Mims v. West

Walker, J.

1. When a person is served with a summons of garnishment, he is required to answer wh&t he was indebted to the defendant at the.time of the service of said garnishment, Rev. Code, sec. 3226; and if unable to admit or deny his indebtedness, he should plainly and distinctly set forth the facts, so as to enable the court to give judgment thereon. Ib., sec. 3492. Judgment should not be entered up against the garnishee, unless it appear affirmatively, that, at the time of the garnishment, the defendant had a cause of action against him for the recovery of a legal debt, due or to become due by efflux of time; and no judgment should be entered against the garnishee unless it would be available as a defence against any action afterwards brought a.gainst him, on the debt in respect of which he is charged. Drake on Att., sections 461, 583. The garnishee cannot be compelled to pay the debt twice. Brannon vs. Noble, 8 Ga., 550 .

Under the old law, it would seem that a debt not due, was not subject to garnishment. In Dalton vs. Solly, Croke, Eliz., 184, “ It was held per Curiam, that a foreign attachment can not bé of a debt before it be due; and therefore, whereas one was indebted in a sum of money to be paid at Michaelmas, and it was attached before Michaelmas, but the judgment of the attachment was not till after Michaelmas, it was clearly held to be void, because it was not due when attached.” This was decided in 1590. This rule ■ seems to have been changed in Georgia; see Glanton vs. Griggs, 5 Ga. R., 424; King & Ells vs. Carhart Brothers & Co., 18 Ga. R., 650; and probably in most of the States of this Union; see 6 Maine R., 263 ; 4 Mass. R., 235 ; 17 Pa. R., 440 ; 1 Har. & J. R., 536, (Md.); 3 Murphy’s R.; 256, (N. C.); 1 Ala. R., 396; 17 Arkansas R., 492. Mr. Drake, in his work on Attachments, sec. 587, states-correctly the principles which now govern in relation to negotiable securities not due. Pie says : As a general rule, the maker of a negotiable note should not be charged as garnishee of the payee under an attachment served before the maturity of the note, unless it *21 be affirmatively shown that before the rendition of the judgment, the note had become due, and was then still the property of the payee.” Again, in sec. 58'5, he says: “ But' though the garnishee should answer that the defendant, at the time of the garnishment, was the owner of the garnishee’s note not then due, no judgment should be rendered against him, because his obligation is not to pay to any particular person, but to the holder at maturity, whosoever it may be. Can the garnishee, or the defendant, or the court say that the defendant will be the holder of the note at maturity ? Certainly not; and yet to give judgment against the garnishee, necessarily assumes that he will be.” No judgment should be rendered against the garnishee unless it will, when satisfied, protect him against a subsequent suit to recover the same debt. Under the Rev. Code, sec. 2732, the paper which Bird purchased from Mimms on Jackson, was a negotiable promissory note.' He purchased for value; before the note fell due, and without notice of the garnishment. What are his rights under this state of facts ? The Code, sec. 2743, says: “The bona fide holder for value of a negotiable instrument, who receives the same before it is due, and without notice of any defect or defence, shall be protected from any defence set up by the maker, except non est factum, gambling or immoral or illegal consideration, or fraud in its procurement.” And in sec. 2597, it is said: “ The bona fide purchaser of a negotiable paper not dishonored, or of money, or bank bills, or other recognized currency, will be protected 'in his title, though the seller had none.” Here, it will be seen that negotiable paper, not dishonored, is placed on the same footing as money currency. The defences which may be set up against such a paper, are specifically named; and in none of them are the rights of the garnishee embraced, provided he should have to pay to- the creditor.

Tn this case, suppose Jackson were adjudged liable to pay West the amount of this note, under the summons of garnishment, and the bill .making Bird a party had not been filed ; when Bird shall sue Jackson on the note, can he set up as a defence that the money had been forced out of him *22 by a creditor of Mimms, and thereby defeat a recovery by Bird? If so, the effect would be to repeal sec. 2743; for that section, says Bird, shall be protected against such a defence as this. The bona fide purchaser of a negotiable instrument not clue, stands in a great measure independent of the former holder. The law disconnects him with the previous title, and takes him into its own charge, as deriving a right from itself. See Cowan & Hill’s Notes to 1 Phil. Ev, vol. 1 of Notes, p. 668, note 481.

The doctrine which we now lay down has been indirectly asserted by this Court. In Glanton vs. Griggs, 5 Ga. R. 436, this Court says: “ It being thus made to appear that Glanton had express notice of the attachment lien, he can not disconnect himself’ from the previous title of Whatley. * * But for this proof having traded for the note before due, he would have been independent of the former holder, who transferred to him the note. * * As it is, he took the note eum onere, nor is his claim paramount to that of the attaching creditor.” -

It wás insisted that the case of King & Ells vs. Carhart Brothers & Co., 18 Ga., R., 650, is an authority in favor of the garnishing creditor in this case. That case decides th at debts secured by negotiable instruments may be the subject of garnishment.” We have no complaint to make with this principle; it is right. The point here made is as between the rights of the garnishing creditor and the bona fide purchaser, before due, of a negotiable paper. No such question was made in that case; and even if it had been, the code has been adopted since that time, (1855,) and according to its provisions, the rights of the purchaser are paramount to those of the garnishing creditor. See, also, Murray vs. Sylburn, 2 J. C. R., 444.

2. It was insisted that the doctrine of lis pendens should affect the purchaser, and operate as constructive notice to 'all the world, that the creditor was proceeding to enforce his rights against the effects of his debtor, and that the service of the summons of garnishment on the maker of the note impounded the funds in his hands, so that a transfer of the *23 note could not defeat the claim of the creditor. There is some force in this suggestion, but we think, looking to the policy of our Legislature in favor of negotiable paper, that the better rule will be to hold that the rights of the purchaser are superior to those of the garnishing creditor. We have not been able to find many decided cases touching this question. We find one very well considered case in 22 Ala. R., 760, Winston vs. Westfeldt. In that case, an injunction was granted, restraining the negotiation of a promissory note. The defendant, in violation of the injunction, transferred the note, for value, before due, to a bona fide purchaser, and the question was, whether the purchaser or the complainant in the bill had the better title to the money due on the note. The case was ably argued and well considered by the court, and the principle enunciated in the case is, that “the doctrine of lis pendens does not apply to negotiable paper. An injunction in force against the negotiation of a note does not destroy the negotiability, nor defeat the title of a bona fide purchaser, acquired pending the injunction, but without notice. This, certainly, is a stronger case than the service of a summons of garnishment.

Perhaps it may be well to repeat that we fully recognize the doctrine that negotiable instruments may be the subject of garnishment; but before judgment should be entered against the garnishee, it should affirmatively appear that the instrument is due, and belonged to the defendant subsequent to the time of the service of the summons, and to the time it fell due. These facts appearing, judgment may be safely entered against the garnishee, for a satisfaction of the judgment rendered upon this state of facts, will be- a protection to the garnishee against a second payment of the debt. The court should not permit a judgment to go unless such facts appear as will make the satisfaction of the judgment a protection to the garnishee.

In this case, Bird, having purchased the Jackson note before it fell due, and paid a valuable consideration for it, without any notice of the garnishment, got a good title to it, and one which is not, in any manner, affected by the process *24 of garnishment. As to him, the Court should have dissolved the injunction, the,equity of the bill having been fully sworn off. The rights of the o'ther parties can be passed upon when the facts are made manifest by the answers and proof.

Judgment reversed.