Court Opinion

ID: 7929912
Source: CourtListenerOpinion
Date Created: 2022-09-08 23:03:11.416118+00
Date Added: 2024-06-11T16:33:18.964031
License: Public Domain

Graves, J.,
dissenting. This case was before us a year ago on a judgment against the Feareys, and we remanded it for a new trial. 41 Mich. 376. It is now brought up again after judgment on such trial in their favor. As I am not able to concur with my brethren, I proceed to explain the impressions I entertain.
*42The action is of very unusual occurrence. It is a controversy under tbe garnishee law between mutual creditors of the same debtor, and not a proceeding on the part of a creditor against one who, as a debtor of the principal debtor or holder or controller of such debtor’s property, is in legal contemplation indifferent whether he pays and delivers to the latter or to., the garnishee plaintiff. The nature of the contention, as well as its scope, are different in the two cases, and the distinction and its proper implications ought not to be overlooked.
The remedy by garnishment is statutory and special, and not well fitted for any complicated disputes of this nature. In applying it the court is bound to adhere to all the provisions intended to restrict it or to protect the garnishee. Such extraordinary methods accommodate themselves much better and with greater safety to jurisdictions where the procedure follows or resembles that of equity, than to those where the course is according to the common law.
On the former occasion ,we acknowledged the difficulty felt in attempting to decide questions under this law unless very distinctly presented.
Some matters are now brought under discussion which were not considered on the former hearing. Such of them as seem to require notice upon my construction I shall refer to with as much brevity as the case will justify. It is first proper to notice three several provisions in the act giving the remedy and which belong to the remedy. Two of these show in a way very marked the design of the Legislature to avoid any such interference with the garnishee as might overrule or impair any just interest or advantage he might have acquired. Drake on Attachment, § 462.
Section 6498 of the Compiled Laws provides that “ if any person garnished shall have in his possession any of the property aforesaid of the principal defendant, which he holds by a conveyance or title that is void as to the creditors of the defendant, he may be adjudged liable as garnishee on amount (guoxre, account ?) of such property, although the principal *43defendant could not have maintained an action therefor against him.”
Section 6472 refers to cases where personal property of the principal defendant, in possession of the garnishee, is under some lien, pledge or mortgage, and makes provision for protecting the rights of the garnishee under such incumbrance. Section 6504 is as follows: “ Every garnishee shall be allowed to deduct from the property in his hands all his demand against the principal defendant, of which he could have availed himself if he had not been garnished, whether by set-off at the trial or upon execution, and shall be liable for the balance only after adjustment of mutual demands: Provided, that in the adjustment, no claims for unliquidated damages for wrongs or. injuries shall be considered.”
The effect of these provisions is:
Fir at. To enable a creditor proceeding asigarnishee plaintiff against property in possession of the garnishee defendant, to defeat the title or conveyance the latter holds thereto, which is void as against the principal defendant’s creditors, but without infringing other claims.
Second. To guard whatever right the garnishee defendant may have as the holder of any valid lien, pledge or mortgage; and
Third. To secure to him, in the cases covered by § 6504, the right to have his demand first compensated out of tlie property, and to limit his liability over to such amount as remains after the deduction of his demand from the true value of the property. Necurring to the litigation, several matters of importance appear to be settled by admissions, actual or tacit, and a few short propositions will explain the case and relieve it of some incidents which appear confusing: (1) Each set of contestants are creditors of Nellis, the principal debtor; (2) the garnishee defendants, Cummings, were in possession of Nellis’ assets at the time of service of garnishee process on them; (%) the chattel mortgage from Nellis to them was void as against the garnishee plaintiffs, the Feareys. Cooper v. Brock 41 Mich. 488 ; Fearey v. Cummings, supra.
Fourth. ■ The garnishee defendants wore entitled to deduct *44under § 6504 the true amount, of their demand against Nellis from the fair value of the assets, and could not be held for anything beyond the remainder; but would be liable for that, or so much of that as would be equal to the recovery against the principal defendant. Such, I think, must be the effect of the statute. Had Nellis sued Cummings for goods sold and delivered, and for money had and received, their demands against him would have been the subject of set-off, and the Feareys can be in no better situation. Gage v. Chesebro, 49 Wis., 486. The question whether Nellis did or did not yield on account of pressure, when the garnishee defendants got possession, is herein unimportant. There is no ground for claiming that the transaction was merely a sale by Nellis to the garnishee defendants in payment of his debts. And in any event the material inquiry is, what was the true amount of his indebtedness to the garnishee defendants, and what was the fair value of the assets they obtained %
Fifth. The contention by the garnishee plaintiffs that the package of goods which arrived from Fearey’s on the 28th of May was obtained by Nellis fraudulently, and with a preconceived design not to pay for it, was not pertinent to the case. The proceeding by the garnishee plaintiffs was not on account of property of which the title was still in themselves, but on account of property of which the ownership was or had been in the principal defendant Nellis.
Sixth. The judgment in Fearey’s favor against Nellis in the action with which the garnishee proceeding was connected, has been allowed to remain as rendered. Nellis has not questioned it, and the garnishee defendants cannot be legally prejudiced by any inaccuracy, if there be one, in the amount for which it was entered up. They can be held liable only for whatever of assets they may have received over and above their demand, .and in regard to that they are no more than stakeholders or trustees for Nellis, and in the same plight as any other garnishee defendant, who holds indifferently, and subject to the determination of the law as to whom he is to account. They are not in a situation to claim the right, if in any case it could be claimed, to assail the judg*45ment as having been given for'debts not due. The point is not germane to their relation to the controversy, in the view I take of it. So far as their legal responsibility and legal rights are concerned, it is entirely immaterial, See Hanna's Syndics v. Lauring 10 Martin 568: 13 Am. Dec. 339 and note.
I think the judgment should be reversed.