Shea v. Regan , 29 Mont. 308 ( 1903 )

ME. CHIEF JUSTICE BRANTLY,

after stating the case, delivered the opinion of the court.

The respondent did not file a brief in this court, nor did counsel appear for him at the hearing. The court is therefore left without assistance or suggestion from him. Counsel for appellant contends that the action is one in equity to enforce a lien, that the justice’s court had no jurisdiction to entertain it, and that the district court, having acquired no jurisdiction by virtue of the appeal, should not have assumed to entertain it or to render any other judgment than one of dismissal. The question presented was properly raised by the motion-for a non-suit and the request for an order directing a verdict, and is the only question before us.

The plaintiff’s claim of preference is based upon the provisions of Sections 2152, 2153, 2154 and 2155 of the Code of Civil Procedure. Section 2152 declares: “In case of executions, attachments and writs of similar nature, issued against any person, except for claims for labor done, any miners, mechanics, salesmen, servants, clerks or laborers who have claims against the defendant for labor done, may give notice of their claims and the amount thereof, sworn to by the person making the claim, to the parties plaintiff and defendant to the action in which such execution, attachment or other writ has been issued, and upon the officer executing the same. * * * Service of the notice may be made upon the officer having the writ or writs in, his hands in one or more cases- which may be pending against the debtor. When such service is made upon him, he must in turn serve notice by copy upon the parties plaintiff and defendant in the action or upon, their attorneys.” Sections 2153 and 2154 provide:

Section 2153: “The officer serving said notice and claim shall forthwith, after such service of the same, make return thereof, showing such service, where and how made. Service may be made in any case at any time before the actual sale of the property levied upon in such pending action, and unless such claim is disputed by the debtor or a creditor or party plaintiff, such officer must pay such person out of the proceeds of the sale the amount he is entitled to receive for services rendered within the sixty days next preceding the levy of the writ, not exceeding two hundred dollars.. If any: or all of the claims so presented, and claiming preference under this chapter, are disputed by either the debtor or a creditor, the person presenting the same must commence an action within ten days after notice of such dispute is served npon such claimant, as provided for in the next section, for the recovery thereof; and the officer must retain possession of so much of the proceeds of the sale as may be necessary to satisfy such claim and costs until the final determination of such action; and in case judgment be had, the costs are a preferred claim, which may include a reasonable attorney’s fee.”

Section 2154: “The debtor or creditor intending to dispute any claim presented under the provisions of the last section shall, within ten days after receiving notice of such claim, serve upon the claimant and officer holding such execution, attachment or other writ, a statement in -writing, verified by the oath of the debtor or person disputing such claim, for services, setting forth that no part of said claim, not exceeding a sum specified, is justly due from the debtor to the claimant for services rendered within the sixty days next preceding the levy of the execution, attachment or other writ, as the case may be. If the claimant bring suit on a claim) which is disputed in part only, and fail to recover a sum exceeding that which was admitted to be due, he shall not recover costs, but costs shall be adjudged against him; and where such claimant fails to bring suit upon his claim, which is disputed in part only, he shall be deemed to have waived that portion of his claim disputed.”

Under Section 2155 the claimant is entitled to a lien for the amount of his preferred claim upon the property “attached or levied upon,” which must be discharged by the sheriff. The general purpose of these provisions is to declare a lien in favor of the classes of persons enumerated, and to furnish an easy and expeditious means of foreclosing it. If the claim is not disputed, no other step is required of the claimant than to give ■the notice. If it is disputed in whole or in part, then an action must be brought- in the proper court within ten days after notice of such dispute, and' be prosecuted to judgment. In the meantime the sheriff must retain the property, or a sufficient amount of the fund derived from a sale of it, to pay the claim, with costs, including an attorney's fee. If no> action is brought, it is his duty, after the expiration of the time' within which it may be brought, to appropriate the property, or the fund derived from its sale, to the satisfaction of the attaching creditor’s claim. In such case the claimant is conclusively presumed to have waived his lien.

The requirement touching the notice to be given by the attaching creditor makes necessary an inquiry by the court whether the claim or any part of it accrued within sixty days prior to the levy; for the claim ma.y be valid, as against the debtor, in whole or in part, .yet, if no part of it accrued within sixty days prior to the levy, the claimant is not entitled to a preference. It is a fair inference from all the provisions, however, that the claimant may establish in the same action the whole amount of his claim, and be declared entitled to a lien for so much of it, not exceeding $200, as accrued within the prescribed limit. Indeed, we think he must do so; otherwise, if a part of his claim is secured and a part not, he must remit the unsecured portion of it in order to avail himself of the lien provided to' secure the payment of the remainder. The statute does not require this. Nor may he be permitted to split his cause of action.

Neither the sheriff nor the attaching creditor is a necessary or proper party to the action. If the attaching creditor deems it advisable, he may, perhaps, intervene and contest the questions whether or not the claim falls within the class covered by the statute, and whether or not the claim or any part of it accrued within sixty days prior to the date of the levy, because he is interested in it so far as the result may be to fix a prior lien upon the property held under the writ or the fund derived from the sale of it; but he is not required to do so. He has done the claimant no wrong on account of which he may be made a defendant in the first instance. Nor has the sheriff done the claimant a wrong by which he may be made a defendant. He is simply required by the statute to' retain the property or the fund until the termination of the action. If he presumes to appropriate tbe property or fund in violation of tbe claimant’s rights, be does SO' at bis peril. Before proceeding to appropriate it, he must ascertain whether tbe plaintiff has established bis lien. He is liable for a violation of bis duty in this regard, but not otherwise.

The question as to what court has jurisdiction to ascertain the rights of the respective parties is not clear. The theory of counsel for respondent and of the district court seems to have been that it is necessary to impound the property or fund in the hands of the sheriff, and to- have him and the attaching creditors before the court, in order to adjust the rights involved and direct the appropriation of the fund derived from the sale of the property; or, making the statement in a different form, that the purpose of the proceeding is to foreclose the lien of the plaintiff and direct the application of the fund to the payment of the attaching creditors and the plaintiff, according to their respective priorities. That this is so is apparent from the fact that judgment was sought for $200 only, the remainder of the claim being apparently remitted. It is apparent, also; from the form of the judgment entered, which. granted recovery as against Huffman only, but directed the sheriff to satisfy the amount of the recovery out of property held under the levy. The theory of the statute is that by the judgment not only is the fact to be ascertained that an amount is due, but also whether this amount, or any part of it, is a lien. The judgment must also fix an attorney’s fee; if the lien is established for any amount. Hence, so- far as the action is for the purpose of establishing the lien, we are of the opinion that it is equitable in its nature, and must be commenced and prosecuted in a court having jurisdiction of actions in equity. As against the debtor the proceeding is to- recover a debt; as against the attaching creditor it is to- establish and enforce a prior lien, for he is not concerned about the question whether any amount whatever is due the plaintiff, except so far as it affects his prior lien under the levy. When, therefore, the judgment has been entered in the proper form upon necessary findings of fact, so much of the amount as lias accrued within sixty days, not exceeding $200, is a lien upon the property, and nothing is left for the court to do but to order the sheriff to discharge it. In short, the proceeding is instituted and prosecuted for the purpose of establishing and foreclosing a lien, and the result is tantamount to a decree of foreclosure.

' In general, therefore, the theory of the plaintiff and the district court was correct, though the sheriff and the attaching creditors were unnecessarily made parties. But justice of the peace courts have no equity jurisdiction, nor can they entertain actions which involve matters of equitable cognizance. Their powers are such as are conferred by statute, subject to limitations laid down in the constitution. One of the limitations imposed upon the legislature by that instrument is that justices of the peace shall have no jurisdiction of equity cases (Const. Art. VIII, Sec. 21), and the sections of the statute enumerating the classes of cases of which they may take cognizance (Code of Civil Procedure, Secs. 60-68) confine them strictly to the constitutional limitations. Having no original jurisdiction of equity cases, it must follow that the district court acquired no jurisdiction of this action by virtue of the appeal, for the jurisdiction of the appellate court is not greater than that of the inferior court. If the particular cause is one of which the latter court cannot take jurisdiction, the former cannot entertain it for any other purpose than to dismiss it and enter judgment for costs against the appellant. (Missoula E. L. Co. v. Morgan, 13 Mont. 396, 34 Pac. 488.) While the justice’s court had jurisdiction of the action as against Huffman for the purpose of establishing the debt, it had no jurisdiction for the purpose of establishing a lien. Hence it must follow that the district court erred in refusing to sustain the motion for nonsuit as to the other defendants.

It is apparent from the record that no lien could be established in this action, for the defendant Huffman was not made a party to it until after the expiration of ten days after the date of the notice that the claim of appellant was disputed. The action was not commenced against bim until lie was, made a party. Plaintiff bad therefore waived bis right of lien.

The order is therefore reversed, and the cause is remanded to the district court, with directions to dismiss the action as to appellant.

Reversed and remanded.