Bendix Radio Corp. v. Hoy

• Court: Maryland Supreme Court
• Writing for the Court: Before BRUNE; COLLINS
• Citation: Bendix Radio Corp. v. Hoy, 207 Md. 225, 114 A.2d 45 (Md. 1955)
• Decision Date: 13 May 1955
• Docket Number: No. 147,147
• Parties: BENDIX RADIO CORPORATION, Garnishee for Arthur E. Welch, v. Dr. John A. HOY and Virginia Hoy, his Wife.

Page 225

207 Md. 225

114 A.2d 45

BENDIX RADIO CORPORATION, Garnishee for Arthur E. Welch, v. Dr. John A. HOY and Virginia Hoy, his Wife.

No. 147.

Court of Appeals of Maryland.

May 13, 1955.

James C. L. Anderson and Francis X. O'Dougherty, Towson (Leo G. Horney, Towson, on the brief), for appellant.

Herbert R. O'Conor, Jr., and George W. McManus, Jr., Baltimore (Herbert R. O'Conor, Baltimore, on the brief), for appellees.

Before BRUNE, C. J., and DELAPLAINE, COLLINS, HENDERSON and HAMMOND, JJ.

COLLINS, Judge.

This is an appeal from a judgment in the amount of $4,305.67 rendered in favor of Dr. John A. Hoy and Virginia Hoy, his wife, appellees, and against Bendix Radio Corporation, (Bendix), garnishee of Arthur E. Welch, appellant.

Sometime previous to March 31, 1954, the appellees recovered a judgment in the amount of $5,309.61 against Arthur E. Welch, who was then employed as General Sales Manager of the Television and Broadcast Receiver Division of Bendix as the result of the failure of Mr. Welch to comply with an agreement to purchase a house. On March 31, 1954, an attachment on this judgment was issued and laid in the hands of Bendix, garnishee, on April 1. 1954.

In the attachment case, interrogatories were served on the garnishee, which were answered by Mr. Leo G Horney, the assistant to the General Manager of Bendix Radio Communications Division and as Divisional Attorney for that Division. In answer to the interrogatories, Mr. Horney stated that on the effective date of the attachment, April 1, 1954, Bendix had in its hands the amount of $146.24 due and owing to Welch as wages for two days. After deducting the exemption of $100 there was paid to the Sheriff of Baltimore County, $46.24. Accounting from that date to and including April 6, 1954, when Welch's services were terminated, Bendix had in its hands the amount of $246.24 due as wages, which included the $100 which was previously withheld in accordance with Code 1951, Article 9, Section 33. The answer to the interrogatories also showed that 'since the 2nd day of April, 1954, and in particular on the 6th day of April, 1954, the Garnishee paid to Arthur E. Welch the gross amount of $5,485.15. The amount of $246.24 was due as wages to the said Arthur E. Welch as set forth in the Garnishee's second answer to the interrogatories and included the amount of $100 withheld as aforesaid in accordance with the Code of Maryland, Article 9, Section 33, Flack's Annotated Code. The balance of $4,305.67 was paid by the Garnishee to the said Arthur E. Welch as a gratuity on termination of employment in consideration of his previous employment but was not paid as an obligation and was not paid in accordance with any agreement or established employment benefit.'

In a deposition filed in the case Mr. Horney, when asked whether the figure of $4,305.67 was wages or salary, answered that it was not. When asked how this figure was computed, he answered: 'Yes; as shown by other portions of the interrogatories; Mr. Welch, like other salaried employees, is on a month to month employment contract. Knowing as you do the Maryland law with respect to employment contracts, when employment is terminated without cause, the employee is entitled to the contractual pay for the balance of the pay period; in this case, the balance of the month. Beyond that, the corporation authorizes the respective general managers to make whatever financial arrangements of separation he feels is equitable under the circumstances. In the case of Mr. Welch, his previous employment as Assistant General Manager of the Television Division, and in effect, General Sales Manager, was such that he had worked exceedingly hard; and although his program which he attempted to give effect to was not successful, we, nevertheless, recognized his efforts and past performance. Had he remained here he would have been entitled to two weeks vacation for which he would have been paid while away. All of those things were considered in establishing the amount of money that our general manager agreed to pay Welch. Welch was under great expense while he was with the company. He maintained living quarters here, which he had to pay out of his own pocket. * * * He never did move his wife and child to Baltimore. He commuted almost every weekend to Long Island, which is expensive. And he maintained, of course, expensive facilities in Long Island. All of those things prompted the general manager to decide to make to Mr. Welch the payment which he did.' Mr. Horney, when testifying in chief was asked whether the amount paid Welch was in fact wages and salary not due and owing at that time but which were paid as such by the company, to which he answered: 'That's correct.' He further stated that this payment covered the period from April 5th or 6th through the end of June. He stated on cross-examination that when he said in his deposition that the $4,305.67 was not wages or salary, he made such statement in his 'capacity with the company.' He later stated on cross-examination that this amount was given Welch as a gratuity. He admitted that he did not know until April 6th that Mr. Welch 'was terminated.' The trial judge remarked: 'He [Mr. Horney] is starting to bandy words by saying on April 6th it wasn't wages. He says it was a gratuity.' An undated employee's agreement signed by Welch and offered in evidence indicated that his salary was $1,585 per month.

Mr. Harry Russell, Jr., the payroll supervisor for Bendix, testified from the records of that company, and stated that the payment of the $4,305.67 was shown on the books of the company as salary for the months of April, May and June and the vacation allowance, and that he computed the sum on that basis, Welch receiving a flat salary of $1,585 per month.

Of course, the right of the attaching creditor, Dr. Hoy, to recover against the garnishee, Bendix, depends upon the subsisting rights between the garnishee and the debtor, Welch, in attachment. The test of the garnishee's liability is that he has funds, property or credits in his hands, the property of the debtor, for which the debtor would have the right to sue. The plaintiff can recover from the garnishee only by the same rights and to the same extent as the debtor could recover if he were suing the garnishee. It was said in the late case of Cole v. Randall Park Holding Co., 201 Md. 616, 95 A.2d 273, 277: 'In essence, attachment and garnishment is an action by the defendant against the garnishee for the use of the plaintiff. For this reason, the rights of the plaintiff can never rise above those of the defendant. If the defendant could not sue the garnishee in the courts of the State in which the attachment is filed, the plaintiff cannot do so. 2 Shinn on Attachment and Garnishment, Sec. 516, p. 893; Hodge & McLane, Attachments, Sec. 148; Myer v. Liverpool, London & Globe Ins. Co., 40 Md. 595.' United States Fidelity & Guaranty Co. v. Williams, 148 Md. 289, 129 A. 660; Code 1951, Article 9, Section 29.

In the trial court Bendix contended that the payment of $4,305.67 was not wages but a gratuity paid to Welch. The trial judge understood from the testimony that Bendix formally conceded that the payment was not wages. In this Court Bendix contends that such payment was wages. The trial judge further found as follows: 'Now, the point may be narrow, but it is crystal clear to me that prior, perhaps we will concede, to April 6th, there was no obligation with respect to this $4300 which Welch could enforce against Bendix, but the very day that Mr Foster [the manager of Bendix] said, 'Here is what we will do to you; here is what we will do for you; here is what we agree to do with you.'--immediately an obligation was created, in my judgment, which Welch could have enforced against Bendix. Finding that to be true that it was an obligation enforceable by Welch, then at the time it was created, Dr. Hoy steps in Welch's place and becomes an obligation which he can enforce under this attachment because, it seems to me fantastic to say, 'Well, Bendix agrees to pay Welch a...