A citizen of North Carolina who owed money to another citizen of
that state, was, while temporarily in Maryland, garnisheed by a
creditor of the man to whom he owed the money. Judgment was duly
entered according to Maryland practice, and paid. Thereafter, the
garnishee was sued in North Carolina by the original creditor and
set up the garnishee judgment and payment, but the North Carolina
courts held that, as the situs of the debt was in North Carolina,
the Maryland judgment was not a bar, and awarded judgment against
him.
Held, error and that:
As, under the laws of Maryland, the garnishee could have been
sued by his creditor in the courts of that state, he was subject to
garnishee process if found and served in the state, even though
only there temporarily, no matter where the situs of the debt was
originally.
Attachment is the creature of the local law, and power over the
person of the garnishee confers jurisdiction on the courts of the
state where the writ issues. A judgment against a garnishee,
properly obtained according to the law of the state and paid, must,
under the full faith and credit clause of the federal Constitution,
be recognized as a payment of the original debt by the courts of
another state in an action brought against the garnishee by the
original creditor.
Where there is absolutely no defense and the plaintiff is
entitled to recover, there is no reason why the garnishee should
not consent to a judgment impounding the debt, and his doing so
does not amount to such a voluntary payment that he is not
protected thereby under the full faith and credit clause of the
Constitution.
While it is the object of the courts to prevent the payment of
any debt
Page 198 U. S. 216
twice over, the failure on the part of the garnishee to give
proper notice to his creditor of the levying of the attachment
would be such neglect of duty to his creditor as would prevent him
from availing of the garnishee judgment as bar to the suit of the
creditor, and thus oblige him to pay the debt twice.
The plaintiff in error brings the case here in order to review
the judgment of the Supreme Court of North Carolina affirming a
judgment of a lower court against him for $180, with interest, as
stated therein. The case has been several times before the Supreme
Court of that state, and is reported in 122 N.C. 64, again, 124
N.C. 467. The opinion delivered at the time of entering the
judgment now under review is to be found in 130 N.C. 381.
And
see also 132 N.C. 10.
The facts are as follows: the plaintiff in error, Harris, was a
resident of North Carolina at the time of the commencement of this
action in 1896, and prior to that time was indebted to the
defendant in error, Balk, also a resident of North Carolina, in the
sum of $180, for money borrowed from Balk by Harris during the year
1896, which Harris verbally promised to repay, but there was no
written evidence of the obligation. During the year above
mentioned, one Jacob Epstein, a resident of Baltimore, in the State
of Maryland, asserted that Balk was indebted to him in the sum of
over $300. In August, 1896, Harris visited Baltimore for the
purpose of purchasing merchandise, and while he was in that city
temporarily on August 6, 1896, Epstein caused to be issued out of a
proper court in Baltimore a foreign or nonresident writ of
attachment against Balk, attaching the debt due Balk from Harris,
which writ the sheriff at Baltimore laid in the hands of Harris,
with a summons to appear in the court at a day named. With that
attachment, a writ of summons and a short declaration against Balk
(as provided by the Maryland statute) were also delivered to the
sheriff, and by him set up at the courthouse door, as required by
the law of Maryland. Before the return day of the attachment writ,
Harris left Baltimore and returned to his home in North Carolina.
He did not contest the garnishee
Page 198 U. S. 217
process, which was issued to garnish the debt which Harris owed
Balk. After his return, Harris made an affidavit on August 11,
1896, that he owed Balk $180, and stated that the amount had been
attached by Epstein, of Baltimore, and, by his counsel in the
Maryland proceeding, Harris consented therein to an order of
condemnation against him as such garnishee for $180, the amount of
his debt to Balk. Judgment was thereafter entered against the
garnishee and in favor of the plaintiff, Epstein, for $180. After
the entry of the garnishee judgment, condemning the $180 in the
hands of the garnishee, Harris paid the amount of the judgment to
one Warren, an attorney of Epstein, residing in North Carolina. On
August 11, 1896, Balk commenced an action against Harris before a
justice of the peace in North Carolina, to recover the $180 which
he averred Harris owed him. The plaintiff in error, by way of
answer to the suit, pleaded in bar the recovery of the Maryland
judgment and his payment thereof, and contended that it was
conclusive against the defendant in error in this action, because
that judgment was a valid judgment in Maryland, and was therefore
entitled to full faith and credit in the courts of North Carolina.
This contention was not allowed by the trial court, and judgment
was accordingly entered against Harris for the amount of his
indebtedness to Balk, and that judgment was affirmed by the Supreme
Court of North Carolina. The ground of such judgment was that the
Maryland court obtained no jurisdiction to attach or garnish the
debt due from Harris to Balk, because Harris was but temporarily in
the state, and the situs of the debt was in North Carolina.
Page 198 U. S. 221
MR. JUSTICE PECKHAM, after making the foregoing statement,
delivered the opinion of the Court.
The state court of North Carolina has refused to give any effect
in this action to the Maryland judgment, and the federal question
is whether it did not thereby refuse the full faith and credit to
such judgment which is required by the federal Constitution. If the
Maryland court had jurisdiction to award it, the judgment is valid
and entitled to the same full faith and credit in North Carolina
that it has in Maryland as a valid domestic judgment.
The defendant in error contends that the Maryland court obtained
no jurisdiction to award the judgment of condemnation because the
garnishee, although at the time in the State of Maryland and
personally served with process therein, was a nonresident of that
state, only casually or temporarily within its boundaries; that the
situs of the debt due from Harris, the garnishee, to the defendant
in error herein was in North Carolina, and did not accompany Harris
to Maryland; that consequently, Harris, though within the State of
Maryland, had not possession of any property of Balk, and the
Maryland state court therefore obtained no jurisdiction over any
property of Balk in the attachment proceedings, and the consent of
Harris to the entry of the judgment was immaterial. The plaintiff
in error, on the contrary, insists that, though the garnishee were
but temporarily in Maryland, yet the laws of that state provide for
an attachment of this nature if the debtor, the garnishee, is found
in the state, and the court obtains jurisdiction over him by the
service of process therein; that the judgment, condemning the debt
from Harris to Balk, was a valid judgment, provided Balk could
himself have sued Harris for the debt in Maryland. This, it is
asserted, he could have done, and the judgment was therefore
entitled to full faith and credit in the courts of North
Carolina.
The cases holding that the state court obtains no jurisdiction
over the garnishee if he be but temporarily within the state
Page 198 U. S. 222
proceed upon the theory that the situs of the debt is at the
domicil either of the creditor or of the debtor, and that it does
not follow the debtor in his casual or temporary journey into
another state, and the garnishee has no possession of any property
or credit of the principal debtor in the foreign state.
We regard the contention of the plaintiff in error as the
correct one. The authorities in the various state courts upon this
question are not at all in harmony. They have been collected by
counsel, and will be found in their respective briefs, and it is
not necessary to here enlarge upon them.
Attachment is the creature of the local law -- that is, unless
there is a law of the state providing for and permitting the
attachment, it cannot be levied there. If there be a law of the
state providing for the attachment of the debt, then, if the
garnishee be found in that state and process be personally served
upon him therein, we think the court thereby acquires jurisdiction
over him, and can garnish the debt due from him to the debtor of
the plaintiff, and condemn it, provided the garnishee could himself
be sued by his creditor in that state. We do not see how the
question of jurisdiction
vel non can properly be made to
depend upon the so-called original situs of the debt, or upon the
character of the stay of the garnishee, whether temporary or
permanent, in the state where the attachment is issued. Power over
the person of the garnishee confers jurisdiction on the courts of
the state where the writ issues.
Blackstone v. Miller,
188 U. S. 189-206.
If, while temporarily there, his creditor might sue him there and
recover the debt, then he is liable to process of garnishment, no
matter where the situs of the debt was originally. We do not see
the materiality of the expression "situs of the debt," when used in
connection with attachment proceedings. If by situs is meant the
place of the creation of the debt, that fact is immaterial. If it
be meant that the obligation to pay the debt can only be enforced
at the situs thus fixed, we think it plainly untrue. The obligation
of the debtor to pay his debt clings to and accompanies him
wherever he goes. He is as
Page 198 U. S. 223
much bound to pay his debt in a foreign state when therein sued
upon his obligation by his creditor as he was in the state where
the debt was contracted. We speak of ordinary debts, such as the
one in this case. It would be no defense to such suit for the
debtor to plead that he was only in the foreign state casually or
temporarily. His obligation to pay would be the same whether he was
there in that way or with an intention to remain. It is nothing but
the obligation to pay which is garnished or attached. This
obligation can be enforced by the courts of the foreign state,
after personal service of process therein, just as well as by the
courts of the domicil of the debtor. If the debtor leave the
foreign state without appearing, a judgment by default may be
entered, upon which execution may issue, or the judgment may be
sued upon in any other state where the debtor might be found. In
such case, the situs is unimportant. It is not a question of
possession in the foreign state, for possession cannot be taken of
a debt or of the obligation to pay it, as tangible property might
be taken possession of. Notice to the debtor (garnishee) of the
commencement of the suit, and notice not to pay to his creditor, is
all that can be given, whether the garnishee be a mere casual and
temporary comer or a resident of the state where the attachment is
laid. His obligation to pay to his creditor is thereby arrested,
and a lien created upon the debt itself.
Cahoon v. Morgan,
38 Vt. 236;
National Fire Ins. Co. v. Chambers, 53 N.J.Eq.
468, 483. We can see no reason why the attachment could not be thus
laid, provided the creditor of the garnishee could himself sue in
that state, and its laws permitted the attachment.
There can be no doubt that Balk, as a citizen of the State of
North Carolina, had the right to sue Harris in Maryland to recover
the debt which Harris owed him. Being a citizen of North Carolina,
he was entitled to all the privileges and immunities of citizens of
the several states, one of which is the right to institute actions
in the courts of another state. The law of Maryland provides for
the attachment of credits in a
Page 198 U. S. 224
case like this.
See sections 8 and 10 of Article 9 of
the Code of Public General Laws of Maryland, which provide that,
upon the proper facts' being shown (as stated in the article), the
attachment may be sued out against lands, tenements, goods, and
credits of the debtor. Section 10 particularly provides that
"any kind of property or credits belonging to the defendant, in
the plaintiff's own hands, or in the hands of any one else, may be
attached, and credits may be attached which shall not then be
due."
Sections 11, 12, and 13 of the above-mentioned article provide
the general practice for levying the attachment, and the
proceedings subsequent thereto. Where money or credits are
attached, the inchoate lien attaches to the fund or credits when
the attachment is laid in the hands of the garnishee, and the
judgment condemning the amount in his hands becomes a personal
judgment against him.
Buschman v. Hanna, 72 Md. 1, 5-6.
Section 34 of the same Maryland Code provides also that this
judgment of condemnation against the garnishee, or payment by him
of such judgment, is pleadable in bar to an action brought against
him by the defendant in the attachment suit for or concerning the
property or credits so condemned.
It thus appears that Balk could have sued Harris in Maryland to
recover his debt, notwithstanding the temporary character of
Harris' stay there; it also appears that the municipal law of
Maryland permits the debtor of the principal debtor to be
garnished, and therefore if the court of the state where the
garnishee is found obtains jurisdiction over him, through the
service of process upon him within the state, then the judgment
entered is a valid judgment.
See Minor on Conflict of
Laws, ยง 125, where the various theories regarding the subject are
stated and many of the authorities cited. He there cites many cases
to prove the correctness of the theory of the validity of the
judgment where the municipal law permits the debtor to be
garnished, although his being within the state is but temporary.
See pp. 289, 290. This is the doctrine which is also
adopted in
Morgan v. Neville, 74 Pa. 52, by the
Page 198 U. S. 225
Supreme Court of Pennsylvania, per Agnew, J., in delivering the
opinion of that court. The same principle is held in
Wyeth
Hardware &c. Co. v. Lang, 127 Mo. 242, 247; in
Lancashire Ins. Co. v. Corbetts, 165 Ill. 592, and in
Harvey v. Great Northern Ry. Co., 50 Minn. 405, 406-407,
and to the same effect is
Embree v. Hanna, 5 Johns. 101;
also
Savin v. Bond, 57 Md. 228, where the court held that
the attachment was properly served upon a party in the District of
Columbia while he was temporarily there; that as his debt to the
appellant was payable wherever he was found, and process had been
served upon him in the District of Columbia, the Supreme Court of
the District had unquestioned jurisdiction to render judgment, and
the same having been paid, there was no error in granting the
prayer of the appellee that such judgment was conclusive. The case
in 138 N.Y. 209,
Douglass v. Phenix Ins. Co., is not
contrary to this doctrine. The question there was not as to the
temporary character of the presence of the garnishee in the State
of Massachusetts, but, as the garnishee was a foreign corporation,
it was held that it was not within the State of Massachusetts so as
to be liable to attachment by the service upon an agent of the
company within that state. The general principle laid down in
Embree v. Hanna, 5 Johns. 110, was recognized as correct.
There are, as we have said, authorities to the contrary, and they
cannot be reconciled.
It seems to us, however, that the principle decided in
Chicago, R.I. &c. Ry. Co. v. Sturm, 174 U.
S. 710, recognizes the jurisdiction, although in that
case it appears that the presence of the garnishee was not merely a
temporary one in the state where the process was served. In that
case, it was said:
"'All debts are payable everywhere unless there be some special
limitation or provision in respect to the payment; the rule being
that debts, as such, have no locus or situs, but accompany the
creditor everywhere, and authorize a demand upon the debtor
everywhere.' 2 Parsons, Contracts, 8th ed. 702 (8th ed. 702). The
debt involved in the pending
Page 198 U. S. 226
case had no 'special limitation or provision in respect to
payment.' It was payable generally,
and could have been sued on
in Iowa, and therefore was attachable in Iowa. This is the
principle and effect of the best considered cases -- the inevitable
effect from the nature of transitory actions and the purpose of
foreign attachment laws, if we would enforce that purpose."
The case recognizes the right of the creditor to sue in the
state where the debtor may be found, even if but temporarily there,
and upon that right is built the further right of the creditor to
attach the debt owing by the garnishee to his creditor. The
importance of the fact of the right of the original creditor to sue
his debtor in the foreign state, as affecting the right of the
creditor of that creditor to sue the debtor or garnishee, lies in
the nature of the attachment proceeding. The plaintiff in such
proceeding in the foreign state is able to sue out the attachment
and attach the debt due from the garnishee to his (the garnishee's)
creditor, because of the fact that the plaintiff is really, in such
proceeding, a representative of the creditor of the garnishee, and
therefore if such creditor himself had the right to commence suit
to recover the debt in the foreign state, his representative has
the same right, as representing him, and may garnish or attach the
debt, provided the municipal law of the state where the attachment
was sued out permits it.
It seems to us, therefore, that the judgment against Harris in
Maryland, condemning the $180 which he owed to Balk, was a valid
judgment, because the court had jurisdiction over the garnishee by
personal service of process within the State of Maryland.
It ought to be and it is the object of courts to prevent the
payment of any debt twice over. Thus, if Harris, owing a debt to
Balk, paid it under a valid judgment against him, to Epstein, he
certainly ought not to be compelled to pay it a second time, but
should have the right to plead his payment under the Maryland
judgment. It is objected, however, that the payment by Harris to
Epstein was not under legal compulsion.
Page 198 U. S. 227
Harris in truth owed the debt to Balk, which was attached by
Epstein. He had, therefore, as we have seen, no defense to set up
against the attachment of the debt. Jurisdiction over him
personally had been obtained by the Maryland court. As he was
absolutely without defense, there was no reason why he should not
consent to a judgment impounding the debt, which judgment the
plaintiff was legally entitled to, and which he could not prevent.
There was no merely voluntary payment within the meaning of that
phrase as applicable here.
But most rights may be lost by negligence, and if the garnishee
were guilty of negligence in the attachment proceeding, to the
damage of Balk, he ought not to be permitted to set up the judgment
as a defense. Thus, it is recognized as the duty of the garnishee
to give notice to his own creditor, if he would protect himself, so
that the creditor may have the opportunity to defend himself
against the claim of the person suing out the attachment. This duty
is affirmed in the case above cited of
Morgan v. Neville,
74 Pa. 52, and is spoken of in
Railroad Co. v. Sturm,
supra, although it is not therein actually decided to be
necessary, because in that case notice was given and defense made.
While the want of notification by the garnishee to his own creditor
may have no effect upon the validity of the judgment against the
garnishee (the proper publication being made by the plaintiff), we
think it has and ought to have an effect upon the right of the
garnishee to avail himself of the prior judgment and his payment
thereunder. This notification by the garnishee is for the purpose
of making sure that his creditor shall have an opportunity to
defend the claim made against him in the attachment suit. Fair
dealing requires this at the hands of the garnishee. In this case,
while neither the defendant nor the garnishee appeared, the court,
while condemning the credits attached, could not, by the terms of
the Maryland statute, issue the writ of execution unless the
plaintiff gave bond or sufficient security before the court
awarding the execution to make restitution of the money paid if the
defendant should at any time within a year and a day
Page 198 U. S. 228
appear in the action and show that the plaintiff's claim, or
some part thereof, was not due to the plaintiff. The defendant in
error, Balk, had notice of this attachment, certainly within a few
days after the issuing thereof and the entry of judgment thereon,
because he sued the plaintiff in error to recover his debt within a
few days after his (Harris') return to North Carolina, in which
suit the judgment in Maryland was set up by Harris as a plea in bar
to Balk's claim. Balk therefore had an opportunity for a year and a
day after the entry of the judgment to litigate the question of his
liability in the Maryland court, and to show that he did not owe
the debt, or some part of it, as was claimed by Epstein. He,
however, took no proceedings to that end, so far as the record
shows, and the reason may be supposed to be that he could not
successfully defend the claim, because he admitted in this case
that he did at the time of the attachment proceeding, owe Epstein
some $344.
Generally, though, the failure on the part of the garnishee to
give proper notice to his creditor of the levying of the attachment
would be such a neglect of duty on the part of the garnishee which
he owed to his creditor as would prevent his availing himself of
the judgment in the attachment suit as a bar to the suit of his
creditor against himself, which might therefore result in his being
called upon to pay the debt twice.
The judgment of the Supreme Court of North Carolina must be
reversed, and the cause remanded for further proceedings not
inconsistent with the opinion of this Court.
Reversed.
MR. JUSTICE HARLAN and MR. JUSTICE DAY dissented.
