7 R.I. 174 | R.I. | 1862
There are two fatal objections to these attachments; one, that the garnishee has no possession of, and the other, that the defendants have no attachable interest in, the property *180 attached. The purpose of the arrangement set forth in the garnishee's affidavit was, to supply the Boston and New York Central Railroad Company, which lacked credit, with iron for the use of their road; and this purpose not only suggests the legal relation of the several parties to the arrangement, but the construction to be put upon the contracts entered into to carry it out.
The garnishee, who acted as the agent and trustee for all parties, purchased the iron of the Bay State Iron Company, paying for it with the note of the Boston and New York Central Railroad Company, secured for about one-half of the amount by thirty of its mortgage bonds, which, together with the note, were delivered to him by the railroad company for that purpose, and secured, for the other half, by the personal guaranty of eight of the friends of the road, for five thousand dollars each; three of the guarantors being the garnishee himself and the two defendants. Instead of delivering the iron in full property to the railroad company, he loaned the same to them to be laid down and used on their railroad, the loan to become a sale if the company paid for the iron as stipulated; and he reserved to himself, in default of such payment, the power to take up and repossess himself of the iron, for the purpose, amongst other things, of indemnifying the guarantors.
The railroad company, with whose note and for whose use the iron was bought, and to whom it had been delivered under the above arrangement, was in possession of the iron which had been laid down on their track, at the time these writs were served on the garnishee; and although the company was in default, all that the garnishee held for the benefit of the defendants, was a power, in the nature of a trust, to take up and repossess himself of the iron rails, for their indemnity as guarantors. Subject to this power, the company had, so far as the guarantors were concerned, not only the possession and use, but the whole beneficial interest in the rails, and could, at any time, defeat the garnishee's power to take up the rails, at the instance of the guarantors, by giving them indemnity. The railroad company did not possess these rails as the agent of the garnishee, nor, in equity, as his mere lessee; but as the owner of the same, pledged to the garnishee for his own indemnity and that of the guarantors. In no proper *181 sense can the possession of the company be said to be his; since it is protected by their own rights, by virtue of which they can, at any moment, abrogate his power to disturb them, and complete their title to the property purchased for them, and possessed by them. The garnishee is no more in possession of the property sought to be attached in these cases, then every mortgagee in trust of personal property is; after the mortgage has been forfeited, and before he has taken possession for sale. Such mortgagee has the legal title and the right to possession; but whoever supposed that he was in possession of the mortgaged property under such a defeasible title, so that he could be compelled, by garnishee process, to surrender, or account for it, at the suit of a creditor of his cestui que trust?
This view of the relative rights of the parties to the property in question shows, too, that the defendants have no attachable interest in it. Their right is a mere equity, to compel the enforcement of a power over it, in trust for their benefit. It is a right to nothing tangible, for indemnity only, and is defeasible, so far as the property is concerned, at the will of the railroad company.
Without regarding the difficulties which have been suggested in any attempt to break up a railroad by stripping it of its iron, after it had begun to run, and the hardship of compelling a garnishee to surrender or account for property thus placed by contract in another state, and beyond his probable control, we are, for these reasons, of the opinion, that the garnishee is not chargeable, and direct these attachment suits to be dismissed, for want of service of the writs. *182