111 Neb. 683 | Neb. | 1924
Lead Opinion
This is a proceeding in aid of execution. March 1, 1919, plaintiffs secured a judgment against Joseph E. Dvorak and the Illinois Surety Company, defendants, for the sum of $5,000, upon which execution was issued and returned unsatisfied;'whereupon March 18, 1919, plaintiffs made application for an order of the court for the examination of garnishee, First National Bank at Havelock,' as to moneys of the defendant claimed to be owing from said bank to the judgment debtor. The bank appeared by its cashier, who was examined and stated that they were indebted to some one on two certificates of deposit dated May 3,1915, payable 12 months after, date, “on return of these certificates properly indorsed,” one for $500, and one for $250; that said certificates were payable to the Illinois Surety Company, defendant, and purchased with money furnished by defendant Dvorak;, that Dvorak and his brother were at that time engaged in the saloon business, and the surety company had become surety upon their bond according to the requirements of the statute, and that the surety company held the certificates of deposit in question as security to indemnify them from any loss by reason of having executed said bond. It was further shown that said certificates had never been paid and had never been presented for payment, and that the bank has no knowledge as to' where they are or as to who holds them,. Upon this showing and upon the 2d day of May, 1919; the court made an order that the bank hold and retain, the money represented by said certificates and not pay the samé to any person until the further order of the court. On May 2, 1921, plaintiffs filed a motion to require the bank to pay said money with interest into court, and on May 6, 1921, a motion, supported by affidavit, to require the bank to appear and answer as to its indebtedness to the defendants, and obtained the order for the bank to appear, which it did, disclosing the same state of facts hereinbefore set forth as upon its former examination. After taking the matter under advisement, the court on December 30,1921, entered an order and judgment against the
The sole question for determination is whether or not, the disclosures of the bank upon the examination showed an indebtedness from the bank to the Illinois Surety Company. It is the claim of the bank that the certificates of deposit were negotiable instruments, and the amount represented thereby was not' subject to garnishment or supplemental proceedings, on the same principle that the maker of a negotiable note may not be garnisheed because he might thereby be subjected to a double payment., On the other hand, the plaintiffs claim that,- it not appearing that the certificates have ever been sold or transferred, and that the surety, company, holding them merely as collateral, had no right, to transfer them but only to collect them, there is a presumption that it still holds them; and, further, inasmuch as the certificates matured May 3, 1916, at the time of making the order in question, the bank had a perfect defense of the statute of limitations as against any action thereafter brought, and was therefore in no danger of a double liability.
The certificates in question were negotiable instruments, and the general rule is well settled that the indebtedness of the maker of such an instrument is not subject to garnishment, as the obligation is to the holder of the instrument; who- may be either the payee or a transferee in ordinary course. Fisher v. O’Hanlon, 93 Neb. 529. It was held, however, in Campbell v. Nesbitt, 7 Neb. 300, that, -where the instrument was past due and remained in the hands of the payee, it was- subject to attachment. A material question necessary to be considered is when, if at all, the certificates in question matured so as to start the statute of limitations. There is considerable difference of opinion in the decisions as to whether a certificate substantially in the language , of those under consideration matures so as to start the statute
It appears, then, that at the date of the order in question on appellant the statute of limitations would be a perfect defense to any action brought by the payee subsequent to the 3d day of May, 1921, five years after the maturity of the certificate. It is suggested that the plea of the statute is personal to the debtor, and that he cannot be compelled to plead it. On the other hand, it seems equally evident that the debtor cannot aid the creditor in defeating his creditors who have secured a lien upon the debt before the same was barred by the statute by such a plea. Such a holding would permit the garnishee to defeat the plaintiff, and, later on, by a plea of the statute defeat the claim of tne debtor (its creditor), and thus retain the fund to which it has no legal claim.
By the transaction the Illinois Trust Company was made a pledgee of the certificates, holding same as collateral security as against its liability upon the saloon-keepers’ bond, and its only authority over the certificates was to collect the same. It had no authority to negotiate them (Jones, Pledges (3d ed.) sec. 651), which would be a wrongful act, and therefore, in the absence of any evidence on the subject, a presumption arises that the pledgee still holds them, and thft all danger of a double liability on the part of the bank,
One further contention of the garnishee requires consideration, viz., that the present proceedings were not commenced within five years from the maturity of the certificate and are therefore barred by the statute. By reference to the statement of facts herein, it will be noted that the first step in these proceedings was taken March 18, 1919, which finally resulted in an order May 2, 1919, that the garnishee hold the fund until further order; that May 2, 1921, a motion was made requiring the garnishee to pay the money into court. These proceedings were all within five years from the maturity of the certificate. On May 6, 1921, a second motion and affidavit were filed for examination of the garnishee, and on December 30, 1921, the judgment complained of was entered, in which it was recited that the matter came on for hearing on the motion of May 2, 1921, and the motion of May 6, 1921. It thus appears that the second motion was treated as a continuation of the first, and that tlie judgment was a final disposition of the proceedings initiated March 18, 1919, and well within the period of limitations. However, the following orders appear of record;
“Blanche May Jacoby et al v. Joseph E. Dvorak et al.
“It is by the court ordered that cause be shown within twenty days from this date why this case should not be dismissed for want of prosecution.”
This order was made February 28, 1921. Under the same title the following:
“It is by the court ordered that this cause be and hereby is dismissed for want of prosecution, at the costs of plaintiffs, Blanche May Jacoby, Everett Franklin Jacoby, and Violet Lamont Jacoby, by their next friend, Iretus W. Jacoby, taxed at $-, for which execution is hereby awarded.”
This order was made March 25, 1921. It is contended by the garnishee that by these orders the proceedings in- aid of execution were finally dismissed; that no action was
We feel bound to differ from these contentions. The orders do not purport to dismiss the supplemental proceedings — no mention thereof is made; the reference is to “this case” and “this cause.” There was nothing appearing on the docket to show the existence of these proceedings, nor, in fact, that a judgment had beer, rendered in the case two years before. No notice of either of these orders was given plaintiffs. It is perfectly evident from the record itself that the order was inadvertently made and was a nullity, and should have been set aside even after the term on either of two grounds: That it had been irregularly entered and without notice; or for mistake of the clerk in entering upon the trial docket a case already in judgment. Comp. St. 1922, sec. 9160, subd. 3: An order dismissing a case in which a final judgment had been entered two years before is certainly irregular (see Estate of McKenna v. McCormick, 60 Neb. 595, for definition), and a case in judgment has no place on the trial docket. The court refused to set aside the order of dismissal on account of the lapse of the term, which was clearly erroneous, but as the order was a nullity on the face of the record this fact is immaterial. Furthermore, the judgment herein was based in part upon the motion of May 2, 1921, which was filed within the five-year limitation. We conclude that, in the absence of any evidence that the certificates had been transferred, the garnishee was indebted to the judgment defendants on May 2, 1921; that this proceeding was commenced in time; that the bar of the statute is complete against any action that may hereafter be brought by any one sui juris — the possibility of the certificate being presented for payment by one who had been under disability until within five years of the
Affirmed as modified.
Rehearing
The following opinion on motion for rehearing was filed
Former judgment modified.
This case was before the court upon a former occasion, the opinion being reported, ante, p. 683. A motion for rehearing was filed on behalf of the garnishee, and the cause reargued. The material facts are set forth in our former opinion, and need not be restated. Upon a reconsideration of the case a majority of the court are satisfied with the principles of law announced, and with the general disposition of the case. The action is equitable in its nature, and the question presented involves equitable principles. The payee in the certificate of deposit, is also one of the judgment debtors. The payee in the certificate, as pointed out in the former opinion, holds the certificate as a pledge, the pledgor being a codefendant and one of the judgment debtors. Under the peculiar circumstances presented by the record, the presumption is that the pledgee has not transferred the certificates. We have concluded, however, that the order of the
As thus modified, the judgment of the district court is affirmed.
Affirmed as modified.
In my opinion the garnishee should be discharged.