Burr v. Heffner

• Decision Date: 05 June 1939
• Docket Number: No. 71.,71.
• Citation: 289 Mich. 91,286 N.W. 169
• Parties: BURR v. HEFFNER et al. (FEDERAL HOUSING ADMINISTRATION, REGION NO. 4, STATE DIRECTOR RAYMOND FOLEY, Garnishee).
• Court: Michigan Supreme Court

289 Mich. 91

286 N.W. 169

BURR

v.HEFFNER et al. (FEDERAL HOUSING ADMINISTRATION, REGION NO. 4, STATE DIRECTOR RAYMOND FOLEY, Garnishee).

No. 71.

Supreme Court of Michigan.

June 5, 1939.

Garnishment proceedings by Ruth Burr, doing business as Secretarial Service Bureau, against one Heffner, whose first name is unknown but whose person is well known, and George Brooks, doing business as Heffner & Brooks, principal defendants, and the Federal Housing Administration, Region No. 4, State Director Raymond Foley, garnishee. From a judgment against the garnishee, principal defendants and garnishee defendant appeal.

Affirmed.

Appeal from Circuit Court, Wayne County; Parm C. Gilbert, Judge.

Argued before the Entire Bench.

John C. Lehr, U. S. Atty., of Detroit, J. Thomas Smith, Asst. U. S. Atty. Gen., Kenneth D. Wilkins, Asst. U. S. Atty., of Detroit,and Maurice W. Hibschman, Sp. Asst. to Atty. Gen., for appellants.

Seaborg & Rice, of Detroit, for appellee.

BUSHNELL, Justice.

This is an appeal from a judgment entered against a garnishee defendant in the sum of $71.11. Leave to appeal was granted because of the importance of the question involved, namely: Is the Federal Housing Administration, a governmental agency, subject to being sued as garnishee defendant through its State Director? Appellant says this cannot be done in the absence of specific statutory consent.

Plaintiff held an unsatisfied judgment against one Heffner and George Brooks, doing business as Heffner and Brooks. This judgment was obtained on November 5, 1930. The writ of garnishment was served on March 5, 1938. On March 7, 1938, an appearance was entered for the garnishee defendant by the United States Attorney for the Eastern District of Michigan. The answer and disclosure filed on March 31, 1938, stated that defendant Brooks was no longer connected with the Federal Housing Administration, he having died on March 8, 1938, and that there was due and owing to him by the garnishee defendant the sum of $71.11. No question is raised in this appeal as to whether or not the entire sum was garnishable, whether or not the money represented wages due Brooks, or the effect of his death.

The Federal Housing Administration was created by congressional enactment. See 12 U.S.C.A. § 1701 et seq. The statute provides that: ‘The Administrator shall, in carrying out the provisions of this title and titles II and III, be authorized, in his official capacity, to sue and be sued in any court of competent jurisdiction, State or Federal.’ Sec. 1702.

In the recent case of Keifer & Keifer v. Reconstruction Finance Corporation, 59 S.Ct. 516, 518, 83 L.Ed.-, decided February 27, 1939, the court called attention to the use of independent corporate facilities for governmental ends and said that: ‘In spawning these corporations during the past two decades, Congress has uniformly included amenability to law. Congress has provided for not less than forty of such corporations discharging governmental functions, and without exception the authority to-sue-and-be-sued was included.’ The footnote appearing at this point in the court's opinion contains a list of those referred to, including the ‘Federal Housing Administrator [August 23, 1935], 49 Stat. 684, 722 [chap. 614], 12 U.S.C.A. § 1702.'

Does the phrase ‘sue-and-be-sued’ include a writ of garnishment?

A writ of garnishment is a civil process at law, Webster v. Bennett, 247 Mich. 616, 226 N.W. 684, in the nature of an equitable attachment, Posselius v. First Nat'l Bank, 264 Mich. 687, 251 N.W. 429, 90 A.L.R. 342. See, also, German American Insurance Company v. Circuit Judge, 105 Mich. 566, 63 N.W. 531. The usual test as to the liability of a garnishee is whether the principal defendant could have maintained an action against the garnishee to recover the property in question. Nessen Lbr. Co. v. Ray H. Bennett Lbr. Co., 223 Mich. 349, 193 N.W. 789. The word ‘sue’ is defined in 2 Bouv. Law Dict., Rawles Third Revision, p. 3176, 8th ed., as meaning ‘to commence or to continue legal proceedings for the recovery of a right.’ See Porto Rico v. Rosaly y Castillo, 227 U.S. 270, 33 S.Ct. 352, 57 L.Ed. 507, 509.

Buchanan v. Alexander, 4 How. 20, 11 L.Ed. 857, holds that money in the hands of a governmental officer cannot be reached by a writ of garnishment, but the question of waiver of immunity is not considered in the Buchanan opinion. Although the question of garnishment was not before the court in Keifer & Keifer v. Reconstruction Finance Corp., 59 S.Ct. 516, 83 L.Ed.-, and waiver of immunity was not expressly stated as to the Regional Agricultural Credit Corporation directly involved and which the Reconstruction Finance Corporation was authorized to create, there seems to remain little doubt from the reasoning of the opinion of the court that, if ‘Congress has embarked upon a generous policy of consent for suits against the government sounding in tort even where there is no element of contract,’ it should follow that, where express consent is given in the Federal act to ‘sue and be sued’ without any limitation upon the permissive language, this provision for suits against the administrator ‘in any court of competent jurisdiction, State or Federal,’ must have contemplated the provisions of the law in the several states, including that of Michigan, where it is settled that a...