64 Cal. App. 2d 375 | Cal. Ct. App. | 1944
The defendant in this ease appears as both a judgment debtor and a judgment creditor. He obtained a judgment for $3,544 against one H. W. Bateman, a resident of Montana, in the United States District Court for the District of Montana. A judgment was entered against the defendant, in the Los Angeles County action before us, in 1939. Making use of a writ of execution issued upon the Los Angeles County judgment, the sheriff of Siskiyou County served a garnishment upon Bateman, who accommodatingly appeared in this state for the purpose, and thereafter sold the $3,544 judgment to the plaintiffs for $250. The defendant moved to have the sale set aside, and from the order denying his motion took an appeal. We have determined that the order denying his motion should be reversed.
A somewhat fuller statement of facts is essential to an understanding of the appeal’s problems. The writ of execution was issued under date of August 14, 1941, and the plaintiffs forwarded it to the Siskiyou County sheriff with instructions to serve it upon Bateman- who, the sheriff was informed, would be at the latter’s office “sometime on Monday, August 25th, to accept service on this writ and presumably make a return.” Plaintiffs’ prediction that Bateman would appear at the sheriff’s office in Treka, California, was based upon an understanding reached with Bateman’s attorneys that that judgment debtor would come within arm’s reach of California process so that the claim of defendant Donovan against him, evidenced by the Montana judgment, might be sold to Donovan’s judgment creditors, the plaintiffs, it being agreed that should they acquire the judgment, and should it be affirmed upon the appeal which was then pending, upon the payment to Donovan’s creditors of $1,500, the $3,544 judgment would be satisfied so far as they were concerned. Some outstanding claims against the judgment, amounting to $1,000 or more, were to be taken care of by Bateman.
Judgment debtor Bateman appeared as agreed and was
The defendant based his motion to vacate the sale upon several grounds. Those which we find to be without a sound foundation we shall refer to very briefly. Where the judgment creditor buys at an execution sale it is not essential to the validity of the sale that cash shall pass back and forth between the sheriff and the purchasing creditor. (Mitchell v. Alpha Hardware & Supply Co. (1935), 7 Cal.App.2d 52, 56-58 [45 P.2d 442].) The fact that the defendant had no knowledge that the levy had been made or that a sale was to take place does not of itself invalidate the sale (Spellacy v. Young (1919), 44 Cal.App. 174, 177 [186 P. 368], and see Hamilton v. Carpenter (1942), 52 Cal.App.2d 447, 448 [126
Inherent in the sale of a claim whose validity is not admitted is the likelihood that its owner will be deprived of it at a figure far below its actual worth. Perhaps that is the reason for the amendment made to section 688, Code of Civil Procedure, in 1941, consisting of the addition of the proviso at the end of this sentence: 1 ‘ Shares and interests in any corporation or company, and debts and credits, and all other property, both real and personal, or any interest in either real or personal property, and all other property not capable of manual delivery, may be levied upon or released from levy in like manner as like property may be attached or released from attachment; provided, that no cause of action nor judgment as such, shall he subject to levy or sale on execution.” (Italics ours.) It is argued that because of the prohibition of the proviso, the sale with which we are concerned was unauthorized. We are of the opinion that it
The ultimate conclusion, in the case of Sunset Realty Co. v. Dadmun, was that the trial court had had no authority to hold a hearing on a third party claim. That to which a claim had been made was a debt which had been reduced to a judgment, not yet final, and the levy upon the debt-judgment had been by service of a garnishment upon the judgment debtor. The ultimate conclusion was rested heavily upon a prior one, which was (p. 737) “that the law, in harmony with reason, gives the levying officer neither the duty nor the power to sell a debt which has been garnisheed. ’ ’ The validity of the ultimate conclusion, we think it will be found, depends upon the validity of the one just quoted. The citation of the Sunset Realty Company case in support of the conclusion that in the case of a garnishment a third party claim hearing is not authorized is, therefore, to be regarded as an approval of the basis on which the conclusion rests. This is plainly so in the case of Bank of America v. Riggs (1940), 39 Cal.App.2d 679, 684 [104 P.2d 125], where we find this statement: “The right of a third party claimant to try the title to an indebtedness due by a garnishee to such third party claimant received the studied consideration of the appellate
There is a conflict between the conclusion reached in the Sunset Realty Company case and those cases which rely upon it, and the conclusion reached in the four eases to which we now turn our attention. How great the conflict is depends in part upon the strength of the distinction which is made between the two modes of serving a writ of execution to lay hold upon a debt. In the case under review, as in the Sunset Realty Company case, service was upon the debtor. In Meserve v. Superior Court (1934), 2 Cal.App.2d 468, 472 [38 P.2d 453], service had been made upon the plaintiff, the creditor, and it was held that the pending cause of action could be sold. This case was cited with approval in Everts v. Will S. Fawcett Co. (1937), 24 Cal.App.2d 213, 216 [74 P.2d 815], where four tort causes of action were levied upon and sold, and where emphasis was placed upon the fact that the levy had been made upon the plaintiffs, those who claimed that damages were due them, and not upon the claimed debtors, thus avoiding a conflict with Arp v. Blake (1923), 63 Cal.App. 362 [218 P. 773], where the debtor had been
The fourth case at odds with the conclusion reached in the Sunset Realty Company case is Lantin v. Biscailuz (1939), 35 Cal.App.2d 422, 427 [95 P.2d 962]. Indeed, this case agrees with none of those we have been considering. There, a debt reduced to a final judgment was the subject of garnishment, levy having been made upon the debtor. The court held, first of all, that the only valid manner of levying upon a debt is by service upon the debtor, not by service upon the creditor. Then it held that a garnishment upon a “debt” could be followed by a sale of the debt, the holding in the Sunset Realty Co. case being frowned upon, the Supreme Court cases relied upon in that case being distinguished upon the ground that they dealt with a sale of “judgments”, not “debts.” We note with interest that the court which decided the Lantin case also decided the case of Nanny v. H. E. Pogue Distillery Co., supra, 56 Cal.App.2d 817 [133 P.2d 686], with its citation of the Sunset Realty Company case.
Because we are of the opinion that the debt-judgment owed to defendant Donovan by Bateman could not be sold by the sheriff under the situation presented by this case, the order denying the motion to vacate the sale is reversed. A second motion to vacate the sale, made after an appeal had been taken from the order just reversed, was also denied. Even if an appeal would lie from this second order of denial, which is doubtful, it has become moot by our reversal of the first order, so that it is dismissed.
Shinn, Acting P. J., and Wood (Parker), J., concurred.
Respondents’ petition for a hearing by the Supreme Court was denied July 10, 1944.