78 Ala. 568 | Ala. | 1885
The Masonic Temple Association, a corporation, made sale of its capital stock, and Geo. B. Holmes became the purchaser of twenty shares, amounting to one thousand dollars. Payment for the shares was secured by promissory notes, of which three remain unpaid, amounting to three hundred dollars, with interest. The Masonic Temple Association borrowed money from the Southern Life Insurance Company of Memphis, Tennessee, another corporation, and, among other securities, placed Holmes’ notes in its custody, as collat
If there had been no hypothecation of the notes as collateral security by the Masonic Temple Association, there can be no question that garnishment would lie. Holmes clearly owes the debt; it is a legal, not an equitable liability, and can be enforced in an action of debt, of indebitatus assumpsit. — Henry v. Murphy, 54 Ala. 246; Winslow v. Bracken, 57 Ala. 368; Jones v. Crews, 64 Ala. 368; Henderson v. Ala. Gold Life Ins. Co., 72 Ala. 32; Drake on Attachment, §§ 457, 463, 544.
It can not be disputed, that, under our statute, which allows the beneficial owner of a contract for the payment of money to sue and recover in his own name, Clark could have maintained an action on the Holmes notes.- — Colebrooke on Collateral securities, §§ 1,90,113,154. He had such lien on, and right to the notes and their proceeds, as that no one could deprive him of them, without paying the debt for which they stood pledged. From these undisputed postulates it is contended, that garnishment, or trustee process, as it is known in other States, can not reach or condemn the liability, as a debt due to the Masonic Temple Association. There are authorities which hold, that an attaching creditor can constitute himself trustee or garnishee, and condemn to the payment of his demand a debt due from himself to his debtor. — Lyman v. Wood, 44 Verm. 113. We do not think them sound. — Belknap v. Gibbons, 13 Metc. 471; Braisdell v. Ladd, 14 N. H. 129; Hoag v. Hoag, 55 N. H. 172.
But, does it follow from the principles above stated, that this suit can not be maintained ? The ownership of collateral pa-
As we have shown above, Clark had the right to sue on the Holmes notes, by virtue of his possession and the interest he had in their collection and proceeds. They were not absolutely his property. . He had but a lien on them. When collected, their proceeds were to go in exoneration, yovo tanto, of the Masonic Temple’s indebtedness, now the property of Clark. So far as any right disclosed by this record informs us, no one except Clark is interested in enforcing the lien. Without approving all that is said in the authorities collated above, we may safely assume that Clark had the unquestioned right, if he chose to take the risk, of waiving his lien on the notes, and proceeding for their condemnation as debts due to the Masonic Temple Association. He thereby neither increased nor varied the nature or extent of Holmes’ liability. He only exposed himself to the possibility of an intervening lien or transfer, which would dominate his attachment lien. None such is asserted. And Holmes, paying in the garnishment suit, will be no more exposed to a second suit or recovery, than if he paid voluntarily, or in an ordinary suit on the note. One recovery and collection by Clark, even in garnishment, will bar any suit he might bring on the notes.
To illustrate our views, suppose the Holmes notes had been held in pledge, or as collaterals, by an outside party, and Holmes, answering as garnishee, had disclosed the fact that he had been notified of such holding. Clark would have had the right, under our statutes, to have notice issued and served on such outside claimant, requiring him to come in and contest the bonafides of the transfer. Being so notified, suppose the avouched transferree failed to come in and assert his claim. The result would necessarily be a judgment against the garnishee. Why? Because the garnishee is shown to be indebted in that form which will maintain debt, or indebitatus
On the facts shown in this record, judgment shout'd have .been given against the garnishee.
Reversed and remanded.