25 N.E.2d 39 | Ill. | 1939
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *580 On May 20, 1935, the John Deere Plow Company, an appellee, recovered a judgment by confession in the circuit court of Hancock county for $749.81 against Floyd H. Kilgore and Ira Kilgore, formerly partners under the name and style of the Kilgore Implement Company. Execution was issued at once and placed in the hands of the sheriff, and on May 21, 1935, was returned with an endorsement of "no property found." This garnishment proceeding was then begun against the State Bank of Colusa. Floyd H. Kilgore had a checking account in the bank in which there was $605.01. The garnishee bank answered and set up a claim to this money on the part of the International Harvester Company, an appellant. That company was permitted to intervene. It asserted that it was entitled to the Kilgore bank account by virtue of two conditional sales contracts which its assignor, the International Harvester Company of America, had entered into with Floyd H. Kilgore as its dealer in farm implements. The language of those contracts is similar, and it will, therefore, be enough to set forth the terms of the International Harvester Company's exhibit A, and no further mention need be made of this appellant's assignor. Kilgore agreed to accept delivery of goods at point of shipment and pay all freight charges. He *581 was to make payment for the goods according to the terms of an attached price schedule in cash, or to pay interest on the balance. He agreed to execute and deliver bankable notes upon the request of the company for the unpaid purchase price. Title to all goods shipped under the contracts was reserved in the company until the goods were fully paid for. The dealer was given the right to sell the goods in the ordinary course of trade for value received, upon condition that "prior to the delivery of any of said goods to a customer the purchaser shall secure from said customer a full settlement in cash or good and bankable notes and that the proceeds of all resales shall be considered the property of the company in lieu of the goods so sold and held in trust for it and subject to its order, as provided in paragraph four hereof, until all sums due under this contract have been fully paid."
Paragraph four provides: "Upon request of the company at any time the purchaser agrees to turn over, endorse and assign to the company a quantity of customers' notes, or, if notes are not available, then customers' accounts sufficient to fully cover and secure all indebtedness of the purchaser hereunder, such notes and accounts to be held as collateral security to said indebtedness." Kilgore guaranteed payment of the customers' notes and waived presentation, demand, protest, notice of protest and diligence both as to makers and endorsers, and, on payment of his indebtedness in full, all notes or accounts remaining in possession of the company were to be returned to him.
The evidence shows that Kilgore deposited the moneys derived from the sale of machinery obtained from the International Harvester Company in his personal account in the State Bank of Colusa along with funds received from the sale of clover seed and from the sale of goods obtained from sources other than that company. He drew checks on this account to pay the International Harvester Company and his other obligations. Between January 30 and *582 April 2, 1935, he had taken orders for the six articles of farm machinery, the proceeds of which are claimed by the International Harvester Company. Kilgore received $853.01 for these items and deposited this money in his checking account. On March 15, 1935, he had a balance of $63.35. From then to May 21, 1935, the date this proceeding was begun, he made twenty-one deposits totalling $6348.62, virtually all of which was the proceeds of sales of goods from the International Harvester Company. During this time he remitted $4373.39 to it. He had drawn other checks and had a balance of $605.01 as previously stated. A master found that this balance belonged to the intervenor. Objections to his report were overruled and permitted to stand as exceptions. The court sustained the exceptions and entered judgment in favor of Kilgore for the use of the John Deere Plow Company and ordered that execution issue therefor. The International Harvester Company and the State Bank of Colusa appealed to the Appellate Court for the Third District, which affirmed the judgment. The cause is here on certificate of importance.
Many questions are argued but they need not all be considered. The controlling question is whether the contracts between the International Harvester Company and Kilgore created a trust in the proceeds derived from the resale of the machinery in the course of trade. Appellants insist a trust was created, while appellees contend the contracts had no such effect. If no trust were created, it becomes unnecessary to consider the questions of waiver and estoppel against the International Harvester Company and as to the tracing of the trust funds into the bank account. An interplea in a garnishment proceeding presents the question as to the right of property. The actual interest of the debtor, subject to all equities to which the property was liable in his hands, may be shown. (Brennan v. Persselli,
The State Bank of Colusa contends that it was error for the trial court to enter judgment against it, with an award of execution. It says that the only proper judgment was that the garnishee be discharged upon payment of the sum in its possession. This position would be correct if the bank had brought itself within section 7 of the Garnishment act (Ill. Rev. Stat. 1939, chap. 62, par. 7) which provides: "And in case the garnishee admits indebtedness to the judgment debtor, he shall not be liable for costs." Instead of admitting indebtedness to Kilgore, the bank set up the claim of the International Harvester Company to the money in the checking account as the proceeds of sales of six machines under the two contracts above referred to. The form of the judgment was, therefore, correct.
Appellants contend that the garnishment summons was issued prematurely because they say the execution on the original judgment was returned "nulla bona" at the direction of appellees' attorney. There is no evidence that the appellees' attorney gave the deputy sheriff any such directions and that witness denied receiving any such directions. We cannot say, in the face of this positive testimony, that the garnishment summons was issued prematurely.
The judgment of the Appellate Court is affirmed.
Judgment affirmed.
Mr. CHIEF JUSTICE WILSON, dissenting. *586