Iler v. Rieger & Co.

| Mo. Ct. App. | Feb 1, 1897

Lead Opinion

Gill, J.

This is a controversy between the above named plaintiff and the garnishee bank, as to the right of the former to subject a certain deposit which defendants Rieger et al., had to their credit in the statement. the date of garnishment. The exact nature of the controversy will be understood from the following agreed statement of facts on which the case was submitted to the lower court: It was agreed “that * * * plaintiff instituted this suit by attachment upon the ground that defendants were about to andhadfraudulently disposed of their property, and that plaintiff’s claim was past due; that the attachment of the plaintiff herein has been sustained, and judgment rendered against the defendants in the sum of $1,880.50; that this garnishee was summoned as garnishee, under a writ of attachment, herein, on the ninth day of October, 1893; that the garnishee was at all times herein mentioned doing a general banking business in Kansas City; • that up to the seventh day of October, 1893, and for a long time prior thereto, the defendants, as partners, had been depositors and customers of this garnishee, and that at the time of the service of said summons of garnishment there was a credit in favor of defendants, as depositors, upon the books of this garnishee, for the sum of $251.31; that at the time of the service of said garnishment and ever since this garnishee held and still holds notes made by defendants, which said defendants had discounted with this garnishee, as follows: One note for $400, due October 11,1893; one note for $1,250, due October 23, 1893; one note for $1,250, due November 22, 1893; which said notes are unpaid; that said notes were and are secured by collateral, the value of which said collateral is now and ever since the service of the said garnishment has been less than the aggregate sum called for in the said notes by at least $260; that on the seventh day of October, 1893, the defendants became openly and wholly insolvent, and that unless this garnishee is permitted to retain said deposit of $251.31 and set-off the same against its claims against the said defendants upon said notes, its loss will be so much the greater. On this state of facts the trial court held the bank liable as garnishee for the amount of the deposit and said garnishee appealed.

Garnishment: set-off: debt not due. The decisive question is whether or not the Midland Bank, at the date of service of garnishment on it, had the equitable right to set-off the claim it then had against defendant Rieger, though at the time of garnishment such debt was not yet due. Whatever may be the rule elsewhere, and whatever may be our individual opinions as to the justice and right of the matter, the appellate courts of this state have settled that question adversely to the contention of the garnishee’s counsel. Reppy v. Reppy, 46 Mo. 571" court="Mo." date_filed="1870-10-15" href="https://app.midpage.ai/document/reppy-v-reppy-8003008?utm_source=webapp" opinion_id="8003008">46 Mo. 571; Huse v. Ames, 104 Mo. 91" court="Mo." date_filed="1890-10-15" href="https://app.midpage.ai/document/huse-v-ames-8010045?utm_source=webapp" opinion_id="8010045">104 Mo. 91; Smith v. Spengler, 83 Mo. 408" court="Mo." date_filed="1884-10-15" href="https://app.midpage.ai/document/smith-v-spengler-8008062?utm_source=webapp" opinion_id="8008062">83 Mo. 408; Kortjohn v. Bank, 63 Mo. App. 166" court="Mo. Ct. App." date_filed="1895-10-29" href="https://app.midpage.ai/document/kortjohn-v-continental-national-bank-8261073?utm_source=webapp" opinion_id="8261073">63 Mo. App. 166. The rule there stated and adhered to, is that “a demand can not be set-off because of the insolvency of the plaintiff in equity any more than at law, unless it existed against the plaintiff, in favor of the defendant, at the time of the commencement of the suit, and had then become due.”

It will not do to say that this holding was mere obiter dictum. As I read the cases they necessarily involved that particular question and very naturally called for an opinion. More than this, from an examination of the briefs and authorities cited it seems the rule announced in this state is in line with a majority of the courts of the country. See citations from Waterman on Set-Off and other authorities contained in brief of plaintiff’s counsel. A different doctrine is. announced by other courts, conspicuously by the United States, supreme court, Schuler v. Israel, 120 U.S. 506" court="SCOTUS" date_filed="1887-03-07" href="https://app.midpage.ai/document/schuler-v-israel-91871?utm_source=webapp" opinion_id="91871">120 U. S. 506, still as we are bound by the decisions of our own supreme court we must adhere to the rule so clearly declared in the cases first above cited.

Grarnishee’s counsel are correct in the claim that their client occupies every vantage ground it would if the suit was direct by the attachment defendant, and that the attachment plaintiff occupies the same and no better attitude than would the defendant. This is familiar law. But the rule remains the same, whether the suit be direct by the bank’s depositor, or whether the bank be proceeded against by garnishment. The rights of set-off are determined as they existed on October 9, 1893, the date of the garnishment. On that day the bank had no present enforcible claim; it had not then a subsisting cause of action upon which an action might have been sustained. This being so, no right of set-off existed either-at law or in equity.

The judgment of the circuit court will be affirmed.

All concur.

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Rehearing

ON MOTION BOB BEHEAEING.

-: attachment: debt not due. Garnishee’s counsel, in their motion for rehearing, urge that we have overlooked the admitted fact that the defendants at the date of garnishment were guilty of a fraudulent disposition of their property, and that because of such fraud the bank had then a right to sue, as provided by section 522 of the attachment law. Having then a right to bring attachment against defendant, it is contended that the right of set-off existed.

The position is not tenable. To entitle the gainishee to set-off, its claim against defendants must then have been due. “A demand can not be set-off * * * in equity any more than at law, unless it existed against the plaintiff, in favor of the defendant, at the time of the commencement of the suit and had then become due.” The statutory right, on certain specified conditions, to attach in advance of the maturity of the debt, does not bring about a present existing due debt; in other words, it does not change the contract between the parties.

“When attachment lies on such demand (that is, one then not due), it is nothing more than a means of present security, in its strictest sense, which the law affords the creditor; and when the attachment fails, the action should be dismissed. * * * The statutory power to maintain such an action on a demand before its maturity, does not embrace the right to anticipate the time when the debt will be owing.” 1 Wade on Att., sec. 161; Grier v. Fox, 4 Mo. App. 522" court="Mo. Ct. App." date_filed="1877-12-04" href="https://app.midpage.ai/document/grier-v-fox-6613945?utm_source=webapp" opinion_id="6613945">4 Mo. App. 522; Duryee v. Turner, 20 Mo. App. 34" court="Mo. Ct. App." date_filed="1885-12-08" href="https://app.midpage.ai/document/duryee-v-turner-8258926?utm_source=webapp" opinion_id="8258926">20 Mo. App. 34; Houser v. Andersch, 61 Mo. App. 15" court="Mo. Ct. App." date_filed="1895-01-29" href="https://app.midpage.ai/document/houser-v-andersch-8260885?utm_source=webapp" opinion_id="8260885">61 Mo. App. 15.