Moreau River State Bank v. Japinga

158 N.W. 786, 37 S.D. 404, 2 A.L.R. 504, 1916 S.D. LEXIS 73

• Court: South Dakota Supreme Court
• Decided: July 10, 1916
• Docket: File No. 3918
• Status: Published

Opinions

WHITING, J.

Appeal -from a judgment in favor of a garnishee and from an order denying a new trial.

It is -the contention of appellant - .that respondent became indebted to the main defendant through the purchase from him'-of certain real estate, and that such indebtedness was reached,.by the garnishee process herein. The trial court found that the real estate deal was a cash transaction in which full payment was made upon receipt of deed. Appellant concedes that, if this were true, there never arose any liability of the grantee to- the grantor that could be reached by garnishee process.

[1] But .appellant contends that a contract for the sale of the real property was entered into several days prior to- the service of the garnishment summons; that the deal was not consummated by a payment of the contract price until after service of such summons; and that therefore respondent 'became liable as garnishee to the amount unpaid on 'such contract at the time such summons was served. There is no merit in this contention, because, if the trial court was in error in finding that this real estate deal was entered into' and consummated at one time — and we do not think the court was in error in so holding- — yet it is clear that there was no time, prior ho the delivery of the deed, when there was any absolute liability existing from the grantee to the grantor; the grantee's liability, if any, was contingent upon- the giving of the deed, and therefore was not subject to be reached by garnishment unless it continued after the deed was -delivered. 20 Cyc. 1007; Nat. Rev. Bk. v. Bay State, etc., 67 N. H. 371, 40 Atl. 255; Briggs v. McEwen, 77 Iowa, 303, 42 N. W. 303.

[2, 3] Appellant further contends that respondent was liable owing to the following facts: Uipon delivery to him of the deed to the real estate, respondent gave his grantor certain- checks- in payment therefor. The deed was delivered and these cheeks given on the same day that respondent made -his disclosure denying indebtedness to. the main defendant and but -a day or two before such disclosure was served on appellant. After the giving of these checks — the exact time not appearing — respondent discovered that he had overpaid- his grantor -and stopped payment -on one of the checks. Several days after service of respondent’s disclosure, he gave to his grantor another -check for the balance of the purchase price. Appellant -contends that, prior to >and at the time of the disclosure, there existed an indebtedness for the -amount of this check. In this -appellant is clearly in -error. The delivery of a check in payment of -property leaves no liability subject to- be reached by garnishee process. As stated in Morse on Banks and Banking. (3d Ed.) § 543:

“A c'heck is always so far payment until- dishonored, that, after its delivery, the drawer cannot be garnisheed as debtor of the payee in respect to ¡the debt for which the check is given.”

See, also, Larsen v. Allan Line Steamship Co., 45 Wash. 406, 88 Pac. 753, 9 L. R. A. (N. S.) 1258, 122 Am. St. Rep. 926; National Park Bk. v. Levy Bros. & Co., 17 R. I. 746, 24 Atl. 777, 19 L. R. A. 475; 12 R. C. L. 835. It is unnecessary for us to determine whether, after payment of the erroneous check had been stopped, there arose, from the act of -stopping such payment, a liability from respondent to his grantor that would be subject to garnishment, because there was no evidence to- show when such payment was stopped. Instead of there being -a liability f-r-om respondent to his grantor subject to garnishment, there was, in fact, up to the time when payment of the check was stopped, a liability from such grantor to respondent for the amount of the overpayment.

The judgment and order appealed from- are affirmed.