Chambers v. Blickle Ford Sales, Inc.

• Decision Date: 23 January 1963
• Docket Number: Docket 27773.,No. 173,173
• Citation: 313 F.2d 252
• Parties: Gordon P. CHAMBERS, Receiver of Bradford Motors, Inc., Plaintiff-Appellant, v. BLICKLE FORD SALES, INC. and Blickle Lincoln-Mercury, Inc., Defendants-Appellees, Charles R. Blickle and Jeanette Blickle, Garnishees-Appellees.
• Court: U.S. Court of Appeals — Second Circuit

313 F.2d 252 (1963)

Gordon P. CHAMBERS, Receiver of Bradford Motors, Inc., Plaintiff-Appellant, v. BLICKLE FORD SALES, INC. and Blickle Lincoln-Mercury, Inc., Defendants-Appellees Charles R. Blickle and Jeanette Blickle, Garnishees-Appellees.

No. 173, Docket 27773.

United States Court of Appeals Second Circuit.

Argued December 12, 1962.

Decided January 23, 1963.

COPYRIGHT MATERIAL OMITTED

John D. Fassett, New Haven, Conn. (Wiggin & Dana, New Haven, Conn., on the brief), for plaintiff-appellant.

Donald F. Keefe, New Haven, Conn. (Richard G. Bell, and Gumbart, Corbin, Tyler & Cooper, New Haven, Conn., on the brief), for garnishees-appellees.

Before WATERMAN, SMITH and HAYS, Circuit Judges.

J. JOSEPH SMITH, Circuit Judge.

This is an appeal from a judgment and order of the District Court for the District of Connecticut, T. Emmet Clarie, District Judge. The judgment was entered in favor of two garnishees in a proceeding supplemental to judgment for plaintiff in an action for damages against two New York corporations. The order denied an application for receiver of the corporations and accounting by an officer of the corporations to the receiver. The appeal is properly before us as an appeal from final orders under 28 U.S.C. § 1291.

Plaintiff was appointed receiver of Bradford Motors, Inc., a Connecticut corporation, by the Superior Court for New Haven County in 1958. The appraisers of the assets of the corporation listed as one item an account receivable of $23,200 from Blickle Ford Sales, Inc. and Blickle Lincoln-Mercury, Inc., both New York corporations. This action was brought, based on diversity of citizenship, to recover this amount and for an accounting for such other amounts as may be due. Service was made on Charles Blickle in Connecticut, as president and director of both corporations. At the same time, writs of attachment and garnishment were served on Blickle and his wife Jeanette, pursuant to Rule 64 of the F.R.C.P. which provides: "At the commencement of and during the course of an action, all remedies providing for seizure of person or property for the purpose of securing satisfaction of the judgment ultimately to be entered in the action are available under the circumstances and in the manner provided by the law of the state in which the district court is held, existing at the time the remedy is sought * * *" subject to certain qualifications not claimed to be relevant here. Section 52-329 Conn. Gen.Stat. of 1958 provides for attachment of assets in the hands of an "agent or trustee" and attachment of debts that are due the defendant. Section 52-381 makes these debts and assets "liable for the payment" of a judgment that may be secured and provides for the issuance of a scire facias "to be served upon such garnishee, requiring him to appear before such court and show cause" why he should not pay the debt asserted to be due from him to the judgment debtor at the time of service of the writ. Judgment may be rendered against the garnishee for the amount of the debt.

Judgment against the defendant corporations was entered in the amount of $18,250 and plaintiff now seeks to enforce this judgment by levying upon debts asserted to be due and attachable under Connecticut statutes from the Blickles to the defendant corporations. The plaintiff moved for hearing under Rule 69(a) which was granted, and the plaintiff was allowed to examine Blickle to ascertain the state of accounts between the Blickles and the corporations. Blickle had been the owner of the stock in the Connecticut and both New York corporations, and had caused the sale of the business of the New York corporations and the disposition of their assets, leaving their debt to the Connecticut corporation unpaid. After such hearing, in the District Court for the District of Connecticut, T. Emmet Clarie, J., it was found that on the date that the garnishees were served with process they were not indebted to the corporations, and possessed no property belonging to them. Judgment was entered in favor of the garnishees, Charles and Jeanette Blickle, from which plaintiff appeals. Subsequent to this, plaintiff moved for an order appointing a receiver for the two defendant corporations and requiring Blickle to account to the receiver for the assets of the corporations. This motion was also denied, and plaintiff appeals from the order of denial. We find no error in the decision and order and we affirm.

Plaintiff first contends that error was committed in the finding that garnishees possessed no property of and owed no debts to the judgment debtors as the burden of proof was improperly assigned. Plaintiff contends that the burden of proof is upon the garnishees to show the absence of attachable assets in their hands. The question is to be decided under Connecticut law, specifically made applicable by both Rules 64 and 69(a) F.R.C.P. Looking first at the general principles applicable in a Connecticut action of this type, it appears that the burden of proof was properly placed and the finding correct. Under Connecticut practice, a separate action would be required in the nature of a scire facias against the alleged debtor or trustee of the judgment debtor, requiring a hearing and judgment separate from the original action. (The procedure followed here, more in the nature of one supplementary to enforcement of a judgment, accords with the spirit of the Rules and seems to be a sufficiently close adherence to state procedures.) In Connecticut, whatever may have been the earliest practices (see Fowler v. Spelman, 1 Root 353 (1792) (scire facias said to be in the nature of a suit in chancery)) it is clear today from statute and decisions that the scire facias proceeding is considered to be an action at law. Smyth v. Ripley, 33 Conn. 306 (1866); White v. Washington School District, 45 Conn. 59 (1877); Savings Bank of Danbury v. Downs, 74 Conn. 87, 49 A. 913 (1901). And it is true in Connecticut, as everywhere, that in a civil action, the general burden of proof is on the plaintiff. Silva v. City of Hartford, 141 Conn. 126, 104 A.2d 210 (1954); Daly Bros., Inc. v. Spallone, 114 Conn. 236, 158 A. 237 (1932). Further, plaintiff asserts the affirmative, and it is a standard principle in Connecticut as elsewhere that the burden of proof will be with the party asserting the truth of a proposition. "The general and elementary rule is that, as between two such parties, the burden of proof rests upon him who asserts the existence of facts, and not upon him who denies their existence. The former, and not the latter, must finally satisfy the trier of the truth of the facts asserted." Fishel v. Motta, 76 Conn. 197, 56 A. 558 (1903). Finally, plain statements in several scire facias cases make it clear that the burden is with the plaintiff. "The fact to be proved by the plaintiff in this action is that there was a debt due from this defendant to Mayo the judgment debtor on some one of the dates when the attachment was made, which debt was, by such attachment, secured to pay the judgment against Mayo." (Emphasis added.) Cunningham Lumber Co. v. New York, N. H. & H. R. R., 77 Conn. 628, 60 A. 107 (1905). "Now one of the facts set out in this proceeding is that the defendant, at the time the original process was served, was indebted to * * * the defendant in the original action. This fact the plaintiff must prove * *" Smyth v. Ripley, 33 Conn. 360 (1866). Plaintiff was also required to prove the elements of his action, either a debt due his judgment debtor or property of the judgment debtor in the hands of the garnishee, in the following cases: Kelley v. Torrington, 81 Conn. 615, 71 A. 939 (1909); Seigel v. Heimovitch, 128 Conn. 543, 24 A.2d 481 (1942); Witter v. Latham, 12 Conn. 392 (1837). Of the cases cited by plaintiff, Bacon Academy v. DeWolf, 26 Conn. 602 (1858) is not relevant; Hawes v. Mooney, 39 Conn. 37 (1872) gives judgment for the plaintiff but does not discuss the issues; Ciezynski v. New Britain Transp. Co., 121 Conn. 36, 182 A. 661 (1936) purports to place the burden on one issue, akin to an affirmative defense, on the defendant — who had alleged it — but even this is dictum as it was held that plaintiff could not prevail even if the defense failed.

It is clear that this rule places a heavy burden on a plaintiff when he has to untangle transactions between related or closely-interwoven parties. But the alternative would be, where the basic liability is contested, to shift the burden of proof to the purported debtor simply because the debt is sought to be collected in a garnishment action. In an ordinary action against him, he would not have to sustain the burden and no reason appears why he should here. The Connecticut courts have faced tangled webs like this one and have adhered to the general rule. See Seigel v. Heimovitch, supra. It may be that plaintiff can shift the burden of going forward by introducing some evidence, but that is normally true, and here defendant did introduce evidence explaining the contested transactions. Finally, plaintiff is not helped by the "show cause" language in the statute. "As ordinarily used, an order to show cause has simply the effect of a notice of motion. * * * The burden of proof thereon rests upon the plaintiff." Matter of Gilhuly's Petition, 124 Conn. 271, 199 A. 436 (1938). The show cause order does not shift the burden of proof but is merely a method of summary procedure, like a summons. Ibid.

Plaintiff also argues that even if the burden of proof was his, that it was sustained. On a review of the record as well as the fragmentary references in the appendices of both briefs, we cannot say that the determination below was "clearly erroneous." It appears that the corporations steadily lost money. While there is no clear picture in the record of their dealings with the C. I. T. finance company to which they owed large obligations, it has not been shown on the record that the payment of these obligations was...