Jordan v. Harmon

Barrows, J.

If a creditor would make the goods, effects or credits of his debtor, in the hands and possession of an alleged trustee available for the payment of his debt, he must pursue the course prescribed by the statutes regulating trustee process. He cannot have an adjudication against the trustee which will expose the trustee to litigation with any third party whose claim to the fund by virtue of an assignment from the principal debtor, or in any other way, has been made known by the trustee in his disclosure.

In E. S., c. 86, § 32, the course which the plaintiff must take in such case is marked out. Unless the party named in the disclosure as asserting a claim to the fund voluntarily appears, it is incumbent upon the plaintiff to cite him in. If, after such citation, he does not appear in person or by attorney (or if, appearing, he fails to maintain his claim by due proof,) the assignment shall have no effect to defeat the plaintiff’s attachment.

But his rights cannot be judicially determined until he is made a party to the suit either by his own voluntary act, or by a citation from the court at the instance of the plaintiff. If the plaintiff fails to put the case into such a position that there may be a conclusive determination as to the validity of the assignee’s claim before the trustee’s disclosure is presented to the court for final adjudication, the court must discharge the trustee. He must not put the possible burden of a future controversy with the claimant on the trustee. It was for the plaintiff to have that question settled, and the validity of his attachment so far as that might affect it, ascertained before he called upon the court to pass upon the disclosure.

Unless he takes the proper steps as directed by the statute to remove the obstacle, the claim of the third party thus disclosed will "have the effect to defeat his attachment.” Burnell v. Weld, & trustee, 59 Maine, 423, and cases there cited. It may be true as plaintiff’s counsel contends that after Judkins hadinformed Harmon of Ms reception of the money from the paymaster to pay the sum due to Harmon as wages from the railroad company, and proposed to pay it over to him, and Harmon had directed him to pay it to John Smith or keep it till evening when it could be fixed up, the money, so far as the principal defendant had any interest in it, was so deposited in Judkin’s hands, that, in á suit for necessaries, he might be held as trustee of Harmon.

But the disclosure shows, at the same time that the fund was claimed by John Smith; and the plaintiff instead of pursuing the course pointed out by the statute to secure a determination of the question between himself and Smith, asks us to ignore Smith’s claim or hold that it is not valid without giving him an opportunity to be heard.

The court below rightly refused to do this and discharged the trustee.

Exceptions overruled.

Appleton, C. J., Walton, Daneorth and Virgin, JJ., concurred.