Clough v. Buck

6 Neb. 343 | Neb. | 1877

Gantt, J.

This action was commenced in the county court to. recover the amount of a negotiable note, dated March 8, 1875, executed by defendant to one John P. Luft for the payment of one hundred dollars, with ten per cent, interest from date. 'The note was indorsed to J. O. Thomas, and by him was indorsed to Ellsworth & Lewis, and by them to the plaintiff. The first transfer was made before the note became due. In the county court judgment was rendered for the plaintiff, and the defendant appealed from that judgment to the district court. New pleadings were filed, and the defendant in his answer admitted the execution of the note by him to Luft, but set up as new matter of defense, that on the first day of January, 1875, Rinehart, Ballard & Co. recovered in the county court a judgment against the said John P. Luft for the sum of $184.21; that an execution was issued thereon and returned “ no goods on which to levy ”; that thereupon an affidavit was filed in the ease, and “ an order was made and served on the defendant requiring him to appear before said court; that he appeared and made answer to said order, and was ordered by said court to pay the amount of the note to be applied on the judgment of Rinehart, Ballard & Oo. against John P. Luft, and. on the twenty-fifth day of January, 1875, he paid upon said order one hundred dollars.” It is further averred that on the fifth day of January, 1876, John P. Luft filed in the district court his petition in error in the case of Rinehart, Ballard & Oo. against him, and that said judgment was afterwards wholly reversed; that John P. Luft was wholly insolvent, and transferred the note to J. O. Thomas before due, without consideration and to defraud his creditors, and that Ellsworth' & Lewis and the plaintiff, before receiving the note, severally had full knowledge that the same was garnished in the hands of defendant. To this answer the plaintiff interposed a general demurrer, which was overruled, and judgment was rendered in favor of defendant.

It is quite clear from the facts stated in the answer • that the process of garnishment was commenced under section 244 of the civil code, Ohap. III., entitled, “ Attachment.” This law provides for garnishment in aid of “execution issued upon any judgment of a court of record, or a’justice of the peace,” when such execution is by the officer, in whose hands it was placed, returned “ unsatisfied for want of sufficient property whereof to levy and collect the same.” This process of garnishment is authorized only when there is a judgment, upon, which an execution has been issued and return unsatisfied for want of property whereof to levy and collect the debt, and therefore the whole proceeding must be supported by a judgment m esse. And if after such process has been had the j udgment is reversed, set aside, or vacated, the execution falls with it, and the garnishment becomes wholly dissolved, for there is nothing left to support either the one or the other. Hence, as it appears from the facts stated in the answer, that after the payment of the one hundred dollars into the county court by defendant the judgment of Rinehart, Ballard. & Co. against Luft was reversed and set aside upon error to the district court, and nothing further was done in that case, the process of garnishment was dissolved and the garnishee was discharged. Now what is the position of the parties in the case at bar? It seems to be a general rule that a negotiable note or bill is not, before maturity, subject to attachment. The reason of the rule is well stated in Gregory v. Higgins, 10 Cal., 340. It is said that “ from the very nature of a promissory note, it- is evident that before its maturity the indebtedness of the maker cannot be the subject of attachment. His obligation is not to the payee named in the note, but to the holder whoever he may be. From its negotiability it may often pass into the possession of parties entire strangers to the maker, and even if held by the defendant at the time of garnishment it does not follow that it would be in his hands at maturity, and if transferred before maturity to a bona fide holder it could be enforced, even if paid upon the attachment.” Greer v. Powell & Co., 1 Bush, 497; 14 La., 452. But an exception to the rule is, that if such note or bill is transferred before maturity to an indorsee voluntarily or fraudulently for the purpose of protecting the debt from the creditors of the payee, it may be attached or garnished while it is in the hands of such indorsee, because he is not a bona fide holder. Glanton v. Griggs, 5 Geo., 434.

Now in the application of the rule as above stated to the facts as admitted in this case, we think that the payment of the one hundred dollars by defendant to Rinehart, Ballard & Co., upon their garnishee process is a good defense pro tanto in this action, because it was paid while that proceeding was in full force and effect; but as the judgment in that case was afterwards vacated, and the garnishment dissolved, the unpaid balance of the note is payable to the plaintiff, the indorsee and holder of it.

And this unpaid balance we find at this time, with interest thereon, to be the sum of ten dollars and thirty-seven cents. Therefore the judgment of the court below is reversed, and for the balance found due on the note, judgment will now be rendered in this court with costs, in favor of plaintiff in error and against defendant in error.

Judgment accordingly.