Shelton v. Wolthausen

The plaintiff is, and during the whole period covered by the events which have culminated in the present controversy has been, the clerk of the Superior Court in Fairfield County. The fund here involved is the balance of a larger one which was by order of said court, passed in an action therein pending, paid into court and into the plaintiff's hands as its depositary. That action was one in the nature of an interpleader brought by parties who were obligated to pay the amount so ordered to be paid into court and against two defendants who made conflicting claims upon the plaintiffs therefor, and the court was asked, in the exercise of its equitable powers, to adjudicate the rights of the claimants, and to award the fund to the person or persons found entitled to it. The money thus deposited with this plaintiff passed into the custody of the law. It was the res which was the subject-matter of the action brought to determine its ownership and disposition. Such being its status, the court alone had authority over it, and that authority was one which could be properly exercised only through the medium of proceedings had in or relating to the pending cause. The jurisdiction which the court had over it could not be invaded by scire facias proceedings in the Court of Common Pleas, or, for that matter, any other court. Its disposition could not be controlled from without or through any other channels than those which the law provides as incidental to a pending action. Methods are provided whereby persons asserting claims, new or old, to funds thus in court awaiting judicial disposition, may present such claims to the consideration of the court, being admitted as parties for that purpose, if strangers to the cause. It became the privilege of the Hat Company, already a party, if it conceived that it had acquired a new status in relation to the money remaining in court, or a new right to share in it, to interpose that claim. It was likewise the privilege of Wilson, as assignee of Settle, to apply to intervene in the action, and assert any claim which he thought that his situation justified. By no other course could either reach the fund and release it or any part of it from the judicial grasp which was upon it. This plaintiff, as the officer and depositary of the court, could recognize no other authority than that which placed the money in his hands pending adjudication and judgment of distribution. Tuck v. Manning,150 Mass. 211, 215, 22 N.E. 1001.

But that is not all. We have thus far considered the situation presented upon the assumption that no order of distribution of the balance now in contention had been made in the original action. Such, however, is not the fact. The balance, which the Hat Company and Wilson now claim, and which in the present action has been ordered paid to the Hat Company, was by the terms of the order passed in that action April 2d 1903, directed to be paid to the Essex County Trust Company, one of the then parties claimant, and the present plaintiff was ordered to so pay it. Such was the situation when the present proceeding was begun, and such it is today. The authority alone having jurisdiction to adjudicate as to the disposition of this res had adjudicated. The authority alone competent to command this plaintiff as to his conduct with it had commanded. The present resort to an independent action was therefore misconceived and irregular, as being in disregard of the plaintiff's relation to the money in his hands, of the authority of the court over it in the pending action, and of the order of the court passed therein, or, if it be that the authority of the court in that action had been finally exercised and final judgment rendered, then of the terms of that final judgment, and the present judgment awarding the fund to the Hat Company must, for that reason, be set aside.

The Hat Company's claim to the fund rests solely upon its institution of an action against Settle in which the plaintiff was named as garnishee, the service of the writ and complaint upon the latter, as required in garnishment proceedings, the rendition of final judgment in said action in favor of the Hat Company, the issuance of an execution thereon, and a demand thereunder upon the plaintiff. In answer to this claim it is urged that the money in the plaintiff's hands, being in the custody of the law, could not be made the subject of foreign attachment. The Hat Company asserts the contrary proposition. The facts before us disclose a decree of the court directing that the money in controversy be paid to a third party. We have no occasion, therefore, to determine the broad general question, to which the arguments of counsel were for the most part addressed, as to whether or not a fund deposited in court, as this was, can under our statutes be made the subject of foreign attachment with any effect. It is of course plain from what has already been said that it cannot, with the usual consequence that judgment may be followed by scire facias proceedings to appropriate the fund. The field of inquiry in this direction is, however, not exhausted in this statement. But we have no occasion to traverse it. See Conover v. Ruckman, 33 N.J. Eq. 303;Trotter v. Lehigh Z. I. Co., 41 id. 229, 3 A. 95; Dunlop v. Patterson Fire Ins. Co., 74 N.Y. 145; Wehle v.Conner, 83 id. 231; Tuck v. Manning, 150 Mass. 211,22 N.E. 1001; Colby v. Coates, 6 Cush. (Mass.) 558; Allen v. Gerard, 21 Rawle I. 467, 44 A. 592; Winchell v. Allen,1 Conn. 385; Stillman v. Isham, 11 id. 124. Neither have we occasion to decide the narrower question, sometimes distinguished from the former, as to the effect of garnishment proceedings upon a fund so placed in the hands of a depositary by order of court after the ownership of it has been adjudicated and an order paying it to the defendant in the attachment action has been passed. See Wilbur v.Flannery, 60 Vt. 581; Williams v. Jones, 38 Md. 555. The situation before us presents other controlling features.

A factorizing creditor can acquire no greater right to the effects of the defendant in the hands of the garnishee, or to any debt owing from the garnishee to the defendant or against the garnishee, than the defendant himself had at the time of the garnishment, unless it may be in cases of voluntary or fraudulent conveyances. He can only succeed in putting himself into the position with respect to the effects or debts attached that the defendant occupied.Fitch v. Waite, 5 Conn. 117, 122; Harris v. Phoenix Ins. Co., 35 id. 310, 312; Parsons v. Root, 41 id. 161, 166. Settle was the defendant in the action of the Hat Company. It was, therefore, his debt due from the present plaintiff that was sought to be attached. It was his position with respect to this plaintiff and the fund in his custody into which, giving the attempted garnishment all the effect that such proceedings ever have, the Hat Company could claim to have been admitted. Settle, however, when the attachment was served upon Shelton, had no claim to any of the money in the latter's hands. All of that now in controversy had been awarded to the Trust Company, and Shelton was under the orders of the court to pay it to that company. Until that judicial award and order should be revoked, as it never has been, Settle was powerless to assert any claim against Shelton or to the fund in his keeping.

Furthermore, the money in court was the proceeds of a payment by Wolthausen and Bouton in satisfaction of a judgment in favor of the Trust Company. The order of April 2d 1903, which made disposition of this fund, recognized the force of this judgment and the rights it gave, save as they were affected by the equities of the situation created by the Hat Company's garnishment of Wolthausen and Bouton prior to the assignment of the note to the Trust Company. Settle's position and rights when the second garnishment was made must be determined in the light not only of the order of April 2d 1903, but also of the judgment which lay back of that order, which, together, made the legal right of the Trust Company to collect and receive the money complete and denied to Settle any right to receive it, save by force of the Trust Company's duty to account to him for it after it should have received it. Whatever interest Settle may have had to the money in the plaintiff's hands had none other than an equitable foundation, and equitable interests are not the subjects of foreign attachment, save as special statutes may have made them so. Judah v. Judd, 1 Conn. 309; Candee v. Penniman, 32 id. 228, 239; Armstrong v. Cowles, 44 id. 44, 50; Chase v. Thompson, 153 Mass. 14, 16, 26 N.E. 137; Burnham v.Hopkinson, 17 N. H. 259, 260. The trial court, therefore, erred in giving to the garnishment of the plaintiff the effect it did in awarding the fund to the Espencheid Hat Company.

There is error and the judgment is reversed.

In this opinion the other judges concurred.