Hodges v. Graham, Hodges & Co.

On Rehearing. Ludeling, C. J. In our former opinion we said : “Theindebtedness being acknowledged, the garnishee can not be heard to urge any plea to protect the judgment debtor, but where the question of his (the garnishee’s) indebtedness is an open one, he can not be deprived of any substantial defense by reason of the form of action selected by the judgment creditor.” After reconsidering this ease, we doubt the-accuracy of that statement. *368 The garnishee is a stakeholder, and on his answers the judgment ■•should be for or against him. He has no interest in the contest between the creditor and the debtor. Of course, the falsity of his answers may be shown if he has answered untruly. But, in this case, the object of the motion to strike out part of the answers of the garnishees and of the traverse of the answers is to attack the settlement made between the garnishees and the judgment debtor. The plaintiff •^‘denies the truth of any and all the matters therein set forth by way of plea or defense of the original defendants, or as grounds of attack upon the judgment under which they have been garnished; avers that at the time of service of interrogatories upon them, and now, E. J. Hart & Co., were and are indebted, to Graham, Hodges & Co., in liquidation, in an amount sufficient to satisfy the judgment in this case; denies that there is or was any balance of account due E. J. Hart & Co., by the defendants, and avers that the amounts actually received by E. J. Hart & Co., as proceeds of the whiskies inquired of, were in ■excess of the special advances spoken of to an amount sufficient, after deducting all lawful commissions and charges, to satisfy the judgment in this case; denies that defendants are or were indebted to E. J. Hart & Co., in any sum on general balance of account, and avers that E. J. Hart & Co. were and are indebted to defendants over and above all debts or liabilities of defendants to them, to an amount sufficient to satisfy the judgment in this case; denies that E. J. Hart & Co. ever accounted to Graham, Hodges & Co. for the proceeds of the whisky inquired of, and avers that the pretended settlement with Charles E. Goodwyn, on the fifteenth of March, 1865, was a fraud on the firm of Graham, Hodges & Co., then in liquidation, and upon the creditors of ■ said firm, and is an absolute nullity of no validity, force or effect in law for any purpose whatever; denies that said pretended settlement 'was ever acquiesced in by the other members of the firm, or either of ■them; denies that at the time of said pretended settlement the said 'Goodwyn was a creditor of his firm in any amount whatever, and avers that W. R. Hodges was a creditor to a considerable amount, while Graham’s account was not balanced, though there was nothing to his credit; avers that the consignment of brandies referred to in the answers, as having been settled for by compromise, had been consigned to E. J. Hart & Co. by Graham, Hodges & Co., as agents of Charles Hodges, and that the proceeds actually received therefor by E. J. 'Hart & Co. were in excess of the special advances thereon to a very large amount; denies the truth of all other statements in said answer not hereinbefore specially admitted, except that it is true as stated in -said answers, that it was agreed between Goodwyn and E. J. Hart & Co. that the proceeds of the consignments of whiskies, as well as of ■the brandies referred to in said answers, and the whiskies and brandies *369 remaining on hand on the fifteenth of March, 1865, at a valuation should be credited to the individual indebtedness of Goodwyn to E. J. Hart & Co., instead of being accounted for to his firm ; avers that it is not true that the pretended settlement with Goodwyn was bona fide, on a fair adjustment of accounts, but that it was at prices very much less than those actually received by E. J. Hart & Co. for the whiskies sold, and at a valuation for tlie whiskies taken to account much less than the market price at the time; and that this pretended settlement, in addition to its other fraudulent features, was fraudulent also in this, that a large quantity of the whisky is not accounted for at all, as either having been sold or as remaining on band; denies .the truth of all the allegations relative to the compromise of the suit No. 5108 of the United States Circuit Court, except what appears on the face of the paper, it being admitted that the signatures thereto are genuine.” The garnishment process is the mode for making seizures of intangible property. The garnishees say they hold the thing, attempted to be seized, by virtue of a title acquired by a settlement between themselves and their debtor. Suppose the whiskies and brandies, etc., bad been actually seized in the possession of the garnishees, and they had shown a title for the whiskies, etc., could that title be attacked collaterally ? The seizing creditor can not disregard the title and possession of the garnishees and treat it as a nullity. The difficulty in this case arises from the attempt of the plaintiff to change his garnishment process into a revocatory action. This can not he done. 19 An. 16. The grounds on which the plaintiff claims to set aside the transfer or settlement made in 1865, is that the partnership assets were given in payment of an individual debt of one of the partners; that is, au unlawful preference given to tbe individual creditor over tlie partnership creditor. His remedy, we think, is by a direct action. It is therefore ordered that the decree heretofore rendered remain uu disturbed.