattle bought under the contract. Hudson, the purchaser, had a contingent interest in them, for he was to have one-half of the profits from the sale of the cattle. Other cattle were purchased before the garnishee answered. It is important to note that some of the cattle had been sold before the garnishee answered. One-half of the proceeds of such sale, after deducting moneys advanced by Tandy, with interest and expenses, belonged to Hudson. This was the status when the answer was filed. Before the trial all the cattle were sold. The evidence showed that after deducting advances, interest, and expenses, there remained a profit, and that under the contract Hudson’s share was several thousand dollars. The transactions under the contract had been closed. Clearly, Hudson, the defendant in the judgment, could have maintained an action at law for his share of the profits remaining in Tandy’s hands, for their joint trading venture was ended. This being true, the garnishee, Tandy, is indebted to Hudson in the sense of the statute authorizing garnishment. Rev. St. Tex. art. 219; Rood, G-arnish. § 57. The general rule is that the liability of the garnishee is determined solely with reference to the facts as they existed when the writ was served. Id. § 49. This doctrine, however, is modified in some of the states by the garnishment statutes, and in others the courts have limited its application. “Some liability,” said Chief Justice Shaw, “must exist at that time, in order to charge him; hut that liability may he greatly modified, and even discharged, by subsequent events.” Smith v. Stearns, 19 Pick. 20, 23. In Edgerton v. Martin, 35 Vt. 116, it was held that by the service of the writ “the plaintiffs gained the right .that the goods, effects, and credits of the defendants then in the trustee’s hands, as well as all collections which he should afterwards make on the demands turned out to him, should he applied on his liabilities for them, in accordance with the contract between them existing at the time the process was *942served.” In Insurance Co. v. West, 8 Watts & S. 350, it was held tliat a claim uncertain at the time of the service of the writ, but rendered certain at the time of the answer, was embraced in the levy. The Texas statutes, we think, do not confine the investigation to the status existing when the writ was served. The garnishee is to be discharged, should it appear from his answer that he is not indebted to the defendant, and was not so indebted when the writ of garnishment. was served on him, and that he has not in his possession any effects of the defendant, and had not when the writ was served. Rev. St. Tex. 1895, art. 227. On and after the service of the writ of garnishment, it is not lawful for the gar'nishee to pay to the defendant any debt, or to deliver to him any effects. Id. art. 225. These statutes are applicable in the United States courts. Rev. St. U. S. §§ 915, 916; Railroad Co. v. Hart, 114 U. S. 654, 5 Sup. Ct. 1127, 29 L. Ed. 226. Construing the Texas statutes cited above, tire supreme court of that state has held that a writ of garnishment appropriates whatever the garnishee owes at the time of his answer, as well as that owing, at the service of the writ. Gause v. Cone, 73 Tex. 239, 11 S. W. 162. When necessary, we think the court can so control the making up of the issues in the case as to settle the controversy relative to the entire fund in the hands of the garnishee. Where the garnishee, after answering, receives additional funds on a contract in force when the writ was served, there can be no objection to requiring the garnishee to file a supplemental answer, or to answer additional interrogatories, as the local practice may be, so that the whole matter may be determined. The judgment of the circuit court is reversed, and the cause remanded.