Cold Metal Process Co. v. McLouth Steel Corporation
| Decision Date | 04 March 1942 |
| Docket Number | No. 8782.,8782. |
| Citation | 126 F.2d 185 |
| Parties | COLD METAL PROCESS CO. v. McLOUTH STEEL CORPORATION et al. |
| Court | U.S. Court of Appeals — Sixth Circuit |
A. Hilliard Williams, of Detroit, Mich. (Butzel, Eaman, Long, Gust & Bills, of Detroit, Mich., Manchester, Ford, Bennett & Powers, of Youngstown, Ohio, and Charles A. Wagner and A. Hilliard Williams, both of Detroit, Mich., on the brief), for appellant.
T. Donald Wade, of Detroit, Mich. (William B. Cudlip, T. Donald Wade, J. Windsor Davis, Peter Pocock, and Bulkley, Ledyard, Dickinson & Wright, all of Detroit, Mich., on the brief), for McLough Steel Corporation, principal defendant-appellee.
Before HICKS, HAMILTON, and MARTIN, Circuit Judges.
Appellant appeals from an order quashing a writ of garnishment and dismissing the appellees, National Bank of Detroit, Manufacturers National Bank and the Detroit Bank, as garnishees.
On February 14, 1940, appellant instituted this action against appellee, McLouth Steel Corporation, to recover $50,000 in royalties allegedly due under a license contract for the use of two rolling mills, and also for interest and cost. In a bill of particulars filed with its petition appellant set forth that there was due it under the contract for the month of June 1929, royalties in the amount of $4,056.95; for the months of July and December inclusive of the same year, approximately $45,000, the exact amount of which was unknown to it, but was known to appellee.
On April 15, 1940, appellee, McLouth Steel Corporation, filed its answer, denying the allegations of appellant's petition and also filed a counterclaim for damages in the amount of $115,000. Appellant answered the counterclaim May 17, 1940.
On July 2, 1940, appellant filed the affidavit of its secretary for a writ of garnishment, which had been verified June 15, 1940, in which it was alleged that the original action was personal, arising upon an express or implied contract and that appellee, the McLouth Steel Corporation, was justly indebted to appellant upon said contract in the sum of $105,000, over and above all legal set-offs, and that all of said sum was then due and unpaid and that appellant was entitled to recover in said action said sum against appellee. Affiant further stated that the appellant was justly apprehensive of the loss of the sum due, unless a writ of garnishment issued to the appellee Banks. Affiant further stated that appellant's claim was not based on work or labor performed for appellee, McLouth Steel Corporation.
The court, pursuant to appellant's motion supported by said affidavit, issued its writ of garnishment to the appellee Banks. Appellee, National Bank of Detroit, answered and disclosed it was indebted to the McLouth Steel Corporation in the sum of $90,118.74 and The Detroit Bank answered and disclosed that it was indebted in the sum of $98,669.05.
On July 10, 1940, appellee, McLouth Steel Corporation, filed motion to quash the writ of garnishment and as grounds therefor stated that the court lacked jurisdiction to issue the writ because (a) the affidavit in support thereof was made June 15, 1940, sixteen days before the issuance of the writ and (b) that the appellee was financially solvent and had within the jurisdiction of the court property subject to its debts many times in excess of appellant's claim and those of its other creditors, (c) that appellant's petition and bill of particulars showed that its claim against appellee, McLouth Steel Corporation, was unliquidated, speculative, uncertain and could not be measured by any standard found in the contract upon which appellant relied for recovery, (d) that the affiant making the affidavit upon which the writ issued knew no fact and stated none which would show that appellant could be justly apprehensive of the loss of any sum, unless the writ of garnishment sought was allowed.
Appellee filed, in support of its motion to quash, a financial statement showing balance sheet and profit and loss summary of its assets and profits as of December 31, 1939, which showed current assets greatly in excess of appellant's claims and those of its other creditors.
The court sustained appellees' motion and quashed the writ of garnishment and discharged the garnishees, from which order this appeal is prosecuted.
Rule 64 of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, makes available to litigants the remedy of garnishment as provided by the law of the state in which the District Court is held. Section 14857 of the Compiled Laws of Michigan for 1929, Michigan Annotated Statutes, Section 27.1855, provides that in all personal actions arising upon a contract, writs of garnishment may issue, if the plaintiff, his agent or attorney shall file with the Clerk of the Court an affidavit stating "he has good reason to believe, and does believe, that any person (naming him) has property, money, goods, chattels, credits or effects in his hands or under his custody or control, belonging to the defendant * * * and that the principal defendant (naming him or them) is justly indebted to the plaintiff on such contract * * * in a given amount, over and above all legal set-offs, and that the plaintiff or affiant is justly apprehensive of the loss of the same unless a writ of garnishment issue to the aforesaid person, a writ of garnishment shall be issued."
Appellant urges that the affidavit on which the present writ of garnishment was issued strictly complied with the above statute and that the truthfulness of the facts stated in the affidavit cannot be controverted on a motion to dismiss or quash. It also insists that Section 14900 of Michigan Compiled Laws for 1929 provides the only remedy for the discontinuance of garnishment proceedings. This statute provides in part that the principal defendant in a garnishment action may have the proceedings discontinued at any time after the service of the writ and previous to the rendering of judgment thereon if he files with the Clerk of the Court his bond with at least two sufficient sureties to the plaintiff as obligees in a penal sum equal to double the amount of the claim of the plaintiff as sworn to in the affidavit filed for the writ of garnishment.
The sole question for decision is, did the Court have...
To continue reading
Request your trial
-
Kaiser Industries Corporation v. McLouth Steel Corp.
...could have been affirmed if other evidence, whether relied upon or not, had supported that conclusion. Cold Metal Process Co. v. McLouth Steel Corporation, 126 F.2d 185 (6th Cir. 1942). Other evidence, however, leaves that conclusion considerably in doubt. On the other hand, if the disclosu......
-
Dann v. Studebaker-Packard Corporation, 13940.
...881, 80 S.Ct. 152, 4 L.Ed.2d 118; Sherman v. Air Reduction Sales Co., 6 Cir., 1958, 251 F.2d 543, 546; Cold Metal Process Co. v. McLouth Steel Corp., 6 Cir., 1942, 126 F.2d 185, 189; Paine & Williams Co. v. Baldwin Rubber Co., 6 Cir., 1940, 113 F.2d 840, 844; American Eagle Fire Ins. Co. v.......
-
Rintala v. Shoemaker
...or by reference to the rules and policies which the Minnesota Supreme Court has sought to apply. Cold Metal Process Co. v. McLouth Steel Corp., 126 F.2d 185 (6th Cir. 1942). Garnishment is "essentially a statutory remedy." Gustafson v. Johnson, 235 Minn. 358, 373, 51 N.W.2d 108, 116 (1952).......
-
Reliford v. Eastern Coal Corporation
...686, 60 S.Ct. 809, 84 L.Ed. 1029; Paine & Williams Co. v. Baldwin Rubber Co., 6 Cir., 113 F.2d 840, 844; Cold Metal Process Co. v. McLouth Steel Corp., 6 Cir., 126 F.2d 185, 189. In the present case the appellee was the defendant in the trial court and is seeking to affirm the judgment of t......