(52 Or. 318)

2. SAME PROPERTY SUBJECT TO GARNISHMENT "PROPERTY."

Under B. & C. Comp. § 300, providing that all "property" of defendant not exempt from execution shall be liable to attachment, the balance a firm has to its credit in a bank is liable to seizure under an attachment in an action against the firm, the word "property" including money and credits.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 24, Garnishment, §§ 110, 111.

For other definitions, see Words and Phrases, vol. 6, pp. 5693-5728; vol. 8, pp. 7768-7770.] 3. SAME NATURE OF PROCEEDING.

A proceeding against a garnishee on an attachment or execution issued in an action at law is strictly at law, and pleadings are framed and the issues of fact arising thereon are tried as in ordinary actions at law.

4. APPEAL-RULING ON MOTION FOR NONSUIT-REVIEW.

The grounds stated in a motion for a nonsuit are conclusive on the moving party, and he cannot raise for the first time on appeal a ground not stated in the trial court.

5. GARNISHMENT-EFFECT-RIGHTS OF ACTION.

A creditor of a firm who, in an action against the firm, attaches money and credits belonging to the firm in possession of another, succeeds to the rights of the firm against the latter.

6. PARTNERSHIP-DISPOSITION OF FIRM PROPERTY- - RIGHTS OF CREDITORS RIGHTS OF PARTNERS.

Simple contract creditors of a firm have no lien in their own right on firm assets which will prevent the partners from in good faith applying the same to the payment of the individual debts of the partners, but the partners have a lien on the property for the payment of partnership debts, and one partner cannot appropriate the property to the payment of his individual debts without the consent of the copartners, and such a payment without such consent is a misapplication of the assets of the firm, and a fraud on the rights of the copartners.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 38, 'Partnership, §§ 314, 316.]

95 P.-1

7. SAME.

A bank received deposits from a firm. It charged against the firm account the notes of partners, though it knew that the notes were the individual obligations of the partners. Held, that the act of the bank was prima facie invalid as against the partnership and its creditors, and the burden of proof was on it to show that it made such charge with the assent, express or implied, of all the partners.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 38, Partnership, § 316.] 8. SAME.

Evidence held not to show that a bank applied firm deposits to the individual obligations of partners with the assent, express or implied, of all the partners essential to make the transaction valid as against the firm and its creditors. [Ed. Note. For cases in point, see Cent. Dig. vol. 38, Partnership, § 316.]

Appeal from Circuit Court, Malheur County; George E. Davis, Judge.

Action by the Caldwell Banking & Trust Company against F. L. Porter and others, copartners under the firm name of Porter, Jones & Test, in which the First National Bank of Ontario was summoned as garnishee. From a judgment for plaintiff, the garnishee appeals. Affirmed.

On September 29, 1906, F. L. Porter, Thomas Jones, and E. H. Test, partners in the sheep business in Malheur county, sold their sheep for $22,594.50, and deposited the money in the First National Bank of Ontario to the credit of the firm, which, together with a previous balance of $458.26, made an aggregate credit of $23,032.76. At that time the partnership was indebted to the bank in the sum of $13,656.04, and it held the individual notes of each member of the firm, which were overdue and of about equal amounts, approximating-principal and interest-$7,008.85, which the bank charged to the firm account. This left a balance of $2,035.02 to the credit of the firm. On October 3d plaintiff, Caldwell Banking & Trust Company, commenced an action at law against Porter, Jones & Test to recover on two promissory notes, amounting in the aggregate to $7,500 and accumulated interest, and caused a writ of attachment to be issued and served upon the bank, attaching any and all money or credits in its possession belonging to the partnership. The bank answered that its books showed a balance to the credit of the

firm of only $2,035.02. This being unsatisfactory to plaintiff, it obtained an order requiring the bank to appear and answer on oath concerning the same. Written allegations and interrogatories were subsequently served and filed, in which, after alleging the incorporation of plaintiff and garnishee bank, the partnership of Porter, Jones & Test, the commencement of the action by plaintiff against the partnership, the issuance and service of the writ of attachment therein, the return of the garnishee bank, the deposit by Porter, Jones & Test of $22,594.50 with the garnishee bank on September 29, it is averred that after such deposit, and prior to the service of the writ of attachment on the garnishee bank, it had paid out on order of the partnership the sum of $14,008.89, and and no more, and that at the date of such service there was due and owing from such bank to the partnership the sum of $9,043.87. On the day the garnishee bank was requested to appear and answer it filed a motion to dismiss the proceeding for want of an appearance by plaintiff, but before such motion was disposed of it answered the allegations, denying the material averments thereof, and affirmatively set out the several notes due it from the partnership of Porter, Jones & Test, and from the individual members of such partnership, and averred that all such notes were given by the parties thereto and accepted by the bank, and the time of payment thereof extended from time to time, and particularly the notes of the individual members of the firm, upon the express agreement and understanding with the makers, individually and collectively, that the sheep and other partnership property of Porter, Jones & Test would be sold and the money received therefor deposited in the garnishee bank to be applied by the bank in payment thereof; that in accordance with such understanding and agreement, Porter, Jones & Test sold the sheep and deposited the proceeds of the sale with the garnishee bank, whereupon the bank duly applied such portion thereof as was necessary to the payment and discharge of all such notes, partnership and individual; that prior to the commencement of the action by plaintiff against Porter, Jones & Test the partnership and the individual members of such firm duly and fully ratified the action of the garnishee bank in applying the proceeds of the sale to the payment of the partnership and individual debts, and received and accepted their notes as paid and discharged in full. A reply put in issue the new matter alleged in the answer, and upon the issues thus joined the cause came on for trial before a jury. The defendant garnishee objected to the admission of any evidence on the ground that plaintiff's remedy is in equity and not at law. This objection was overruled, whereupon plaintiff, to sustain the issues on its part, offered in evidence severally the complaint, summons and proof of service thereof, a demurrer filed by defendants, the

affidavit and undertaking for writ of attachment, the writ of attachment and notice of garnishment, together with the sheriff's return thereon, the answer of the garnishee, and the judgment in the action brought by plaintiff against Porter, Jones & Test. But all these papers were excluded by the court on objection of defendant, on the ground that they were immaterial, irrelevant, and incompetent. The plaintiff then called Mr. Test, one of the members of the firm of Porter, Jones & Test, who identified the two notes upon which the action was brought by plaintiff; but the court, on objection of defendant, refused to admit either of such notes in evidence, on the ground that they were immaterial, irrelevant, and incompetent, and also refused, for a like reason, to permit Test to testify that at the time of the commencement of such action there was due and owing thereon from the partnership of Porter, Jones and Test to the plaintiff the principal and interest of each of such notes. Plaintiff then proved by Test that the partnership of Porter, Jones & Test had on deposit with the garnishee bank on September 29th $23,052.76, and that between that date and the service of the garnishee process upon it there had been paid out by the bank on account of the partnership, and by its authority, $14,008.89, and no more, and then rested. Whereupon the defendant garnishee moved the court for a nonsuit, on the grounds (1) that plaintiff's remedy was in equity, and not at law; (2) that plaintiff had not proved a partnership of Porter, Jones & Test under the firm name of Porter, Jones & Test, but had shown the partnership to be Porter, Test & Jones. This motion was overruled, and defendant garnishee gave evidence which it claims tended to support its defense to the garnishee proceedings, but at the close of the testimony the court, on motion of plaintiff, directed a verdict in favor of plaintiff, from which defendant garnishee appeals.

W. F. Butcher and A. N. Soliss, for appellant. John C. Rice and W. H. Brooke, for respondent.

BEAN, C. J. (after stating the facts as above). The defendant's motion to dismiss the proceeding and discharge the garnishee from liability because of the failure of plaintiff to appear at the time and place mentioned in the order requiring the garnishee to appear and be examined on oath concerning the matters stated in its answer to the garnishee process was waived by defendant. It subsequently answered, and proceeded to trial without objection, and without asking or requesting a ruling on the motion. Nor is there any merit in the objection made at the opening of the case to the admission of any testimony because plaintiff's remedy is in equity and not at law. All the property of a defendant not exempt from execution is liable to attachment (section 300, B. & C. Comp.), and this includes