Cruett v. Jenkins

Bartol, C. J., delivered the opinion of the Court. On the first day of March 1876, an attachment was issued on a judgmenkof the appellees against MacWilliams, which was laid in the hands of the appellant, garnishee, on the following day; the garnishee appeared by attorney and pleaded nulla bona; the trial took place in October 1878, and resulted in a verdict and judgment of condemnation in favor of the plaintiffs; from which this appeal has been taken. It appeared in proof that on the 4th day of December 1875, the garnishee was indebted to MacWilliams in the sum of $13,000, for which the latter held his eight negotiable promissory notes payable in one, two, three and four years after date, and secured by a mortgage; eight thousand dollars of .the notes had matured at the date of the trial, but none of them were due when the attachment was served. It appeared that the notes were endorsed by MacWilliams and delivered to W. W. Jones for value, before maturity, but whether before or after the attachment the evidence was conflicting; this question was how ever submitted to the jury, who determined that at the time the writ of attachment was served, MacWilliams, the payee, held the/notes, sufficient in amount to satisfy the judgment of the appellees; and upon finding the facts before stated their verdict under the instruction of the Court was found for the plaintiffs. ²²² The appellant’s exception is to the granting of this instruction, and the refusal of his second prayer, which asserts the proposition, that if the promissory notes were all, before maturity, endorsed over by MacWilliams to Jones, bona fide and for value, when Jones had no notice of the attachment proceedings, and that he continued to hold the same, the verdict must be for the garnishee.

The question presented by the appeal is one of very great interest and importance. As succinctly stated in the appellant’s brief, it is “ whether the maker of a negotiable promissory note should be charged as the garnishee of- the payee, under an attachment served before the maturity of the note, where before maturity, the note has been endorsed to a bona fide holder for value, without notice to him of the attachment.” Under the law merchant which prevails in this State, where the Statutes of 3rd and 4th Anne are in force, the bona fide endorsee for value of a negotiable promissory note, who takes it before maturity, is protected against all equitable defences which might exist between the original parties. It would seem to be inconsistent with reason, and contrary to public policy to hold that his rights may be defeated or impaired, by a proceeding to which he is not a party, instituted by a stranger against the maker of the note. The object of the attachment law is to subject the property and credits of the debtor to the payment of his debt; when laid in the hands of a garnishee, it binds whatever he may hold belonging to the debtor, and any money he may owe to and be liable to pay to the debtor; but when his liability exists in the form of a negotiable promissory note, which by the statute is transferable, by endorsement, and passes from hand to hand, it cannot be asserted while the note is current and not mature, that the debt is due to the payee, it is by its terms payable, not to the payee, but to any one into whose hands the note may come by endorsement. ²²³ The difficulty of subjecting credits of that kind to the process of garnishment, is to he found not only in the nature and character of negotiable paper; but also in placing the garnishee in a worse condition than he otherwise would be, and subjecting him to the danger of having to pay the same debt twice.over; for if a judgment of condemnation be recovered against him, its payment would not serve as a defence against a suit upon the note by a bona fide endorsee for value, who received it before maturity, without notice of the attachment.

The rights of the endorsee could be in no manner