Ross v. Peck Iron & Metal Company

• Decision Date: 09 March 1959
• Docket Number: No. 7762.,7762.
• Citation: 264 F.2d 262
• Parties: Percy ROSS and Laurian Ross, individually and as co-partners doing business as Ross & Ross, Ross & Ross, auctioneers, Inc., a corporation, and John H. Anderson, individually and as Trustee for Ross & Ross, Appellants, v. PECK IRON & METAL COMPANY, Inc., a corporation, Julius Peck and American National Bank of Portsmouth, Virginia, Appellees.
• Court: U.S. Court of Appeals — Fourth Circuit

264 F.2d 262 (1959)

Percy ROSS and Laurian Ross, individually and as co-partners doing business as Ross & Ross, Ross & Ross, auctioneers, Inc., a corporation, and John H. Anderson, individually and as Trustee for Ross & Ross, Appellants, v. PECK IRON & METAL COMPANY, Inc., a corporation, Julius Peck and American National Bank of Portsmouth, Virginia, Appellees.

No. 7762.

United States Court of Appeals Fourth Circuit.

Argued January 15, 1959.

Decided March 9, 1959.

COPYRIGHT MATERIAL OMITTED

Theodor Herman, Minneapolis, Minn. (Sidney Kelsey, Norfolk, Va., on brief), for appellants.

Herbert K. Bangel, Portsmouth, Va. (Bangel, Bangel & Bangel, Portsmouth, Va., on brief), for appellees Peck Iron & Metal Co., Inc., and Julius Peck.

Clyde W. Cooper, Portsmouth, Va., for appellee American Nat. Bank of Portsmouth, Virginia.

Before SOPER, Circuit Judge, and PAUL and BOREMAN, District Judges.

BOREMAN, District Judge.

This is an appeal from an order of the District Court granting defendants' motion for summary judgment.

Ross & Ross, individually and as partners and operating in a corporate name, are engaged in the business of auctioneering; they will be referred to as "Ross". On May 15, 1954, Peck Iron & Metal Company, Inc., one of the defendants below and hereinafter referred to as "Peck", filed its petition for attachment in the Circuit Court of the City of Portsmouth, Virginia, against Ross, as principal defendant, and several others as co-defendants. The grounds for the attachment, as set forth in the petition, were that Ross was a non-resident of the State of Virginia, and that Ross had estate or debts owing to it within the City of Portsmouth, Virginia. The petition for attachment alleged that Ross was indebted to Peck in the amount of $45,000 for certain merchandise sold by Ross and belonging to Peck; that Ross failed and refused to pay Peck the amount due; that the merchandise had been wrongfully sold and that Ross had received the money for it; and that Ross had sold the merchandise contrary to the wishes and instructions of Peck.

The writ of attachment was served in person upon Ross and the co-defendants. In its answer, Ross denied all the allegations of the petition although it is conceded that Ross was a non-resident and had estate or debts owing to it in the City of Portsmouth.

The American National Bank of Portsmouth, hereinafter referred to as the "Bank", as one of the co-defendants in the attachment proceeding, filed its answer stating that it held on deposit, in an account carried in the name of John H. Anderson (Trust Account), the amount $21,836.74; that on May 14, 1954, the Bank had issued, for cash, two cashier's checks payable to Ross in the sums of $5,000 and $3,185, which cashier's checks had not been presented for payment as of May 25, 1954, the date of the Bank's answer. The other co-defendants answered stating that they were neither indebted to nor had any property belonging to Ross.

On June 3, 1954, Ross appeared in the Circuit Court of the City of Portsmouth and orally moved to quash the attachment, which motion was overruled. Subsequently, on motion of all parties, the action was transferred to the equity side of the court and referred to a Commissioner in Chancery. After several hearings, the Commissioner, on September 15, 1955, filed a report stating that Ross was indebted to Peck in the sum of $44,325.89. Exceptions to this report having been filed by Ross, on October 22, 1956, the said Circuit Court entered an order sustaining in part and overruling in part the exceptions. In this latter order, after reciting the various pleadings and proceedings, including the action of the Court in overruling the motion of Ross to quash the attachment, the Court found and determined that Peck had failed to carry the burden of proof as to the allegations that Ross either failed or refused to make any payment due Peck, or wrongfully sold merchandise belonging to Peck, or sold any articles contrary to the terms of the contract, or refused to accept any bids at auction. However, that Court further found that Ross was indebted to Peck in the amount of $23,859.14 and granted judgment for that amount, ordering that the funds previously attached on deposit in the Bank, to the credit of John H. Anderson Trust Account, or such moneys belonging to Ross in the hands of the Bank, be applied to the payment of the judgment. No appeal having been taken from the decree of the state court within the time allowed, said decree has long since become final.

Following the issuance of the attachment, the two cashier's checks, referred to in the Bank's answer in the attachment proceeding, were negotiated by Ross, the payee of the checks, to Fischbein Advertising Agency. When the checks were presented for payment on June 9, 1954, payment was refused and the words "Payment stopped" were written thereon by the Bank. Fischbein, a foreign corporation, later instituted an action against the Bank in the United States District Court for the Eastern District of Virginia, claiming to be a holder of said cashier's checks in due course and, as such, claiming a lawful priority over the attachment levy. Following a pre-trial conference in this latter action, the Bank paid to Fischbein the amount of the cashier's checks with interest and the case was dismissed with prejudice to the plaintiff on June 30, 1957.

In this setting, the plaintiffs as named herein instituted the present action in the District Court against the named defendants. The complaint undertakes to assert three causes of action in substance and effect as follows:

1. For alleged wrongful and malicious attachment issued without probable cause, together with some suggestion of malicious abuse of process, compensatory damages $50,000.

2. For conspiracy, by and among the defendants, entered into with a malicious intent to injure the plaintiffs in their good name, fame, reputation and credit by means of the alleged wrongful attachment, compensatory damages $25,000, punitive damages $25,000.

3. For the wrongful non-payment of the two Cashier's checks payable to Ross, the defendants acting in concert and with malicious intent to injure the plaintiffs in their good name, fame, reputation and credit, compensatory damages $25,000.

After issue was joined on these causes of action, the District Court granted defendants' motion for summary judgment and plaintiffs in the court below appeal.

It is a fundamental rule that summary judgment should be denied unless there is no genuine issue of fact for trial. Sartor v. Arkansas Natural Gas Corp., 321 U.S. 620, 64 S.Ct. 724, 88 L.Ed. 967; Stevens v. Howard D. Johnson Co., 4 Cir., 1950, 181 F.2d 390. The District Court, after reviewing the record in the attachment proceeding in the state court and the facts as disclosed by the pleadings, found no genuine issue of fact for trial.

The contentions and arguments of Ross as to the first cause of action are many and varied, making consideration and treatment thereof extremely difficult because of overlapping. We endeavor to state them as follows: That the attachment was issued unlawfully and without probable cause; that there was no debt due Peck at the time of the attachment; that the state court found that Peck had failed to carry the burden of proof as to certain material allegations, thus leaving only non-residency of Ross as the sole ground of attachment; that, by statute, non-residency alone would not support attachment where there was no debt due; that Peck did not "prevail" in the state court; that, even if Peck did "prevail" in the attachment proceeding, that fact would not bar this action; that even though the attachment was rightful, it was used in such an oppressive and illegal manner as to constitute an abuse of process; that Peck knew that some of the money in the attached bank account represented proceeds from the auction sale of equipment belonging to third parties; that the attachment suit was brought for the sum of $45,000.00 and judgment obtained for $23,589.14 and this disparity, in itself, was evidence of wrongful use of the extraordinary remedy of attachment.

As to the contention that there was no debt due when the attachment action was instituted, if such had been the case, the court could not have granted the judgment. See 1947, 49 C.J.S., Judgments, § 20. Therefore, such a contention amounts to an attempt to collaterally attack the judgment in the attachment suit. As stated in 1947, 49 C.J.S., Judgments, § 417.

"A judgment cannot be impeached collaterally because of any illegality or insufficiency in the cause of action on which it is founded, this not being a jurisdictional defect or sufficient to render the judgment void. Under this rule it is not permissible to collaterally attack the judgment on the ground that the claim in suit * * * was not yet due at the time the action was brought."

It is implicit in the judgment of the Circuit Court of the City of Portsmouth that there was a debt due at the time of institution of the attachment action. See 1947, 49 C.J.S., Judgments, § 436.

As was held by the District Court, the attachment proceeding was terminated unfavorably to the defendant therein, Ross. Although the court in the attachment proceeding found certain allegations of the plaintiff therein to be unsupported by the evidence, it is not necessary that the plaintiff prove all of his allegations. Under Va.Code, § 8-519 (1950), it is only necessary for the attaching party to have a legal or equitable claim to specific personal property, based upon a debt which is due, as well as one or more of the grounds for an attachment.¹ The grounds for attachment are provided in Va.Code, § 8-520 (1950).²

As a general rule, no cause of action for wrongful and malicious attachment will arise if the plaintiff in the attachment suit prevails. 5 Am.Jur., Attachment and Garnishment, § 988 (1936). Appellants contend that termination of the attachment action...