Court Opinion

ID: 6468087
Source: CourtListenerOpinion
Date Created: 2022-06-26 14:08:23.891282+00
Date Added: 2024-06-11T09:11:12.972353
License: Public Domain

OPINION OF THE COURT. ROBERTS, C. J. On the 28th day of July, 1913, E. S. Mundy recovered a judgment against W. J. Irwin, in the district court of Chaves county for $1,200. Later Mundy assigned the judgment to the appellant herein. An execution upon the judgment was issued and returned nulla bona by the sheriff of said county. Irwin had a contract with the county road board of Chaves county for the erection of a bridge in said county, and, after the bridge had been fully completed and accepted by said county, there remained due Irwin, under said contract, the sum of $4,811.60. Before the amount due had been paid to Irwin, and after his contract had been completed and the bridge accepted by the countjr road board, appellee, Dow, instituted this action to subject said fund to the payment on his judgment. The complaint set up the foregoing facts in detail, and alleged that Irwin was insolvent; that appellee was without an adequate remedy at law, by which he could enforce the payment of said judgment. The county road board of Chaves county was made defendant, and the appellee asked for a decree, subjecting the moneys due from the county road board to Irwin, or so much thereof as was .necessary to the payment of appellee’s said judgment. The county road board answered, admitting that it was indebted to Irwin in the sum named in the complaint, and stated that it was ready and willing to pay into court the amount of its indebtedness to Irwin, or to pay the same to such parties as the court might order. Appellant also appeared in said action, and upon issue framed the cause was submitted to the court for trial. The court found for appellee, and ordered the county road board to pay into the hands of the clerk of the court, for the use and benefit of appellee, the amount of its judgment and costs of suit. From this judgment appellant appeals. The controlling question in this case is whether moneys due and owing to a judgment debtor by a county may be subjected, by a court of equity, to the payment of such judgment, where the judgment creditor is without a legal remedy by which he can enforce the payment of the same. Appellee denominates this proceeding as an “equitable garnishment,” and cites the following cases and authorities in support of his right to maintain the action: Plummer v. School District, 90 Ark. 236, 118 S. W. 1011, 134 Am. St. Rep. 28, 17 Ann. Cas. 508; Clark v. Bert, 2 Kan. App. 407, 42 Pac. 733; Pendleton v. Perkins, 49 Mo. 565; note by Judge Freeman to case of Dickinson v. Johnson (Ky.) 96 Am. St. Rep. 434; Speed v. Brown, 10 B. Mon. (Ky.) 108; Ludes v. Hood, 29 Kan. 55; Thompson v. Nixon, 3 Edw. Ch. (N. Y.) 457; McCoun v. Dorsheimer, Clark (N. Y.) 144; Smith v. -, 4 Edw. Ch. (N. Y.) 653; Waterbury v. Board of Com’rs, 10 Mont. 515, 26 Pac. 1002, 24 Am. St. Rep. 67; Kepley v. Sheehan, 9 Kan. App. 885, 61 Pac. 333; Dillon on Municipal Corporations (5th ed.) § 249; Pomeroy’s Equity Jurisprudence, vol. 6, § 881; Shinn on Attachment and Garnishment, § 501. The great majority of the foregoing cases involved the question of the right to reach money in the hands of. city and town officials, and whether such cases could be properly considered in point, where it is sought to reach, by equitable proceedings, money owing by a county, might present an interesting question, owing to the distinction which exists between such corporations. Counties are “local subdivisions of the state, created by the sovereign power of the state, of its own sovereign will, without the particular solicitation, consent, or concurrent action of the people who inhabit them.” Dillon on Municipal Corporations, § 35. In the foregoing section, Judge Dillon dearly points out the distinction which exists between such corporations. Counties, being but political subdivisions of the state, created by the Legislature for the purpose of aiding in the administration of the affairs of the state, can neither sue nor be sued without legislative sanction. They have only such powers as are granted them by the Legislature. This distinction which exists between strictly municipal corporations and counties does not seem to have been considered in any of the foregoing cases, and it is probably true that a court which would subject moneys in the hands of a municipal corporation to a creditor’s bill would also entertain a suit to reach money in the hands of a county or school district. We are not, in this case, however, required to determine the question, as it affects a strictly municipal corporation, and shall therefore pass to the consideration of the question before us. Appellee concedes that under the statute (section 2546, Code 1915) garnishment will not lie, at law, against a public officer. This section expressly says that “no public officer shall be summoned as garnishee in his official capacity,” .and because of this express prohibition against proceeding against a public officer under the statute, appellee claims the right to proceed in equity, because of the absence of a legal remedy. Waiving all questions of public policy, which will be -discussed later, it may be stated that it is very questionable, in the absence of statutory authorization, whether a creditor’s bill can reach the chose® in action of the judgment debtor, unless the case presents some independent ground of equity jurisdiction, such as fraud, trust, or the like. That it cannot is stated by Wy. Pomeroy (section 877, vol. 6, Pomeroy’s Equity Jurisprudence) as the majority rule. One of the leading case® supporting the majority rule is Donavan v. Finn, 1 Hopk. Ch. (N. Y.) 59, 14 Am. Dec. 531. In discussing the question, Chancellor Sanford says: “A^oording to our distribution of iurisdictions, suits for the r^oovgry of ordinary debts are appropriated to the courts o£ oopinion law; and the proceedings for enforcing the judgrnents rendered in such suits are alike allotted to those courts. In any such case, where the subject of the suit is exclusively of legal cognizance, a court of equity has no jurisclition to enforce the judgment, by its own methods of proceeding, or to give a better remedy than the law gives. If the remedies of the law are imperfect, equity, as has been often said in the English Chancery, has no jurisdiction to give execution, in aid of the infirmity of the law. When any fact giving equitable jurisdiction intervenes in the transactions between creditor and debtor, ruch fact becomes a foundation of relief in this court; but in any ordinary case, free from fraud or injust ce, the execution of the judgment and the methods of compelling satisfaction are confined to the courts of law. When a creditor comes to this court for relief, he must come, not merely to obtain judgment, but he must present facts which form a cnse of equitable jurisdiction. He must show that the debtor has made some frauduent disposition of his property, or that the case stands infected with some trust, collusion, or injustice, against which it is the province of this court to give relief. In such cases, this court has jurisdiction, not for the purpose of giving a species of execution, which the courts of law do not afford; but for the purpose of giving relief in the particular cases, alloted to its juris'diction; and when the cause, by reason of such f^cts. is properly here, the court proceeds, uuon all the circumstances of the case,, to give final and equitable relief. “When, upon an execution, the sheriff returns that no property of the debtor is found in his county, the return is evidence of the fact stated; but neither the return, nor the fact returned, gives any jurisdiction to this court. If the same fact were returned from every county of the state, these remedies at law would he exhausted; hut equity would have no jurisdiction upon the mere ground that no property had been found by the sheriffs. But when equity has jurisdiction, by reason ot some disposition of the debtor's property, made in fraud of the creditor, and when in such a case the sheriff of the county m which the property is situáted returns upon the execution that no property is found, the return is important evidence to show that the fraudulent disposition has had effect, by preventing the .service of the execution. By the existing law, the property of a debtor, consisting of things in action, held by him, without fraud, is not subject to the effect of any execution issued against his property; and while a court of law does not reach these things by its execution, a court of equity does not reach them by its execution for the purpose of satisfying either judgments at law or decrees in equity. To subject these things to the satisfaction of a judgment, by seizing and soiling them, like goods in possession, would be to alter the established law of the land; and this court lias no power to make such an alteration, in the name of equity. The maxims that every right has a remedy, and that where the law does not give redress, equity will afford relief, however just in theory, are subordinate to positive institutions, and cannot be applied, either to subvert established rules, * * or to give to this court a jurisdiction hitherto unknown. * * * “But it is said that a failure of justice must take place U such a jurisdiction .should not be exercised by some of our courts of justice. How, it is a,sited, is all that class of personal effects, consisting of stocks, credits, and property in action, in various forms, a class of property which, in this community, is very great, to be subjected to the payment of debts? That such property .should be made subject to the payment of the debts of its owner is not denied. .That such property cannot be seized or sold by the sheriff, upon an execution, is the existing law of the state. That in the present state of our laws, a debtor sometimes holds and enjoys this species of property, while his debts remain unpaid, may be true. These reasons may show that the existing laws are imperfect, and that some convenient method of subjecting this, class of property to the payment of debts would be a desirable amendment; but they do not show that this court, or any other tribunal, has power to make such an amendment. The argument, so strongly urged, that justice requires some new remedy in these cases is an argument to be addressed to the Legislature, and not to the courts of either law or equity. “Our ancient law was not destitute of a remedy in such cases. The law was intended and adapted to compel the application of all the property of the debtor to the discharge of judgments against him; and for that purpose different kinds of executions were proided. By executions against his property in possession, that species of effects was subjected directly to the discharge of a judgment; but his things in action were reached only by an execution against his person, upon which he was imprisoned, until he should satisfy the judgment. The execution against the person was a method of coercion, intended to bring forth, for the satisfaction of the judgment, all such effects of the debtor as could not be subjected to other execution; and it was a powerful remedy. That remedy has been gradually relaxed by the Legislature uniil it has nearly lost its efficacy; and whole this great change respecting execution against the person, has been made, the rules concerning executions against property have remained without alteration. Thus the imprisonment of the debtor as a remedy has been, in effect, taken away, no effectual method of execution against his pronerty in action has be«n substituted, and this change in our laws has been made by the Legislature itself.” For other - cases of similar imnort, and following the same reasoning, see Harper v. Clayton, 84 Md. 346, 35 Atl. 1083, 35 L. R. A. 211, 57 Am. St. Rep. 407; Greene v. Keene, 14 R. I. 388, 51 Am. Rep. 400, and see, also, notes 15 L. R. A. (N. S.) 976; Ann. Cas. 1914B, 956, where many other cases will be found collected supporting the rule, and others to the contrary. See, also, 8 R. C. L. 14, and 12 Cyc. 27. As this question was not raised by counsel in the court below, nor insisted upon in this court, we will not give further consideration to it, nor base our decision upon the same, because we are required to reverse the ease upon other grounds.  [1] In the absence of legislative authorization, public policy forbids the garnishment of moneys due the creditors of a county, whether the remedy by which it is sought to reach such funds is denominated legal or equitable. A consideration of the principles underlying this rule will, we believe, demonstrate the fact that it is sound. Appellee concedes that, in the absence of a statute clearly conferring the power, legal garnishment will not lie; hence this branch of the question néted not be further considered. Money in the hands of a disbursing officer of the national or state government cannot be reached by garnishment process or creditor’s bill. This proposition is well settled and uniformly adhered to by all the courts. Buchanan v. Alexander, 4 How. 20, 11 L. Ed. 857, is the leading case so holding. In that case Mr. Justice McLean, speaking for the court, said: “The important question is whether the money in the hands of the purser, though due to the seaman for wages, was attachable. A purser, it would seem, cannot, in this respect, be distinguished from any other disbursing agent of the government. If the creditors of these seamen may, by process of attachment, divert the public money from its legitimate and appropriate object, the same thing may be done as regards the pay of our officers and men of the army and of the navy; and also in every other case where the public funds may be placed in the bands of an agent for disbursement To state .such a principle is to refute it. No government can saction it. At all times it would be found embarrassing, and under such circumstances it might be fatal to the public service. The funds of the government are specifically appropriated to certain national objects, and if such, appropriations may be diverted and defeated by state process or otherwise, the functions of the government may be suspended So long as money remains in the hands of a disbursing officer, it is as much the money of the United Slates, as ii it had not been drawn from the treasury. Until paid over by the agent of the government to the person entitled to it, the fund cannot, in any leg'l sense, be considered a part of his effects.” Applying the same reasoning to the case at bar, it would Follow that the money due appellant for constructing the bridge in question, assuming that the funds were on hand in the county treasury to meet the obligation, belonged to the county of Chaves, and not to the county road board of said county, assuming for the sake of argument that such board constituted the disbursing agent of such county in this regard; or, even assuming that the actual money had'passed into the hands of the individuals constituting such board, they would only be the disbursing agents of the county, and the funds would belong to the county until they had actually passed into the hands of the creditor, for whom they were intended. Even so assuming, the natural inquiry is suggested: Why should not such funds be subjected by garnishment or creditor’s bill to the payment of the just debts of the- county’s creditor, where other remedy is not available? Counties are created by sovereign power for the “purposes of political organization and civil administration, in matters of finance, of education, of provision for the poor, or military organization, of the means of travel and transport, and, especially for the general administration of justice.’’ Dillon on Municipal Corporations, § 35. Certain officers are provided for, whose duties and powers are defined by law. To these officers are intrusted the local administration of the affairs of the county, with such duties toward the state as the lawmaking power imposes upon them. With the private affairs of the people, they have no concern, and, as pointed out, such corporations differ materially from private corporations, and even from a “municipal corporation,” as that term is used to designate a city or town. In the absence of a statute, so authorizing, a •county cannot be sued. Tinder our statutes, taxes are collected, and a certain portion of the moneys goes into the hands of the county treasurer, and are disbursed upon the orders of the board of county commissioners, or other road boards, for various purposes. During the course of a year the smallest county contracts many debts, with divers individuals, and upon order of the proper board many thousands of dollars are paid out. When a contract is made for a bridge, for example, and the same is completed and accepted, and the money due the contractor is paid to him, the contract is fully complied with,on both sides and the matter is ended. This concerns the public. On the other hand, when a private individual comes in and seeks to subject these ■ funds, due a creditor, to the satisfaction of his debts, his private interests in the matter do not concern the public, and the determination of whether he is rightly entitled to the money he claims from the county’s creditor is no part of the business of a public officer. It does not concern the public. The county unit is concerned only with procuring the services or material and the payment therefor. But it is argued by appellee, and the argument finds support in some of the cases, that the county officers are put to but little trouble, and certainly common honesty dictates that a man should pay his just debts. Let us examine briefly the merits of this contention. The county, or some of its officers, are summoned and required to appear in court and answer as to the county’s indebtedness to the individual, whose indebtedness from the county the plaintiff seeks to have applied to the satisfaction of his judgment. During the course of a year a county has many creditors, and its officers might be required to appear and answer in all the different courts of the state. But it is argued that the district attorney is the legal ad-visor of the county, and that it would not impose any additional expense upon the county, and not much labor upon that official. But this argument is faulty, for this officer would be required, in each case, in order to protect the interests of the county, to determine whether the proceedings were properly brought, whether the court had jurisdiction, and many other similar questions. The present case furnishes a most striking illustration of the necessity for a strict adherence to the rule which precludes the bringing of a creditor’s bill against a county. Section 1152, Code 1915, provides: “In all suits or proceedings by or against a county, the name in which the county shall sue or be sued shall be the board of county commissioners of' the county of -- — . * » *»> In the case of Phillips County v. Churning, 4 Colo. App. 321, 35 Pac. 318, a suit was brought and judgment obtained against “Phillips county, Colo.” Upon a writ of error, sued out by “the board of commissioners of the county of Phillips,’’ the court said: “ ‘In all suits or proceedings, by or against a county, the name in which the county shall sue or be sued shall be, ihe board of county commissioners of the county of- ■" * *’ A county is a political subdivision of the state for governmental purposes, and at common law could neither sue nor be sued. It is only by virtue of statutory enactment that any action can be maintained, either in its behalf, or against ir. The right lo sue a county being purely statutory, where the mode of instituting the suit is prescribed by statute, it must be strictly followed. Schuyler Co. v. Mercer Co., 4 Gil. (Ill.) 20; Gilman v. Contra Costa Co., 8 Cal. 52, note to same case, 68 Am. Dec. 291; Monroe Co. v. Flynt, 80 Ga. 489 (6 S. E. 173); Rock Island Co. v. Steele, 31 Ill. 543. We have but one statutory provision concerning the manner in which a suit shall be brought against a county. It must be brought against the board of county commissioners of the county sued. That is the corporate name of the county for the purposes of the suit, and there is no authority to sue it by any other name. In tlrs case the statutory requirement having been-disregarded, the judgment is á nullity. But the plaintiff in error is ‘the board of county commissioners of the county of Phillips.’ It was not a party to the proceedings below. It cannot, in any way, be affected by the judgment. The statute provides no method for the enforcement of such a judgment, and neither directly nor remotely Is the plaintiff in error interested in it, or in any disposition which might be made of it. The case is therefore improperly in this court, and the writ of error is dismissed.” The present proceedings were instituted, and judgment recovered, against “the county road board of the county of Chaves.” We have searched in vain for a statute authorizing a suit against this board. If the decision of the Colorado court is sound (which we are not required to determine), the judgment in the present case would be a nullity, and should the county pay the money into court, as directed by the judgment, it would still be liable to appellant for the full amount due him under his contract, which he could recover by suit. Public policy forbids that officers of a county should be required to litigate such questions, with private parties, with whom they have no concern, and prosecute appeals at the expense of the county to the court of last resort, in order to definitely settle the. question of the liability of the county, or incur liability upon their official bonds for the wrongful diversion of county funds. No other or further argument is required to demonstrate the soundness of the rule which relieves counties from all such suits. Our conclusion is amply supported by the authorities. See 6 Pomeroy, Eq. Jur. § 881; The Addyston Pipe & Steel Co. v. City of Chicago, 170 Ill. 580, 48 N. E. 967, 44 L. R. A. 405; Morgan v. Rust, 100 Ga. 346, 28 S. E. page 419: and note to Divine v. Harvie, 18 Am. Dec. 194. In the case of Addyston Pipe Co. v. Chicago, supra, the court said: “A large and growing city like Chicago must constantly have hundreds . of persons in its employment, and if the city cannot, at short intervals, make a .settlement of these multitudinous accounts, but is liable to be drawn into court at the suit of every creditor of its numerous employes, it will not only be engaged in much expensive and vexatious litigation in which it has no interest, but, if unable to safely pay its employes and contractors, it may lose the services of persons that may be of much value. * * * A municipal corporation cannot be properly turned into an instrument or agency for the collection of private debts. It exists simply for the public welfare, and cannot be required to consume the time of its officers or the money in its treasury in defending suits, in order that one private individual may the better collect a demand due from anothér. “The doctrine announced in Merwin v. City of Chicago (45 Ill. 133, 92 Am. Dec. 204) is fully sustained by the following authorities: Chamberlain v. Gaillard, 26 Ala. 504; City of Memphis v. Laski, 9 Heisk. (Tenn.) 511 (24 Am. Rep. 327); People ex rel. v. Omaha, 2 Neb. 169; Hightower v. Slaton, 54 Ga. 110 (21 Am. Rep. 273); Wallace v. Lawyer, 54 Ind. 508 (23 Am. Rep. 661); School District v. Gage, 39 Mich. 486 (33 Am. Rep. 421); McDougal v. Board of Supervisors, 4 Minn. 189 (Gil 130); Burnham v. City of Fond du Lac, 15 Wis. 194 (82 Am. Dec. 668). The decision of the questions in these casos, as will be found upon examination, is predicated on the ground of public policy, and they fully sustain the doctrine announced by this court. “If, as we have held, a municipal corporation is not liable to the process of garnishment, upon what ground can a creditor’s hill he maintained against a municipal corporation? If it is contrary to public policy to permit the one, upon the ■same ground and for like reasons must not the other be denied? The process of garnishment and a creditor’s bill are, in effect, instituted for the same purpose. They are, as a general rule, instituted to reach money in the hands of a third party due and owing from a judgment debtor to a judgment creditor. A reference to the statute under which the two proceedings are instituted will show their similarity.” For the reasons stated the judgment will be reversed, and the cause remanded for further proceedings not inconsistent with this opinion; and it is so ordered. Parker, J., concurs.