NICK HOLLIDAY, RALPH HOLLIDAY and SOUTHWEST LUMBER MILLS, INC., a Corporation, Appellants,
C. F. SALLING, Appellee
APPEAL from a judgment of the Superior Court of the County of Navajo. John P. Clark, Judge. Judgment modified and affirmed.
Mr. W. Dean Nutting, Attorney for Appellants.
Mr. Guy Axline and Mr. W. E. Ferguson, Attorneys for Appellee.
[54 Ariz. 497] ROSS, C.J.
The plaintiff C. F. Salling, in a proceeding before the Industrial Commission was, on February 12, 1938, awarded compensation under the workmen's compensation law Revised Code of 1928, section 1391 et seq. in the sum of $1,562.99 against his employer, defendant Nick Holliday. An abstract of this award was thereafter, on March 18, 1938, filed in the office of the clerk of the superior court of Navajo county and entered in the judgment docket thereof. April 14, 1938, Salling applied to the clerk of said court for a writ of garnishment after judgment and asked that Ralph Holliday and the Southwest Lumber [54 Ariz. 498] Mills, Inc., hereafter referred to as the lumber company, be served with writs of garnishment. Such writs were served on the lumber company April 16, 1938, and about that date on Ralph Holliday. Both garnishees filed answers to the writs, under oath, denying that they owed Nick Holliday, defendant, anything or had in their possession any effects of his. These answers of the garnishees were duly controverted and issues thereon tendered by the plaintiff in a complaint giving the reasons why he claimed the garnishees' answers were incorrect. These reasons were:
That Nick Holliday was indebted to plaintiff as stated; that to avoid paying such debt he collusively and fraudulently transferred all of his property, on or about January 15, 1938, to Ralph Holliday, who accepted such transfer to assist Nick in his fraudulent purpose to defeat, hinder and defraud plaintiff; that for the same purpose he assigned, or pretended to assign, to Ralph Holliday a certain contract in writing with the lumber company and the benefits of such contract, and that under such circumstances Ralph Holliday holds all such property as a secret trust for Nick Holliday. It is alleged that the lumber company had in its possession certain effects and moneys belonging to Nick Holliday on account of a lumber production contract between them, and that Nick, with the consent and approval of the lumber company, had made a feigned assignment of such account to Ralph, and that it was so made to hinder, delay and defraud plaintiff.
The defendant and the garnishees by various pleadings and motions challenged the right to have a writ of garnishment issue on the award-judgment.
The answer of the lumber company to the tender of issues consisted of denials and affirmative allegations, the latter being that on January 15, 1938, it was [54 Ariz. 499] served with notice that Nick Holliday and his wife had sold and assigned to Ralph all indebtedness due from it, or to become due, up to $9,000 for work, labor and services furnished by them under a certain logging contract, and that the lumber company should pay the said Ralph, or his assigns, such sum; that at the same time the garnishee lumber company was served with notice that Nick Holliday and his wife had assigned, for a consideration of $10,000, to Ralph a certain contract or contracts between them and the garnishee dated July 13, 1936, and December 31, 1936, and that it had recognized such substitution.
The Hollidays adopted the lumber company's answer as to the assignments and alleged that such assignments were bona fide and made to satisfy an indebtedness existing between Nick Holliday and Ralph Holliday in a sum in excess of $10,000.
The case was tried to the court and resulted in a judgment against the garnishees and also against Nick Holliday and Ralph Holliday as debtors for the sum of $1,562.99 and interest at 6 per cent. from date of judgment. From the judgment the defendant and the garnishees have appealed.
The first and principal assignment is directed at the court's ruling holding that the award judgment was a judgment upon which a garnishment could issue. Section 4258, Revised Code of 1928, provides for the issuance of garnishment process in three cases as follows:
"§ 4258. In what cases writ issuable. The clerk of the court or justice of the peace shall issue the writ of garnishment, returnable to their respective court, in the following cases: 1. where an original attachment has been issued as hereinbefore provided; 2. where the plaintiff sues for a debt and makes affidavit that such debt is just, due and unpaid, and that defendant has not within his knowledge, property in [54 Ariz. 500] his possession, ...