Arnold v. Knettle

• Decision Date: 28 October 1969
• Docket Number: CA-CIV,No. 1,1
• Parties: Francis ARNOLD and Thelma Arnold, husband and wife, Appellants, v. James KNETTLE and Geraldine Knettle, Appellees. 768.
• Court: Arizona Court of Appeals

Page 45

460 P.2d 45

10 Ariz.App. 509

Francis ARNOLD and Thelma Arnold, husband and wife, Appellants, v. James KNETTLE and Geraldine Knettle, Appellees.

No. 1 CA-CIV 768.

Court of Appeals of Arizona, Division 1.

Oct. 28, 1969.

Alan Philip Bayham and Henry L. Zalut, by Henry L. Zalut, Phoenix, for appellants.

Carmichael, Johnson & Stephens, by N. Pike Johnson, Jr., Phoenix, for appellees.

HOWARD, Judge.

This is an appeal from the court order granting appellees' motion to quash two writs of garnishment.

On February 24, 1967, James Knettle and Geraldine Kettle, husband and wife, executed a promissory note in the amount of $1,700.00 payable to Francis Arnold and Thelma Arnold.

On the reverse side of the note is written the following:

'TO BE PAID IN RETURN FOR BANK NOTE (A) SECURITY BANK MESA IN THE AMOUNT OF 1500 interest AS PART OF PARTNERSHIP AGREEMENT. THIS NOTE SHALL PAY IN FULL ALL PARTNERSHIP AND OTHER ARRANGEMENTS AS OF FEB. 24, 1967.'

The date of the note arrived and passed without payment by the appellees. Demand for payment was made but no payment was forthcoming. Appellants then sued the appellees in the Superior Court on the promissory note and in conjunction therewith had the Clerk of the Court issue to them, after their having posted the bond required by statute, writs of garnishment. The writs were served on the employer of the defendant, James Knettle, Allis-Chalmers Tractor Sales & Service, and upon O. S. Stapley Company, which owed James Knettle money on accounts receivable. After service of the writs of garnishment upon Allis-Chalmers, defendants filed a motion to quash the writ of garnishment. Defendants also moved the court to quash the writ of garnishment on O. S. Stapley. The motion to quash the writ of garnishment on Allis-Chalmers was accompanied by an affidavit of the defendant, James Knettle to the effect that the note sued upon was given in contemplation of the purchase of a business; that the purchase had not taken place; that if there was a purchase, it was voidable due to the misrepresentations of the plaintiffs that the health license issued with respect to the business was in good order; and that the note was given only as security for the payment of the obligation due to First Security Bank of Mesa as shown by the reverse side of the instrument. The motion to quash the writ of garnishment on O. S. Stapley was not accompanied by an affidavit. Plaintiffs' response to the motion to quash the writ of garnishment served on Allis-Chalmers was accompanied by an affidavit by the plaintiffs to the effct that defendants executed and delivered to the plaintiffs a promissory note; that the note was due on March 21, 1967; that no payment had been received; and that the obligation due the First Security Bank of Mesa was in no way to be paid as a condition precedent to the paying of the note sued upon. Plaintiffs' response to the motion to quash the writ of garnishment on O. S. Stapley was not accompanied by any affidavit, but was resisted on the grounds that the note was due and payable.

The trial court granted defendants' motion to quash the writs of garnishment and entered judgment in favor of the garnishee, O. S. Stapley Company, which had filed an answer, and against the plaintiffs in the sum of $10.00 for attorneys fees in answering the writ of garnishment.

The gist of the defendant's argument in the trial court in support of his motion to quash the writ of garnishment was that the note sued upon was not an unconditional promise to pay but was in reality security for the payment of another note. The defendant claims this is clearly shown by the writing on the reverse side of the note. The plaintiffs contended that the statements on the reverse side of the note only referred to the consideration for which the promise to pay arose. The affidavits of plaintiffs and James Knettle were, to say the least, conflicting and the meaning of the reverse side of the note is to this court not as crystal clear as the defendants seem to contend. In any event, the defendants' attack on the writ of garnishment was based upon the lack of merit of the plaintiffs' claim against the defendants in the main action. This is not a basis for quashing a writ of garnishment. Recor v. Commercial & Sav. Bank, 142 Mich. 479, 106 N.W. 82, 5 L.R.A.,N.S., 472 (1905); 6 Am.Jur.2d, Attachment and Garnishment, § 431, at 864. To hold otherwise would force a trial of the merits of the action on the motion, and not only on the motion, but on affidavits. A.R.S. § 12--1571 requires the clerk of the court to issue a writ of garnishment when the plaintiff sues for debt and makes an affidavit that the debt is just, due and unpaid. It does not require that there be a prior judicial determination that the debt is in fact due. If it turns out that there has been a wrongful garnishment then the defendant is protected by the bond that is required by A.R.S. § 12--1572.

We would, therefore, be obliged to reverse, if it were not for the fact that since the filing of the briefs in this case the Supreme Court of the United States, in the case of Sniadach v. Family Finance Corporation of Bay View, 395 U.S. 337, 89 S.Ct. 1820, 23 L.Ed.2d 349 (1969), has held unconstitutional a garnishment statute from the State of Wisconsin which is similar to A.R.S. § 12--1571. The question of the constitutionality of this statute was not brought up in the trial...