Williams v. McLane

THIS case was brought up, by writ of error, from the District Court of the United States for the middle district of Alabama.

The case is stated in the opinion of the court.

It was argued by Mr. Phillips for the plaintiff in error, and Mr. Hilliard for the defendant.

Mr. Phillips made the following points:

The answer of garnishee is required by the statute to be under oath, and when not disproved, must be taken as true. (Code, sec. 2,540; Davis v. Knapp & Shew, 8 Mo., 657; Kergen v. Dawson, 1 Gilman, 89; Muson v. Campbel, 2 Pike, 511.)

The plaintiff by the statute is allowed to 'controvert' the answer; that is, he may show it to be untrue. The present code of Alabama does not point out the particular mode of proceeding; but when the issue is made up, it is evident the trial must proceed as in other cases. The statute, as it existed before the adoption of the 'code' in express terms requires that 'an issue shall be formed and tried as in other cases. (Clay's D., p. 60, sec. 25; Code, sec. 2,546; Thomas v. Hopper, 5 Al. Rep., 442.)

Not only the answer denies any indebtedness, but the promissory notes produced and proved, import a consideration. This by the law merchant and by the statute of Alabama. (Code, p. 424, sec. 2,278.)

By the well-established judicial construction of the attachment law, 'no demand can be recovered by writ of garnishment, on which the defendant in the judgment, who is also the creditor of the garnishee, could not maintain debt or indebitatus assumpsit.' (Self v. Kirkland, 24 A. R., 277.)

It follows that the proof required by the present plaintiff is the same as would have been required of the defendant in the judgment, if he had brought the suit. Could he have recovered on the evidence in this record?

There being no evidence disproving or tending to disprove the answer which denied any indebtedness, and nothing impeaching the consideration of the notes, there was no predicate for the charge as to 'fraud and collusion.' The bill of exceptions sets out all the evidence in the cause. Where the facts are not disputed, fraud is a question of law. (Swift v. Fitzhugh, 9 Port, 66, 67; Gillespie v. Battle, 15 A. R., 285.)The points made by Mr. Hilliard were the following:

The answer of garnishee is not taken as true, when controverted by the plaintiff, his agent, or attorney. (Code, sec. 2,546.)

The code provides, that the answer of a garnishee being controverted by the oath of the plaintiff, his agent, or attorney, an issue must be made up under the direction of the court; and if required by either party, a jury must be empanelled to try the facts. (Code, sec. 2,546.)

The answer of garnishee is not evidence for himself upon the trial of this issue; the onus of disproving the facts of the answer of garnishee does not rest on the plaintiff. (Travis v. Taritt, 8 Ala., 574; Myatt v. Lockhart, 9 Ala., 94, 95.)

The only proof offered by garnishee to the court and jury, going to show that he was not indebted to defendant in execution, was that certain promissory notes had been made by said defendant, but the date of said notes, or rather the actual time of their execution, did not appear from any testimony. They were merely offered by garnishee as a set-off against the plaintiff's suit for the excess of money remaining in garnishee's hands after satisfying the debts provided for in the mortgages; and the consideration of said notes was not in proof.

The charge of the court, if erroneous, is in favor of the garnishee, and he cannot revise it in this court.

The counsel for plaintiffs requested the court to charge the jury, that their judgment against the defendant was a lien on his house and lot; and that they were entitled to the proceeds arising from the sale of said property, after the notes named in the mortgages were satisfied. This charge the court refused.

If the court erred in this, then garnishee cannot complain of it, nor can he of the remaining part of the charge; for if the judgment of plaintiffs be a lien, then they can recover, irrespective of the question of fraud.

The charge should have been given by the court. (19 Ala., 195, 196; 19 Ala., 753; 21 Ala., 504; Hazard v. Franklin, 2 Ala., 349.)

The charge of the court on the second point, as to fraud, was clearly correct.

It was a question for the jury; the facts were disputed; the very existence of the notes denied; the silence of garnishee respecting them, in his interview with plaintiff's counsel on the day of sale; his offer to relinquish his claim to the house and lot, upon being paid the remainder of the sum due on the notes named in the mortgages; the good faith of the entire transactions between garnishee and defendant in execution being contested-all this, and other facts appearing in evidence, presented a case which a jury alone could decide. The very proceeding, being an issue made up under the code, was a question of fraud or no fraud, and either party was entitled to a jury. (Code, sec. 2,546.)

The general principle, that no demand can be recovered by writ of garnishment, on which the defendant in the judgment could not recover, is conceded; but this principle does not affect this case.

The court, if it erred, was in error in instructing the jury, that if fraud existed between defendant and garnishee, then defendant (Mahone) could not recover, in action against garnishee, (Williams,) the excess in the hands of garnishee arising out of the sale of the house and lot.

Why could he not recover? Because of certain fictitious notes, fraudulently executed by said defendant to said garnishee, for the very purpose of defrauding creditors.

This is obviously incorrect; it ignores the very principle that it seems to sustain, viz: that a party to a fraudulent contract cannot invoke the aid of a court to sustain it.

Williams holds in his hands a fund arising out of a bona fide transaction; and yet Mahone, to whom the fund belongs, cannot recover it, because Williams sets up these fictitious notes, executed by Mahone, with a fraudulent intent. A set-off is in the nature of a cross-action, and, by the ruling of the court, Williams could recover upon fictitious and fraudulent notes.

But if the charge of the court be correct upon that point, and if it be true that Mahone could not recover from Williams, because of fraud, yet plaintiffs may subject the fund in the hands of garnishee to their debt. A garnishee is called into court to answer, not only as to his indebtedness to defendant, but as to his having in his possession the property, money, or effects, of defendant. (See Record, p. 2.)

The jury, by their verdict, found, after reviewing all the testimony, that garnishee was indebted to defendant in execution, and the judgment was correctly entered in favor of plaintiffs against garnishee, for the amount remaining in his hands, after satisfying the debts secured by mortgage.

Mr. Justice CAMPBELL delivered the opinion of the court.