Garnishment. Harmony Unlimited, Inc, obtained a judgment against John Chivetta and his company, JMC Enterprises. At the time of the judgment, John lacked sufficient funds to pay. Just before Harmony obtained the judgment, John had transferred $126,000

to his mother, Nettie, who had signed a promissory note. The note for $126,000 was payable on demand, carried no interest, and contained a provision that barred John from obtaining a money judgment against his mother. Nettie paid some of John's bills after the transfer of money from her son to her. Harmony served a garnishment summons on Nettie, claiming that she was a party to a fraudulent scheme by her son to conceal his assets and was holding funds that belonged to her son. Nettie argued that Harmony's rights against her could not be any greater than John's rights against her and that because John could not obtain a judgment against her for the money, Harmony could not do so either. Discuss Harmony's right of garnishment against Nettie.

Garnishment
The conveyance from John to his mother appears to have been fraudulent, but fraud is very difficult to prove. There are, however, a number of elements that tend to prove fraud, and some of those elements are present in this case. First, the transaction occurred between close relatives. Second, John lacked the funds to pay Harmony's judgment and depended on his mother for funds to run his business and even to feed himself. Third, John appears to have stripped himself of his assets to create insolvency. And finally, Nettie was unable to explain the suspicious circumstances of the transfer. These four elements together create a strong presumption that the conveyance was fraudulent. The presence of fraud necessarily creates an exception to the general rule that a creditor can stand in no better position to the garnishee than the debtor himself or herself. Therefore, Nettie is holding funds that belong to her son, and Harmony's garnishment action against Nettie is proper and should be successful.