Gilloley v. Sampson
| Decision Date | 08 July 1938 |
| Docket Number | 31,623 |
| Citation | 281 N.W. 3,203 Minn. 233 |
| Parties | GEORGE A. GILLOLEY v. JOE SAMPSON; MARTIN SEARS AND OTHERS, GARNISHEES; ERICKSON-JOHNSON CONSTRUCTION COMPANY AND OTHERS, RESPONDENTS |
| Court | Minnesota Supreme Court |
Action on a promissory note in the district court for Rice county by George A. Gilloley as receiver of the Citizens National Bank of Faribault, substituted as appellant for Frank W. Shandorf against Joe Sampson, wherein plaintiff recovered a judgment and Martin Sears and others were garnisheed. There were findings and order for judgment of dismissal with prejudice Fred W. Senn, Judge, in favor of the Erickson-Johnson Construction Company, R.B. Fraser Construction Company Seaboard Surety Company, and Standard Surety & Casualty Company. Plaintiff appealed from an order denying his motion for a new trial. Reversed.
See 198 Minn. 92, 268 N.W. 841; 198 Minn. 96, 268 N.W. 843.
Garnishment -- commencement of action -- service of summons -- effect of supplemental complaint.
1. A garnishment action is begun by the service of summons as of the date thereof, and a supplemental complaint in the garnishment is a continuation of the garnishment so begun and not the commencement of a separate action.
Appeal and error -- question decided on former appeal not res judicata.
2. Our decision in Shandorf v. Standard Surety & Cas. Co. 198 Minn. 96, 268 N.W. 843, did not decide that this action was not commenced within the time limited for bringing the same. The point was not raised below so as to be reviewable on this appeal.
Garnishment -- property not garnishable -- contingent liability.
3. The money due to a contractor under a construction contract by the terms of which the contractor is obligated to pay for labor and material used in executing the contract but which the contractor by the terms of the contract is not obligated to pay before he is to receive payment from his employer under the contract, is not a contingent liability within the meaning of 2 Mason Minn. St. 1927, § 9360.
Principal and surety -- judgment against principal -- conclusiveness as to surety.
4. A judgment recovered against a principal in a bond for a breach of its conditions in an action in which the surety is not a party is not evidence against the surety of any fact except its rendition.
Appeal and error -- reversal -- error requiring new trial.
5. Plaintiff, who has made out a prima facie case showing that he is entitled to substantial damages, will, for error in dismissing his case, be granted a new trial of all the issues, even though he failed to prove the amount of such damages, where it appears that the deficiency in proof may be supplied on a second trial, following Erickson v. Minnesota & Ontario Power Co. 134 Minn. 209, 158 N.W. 979.
Smith & Coughlin and Meighen, Knudson & Sturtz, for appellant.
Melrin, Brown & Sherman, for respondents.
This action was here before in Shandorf v. Sampson, 198 Minn. 92, 268 N.W. 841, where the facts are fully stated. Plaintiff bank recovered a judgment against the defendant, Sampson, on a promissory note, which it is seeking to collect by garnishment proceedings against the S. & S. Contracting Company, a subcontractor by whom Sampson was employed, the Erickson-Johnson Construction Company and R.B. Fraser Construction Company, the principal contractors with the state of Minnesota, Seaboard Surety Company, surety on their bond as such contractors, and the Standard Surety & Casualty Company, surety on the bond of the S. & S. Company to the principal contractors. Sampson furnished labor and equipment on a road-building job to the S. & S. Contracting Company, subcontractor of the contractors named. The main action and the garnishment proceeding were commenced in August, 1932. In February, 1934, supplemental complaints in garnishment were filed. On the former appeal we held that this proceeding in garnishment was an action against the contractors and their sureties to enforce the obligations of their bonds, but that plaintiff could not maintain the action because of its failure to show compliance with L. 1929, c. 369, § 2 (3 Mason Minn. St. 1938 Supp. § 9705) by serving a notice of claim within 90 days after completion of the contract, and commencing the action within one year thereafter, which are conditions precedent to liability on the bonds. In the opinion we said (198 Minn. 95, 268 N.W. 842):
A new trial was granted. On the new trial it was stipulated that a written notice of claim, complying with § 9705, had been filed in due time by Sampson with the commissioner of insurance. Pertinent findings of the court are that Sampson furnished work and equipment to S. & S., that he received no money directly for such work and equipment, but that the garnishees had paid certain claims against Sampson; that on August 13, 1932, Sampson filed statutory notice of claim with the commissioner of insurance; and that the garnishment summonses had been served on respondents on various dates between August 15, 1932, and August 29, 1932. There was no direct finding that Sampson had an unpaid claim against S. & S. for a definite amount. As conclusions of law the court held that no action upon the bonds had been commenced within one year after filing the notice of claim, and that the amount, if any, due from the garnishees on the dates of service of garnishment summonses, was due only upon a contingency. Judgment of dismissal with prejudice was ordered in favor of respondents. The bank, by Gilloley, its receiver, appeals from an order denying its motion for amended findings or a new trial.
1. On the former appeal (198 Minn. 92, 268 N.W. 841) the contention of the present respondents was sustained that the proceeding in garnishment upon the supplemental complaint against the garnishees was an action on the bonds which had to be brought within one year. The question now is whether that action against the garnishees was commenced within one year after Sampson filed the notice of claim against the garnishees under the bonds. The action against the garnishees was commenced within one year if it was begun at the time of the service of the garnishment summonses but not if it was commenced at the time of the filing of the supplemental complaint. A supplemental complaint in garnishment is a continuation of the pending garnishment against the garnishee. Mahoney v. McLean, 28 Minn. 63, 9 N.W. 76; Trunkey v. Crosby, 33 Minn. 464, 23 N.W. 846; S.E. Olson Co. v. Brady, 76 Minm. 8, 78 N.W. 864. Mahoney v. McLean, supra, holds that the supplemental complaint is in continuation of the pending garnishment proceeding; that, if the garnishee is discharged upon the disclosure, the proceeding is ended; that the proceeding on the supplemental complaint is not a new action and that if the pending garnishment has been terminated by a discharge of the garnishee it cannot be continued at all, whether by supplemental complaint in garnishment or otherwise. In Trunkey v. Crosby, supra, the garnishee denied liability, and leave to file a supplemental complaint was granted, which was served not upon the garnishee personally, but upon his attorney who appeared for him at the disclosure. It was claimed that the service on the attorney was not good on the ground that the notice was in the nature of original process to bring the garnishee into court. In holding that the garnishee was already a party to the proceeding before leave was granted to serve and file the supplemental complaint, Mr. Chief Justice Gilfillan said :
In S.E. Olson Co. v. Brady, supra, holding that the supplemental complaint in garnishment only continues the pending garnishment and is not the institution of a new action, we distinguished cases holding that a proceeding by supplemental complaint under statutes somewhat different from ours is the institution of a separate action.
That the conclusion reached in Mahoney v. McLean, Trunkey v Crosby, and S.E. Olson Co. v. Brady, supra, is clearly right is manifest from the purpose of and procedure in garnishment. The purpose of garnishment is to reach property of the defendant in the hands of the garnishee, to apply it in satisfaction of the judgment. Knudson v. Anderson, 199 Minn. 479, 272 N.W. 376. The procedure in garnishment is with an eye solely to that purpose. A garnishment is a proceeding in the main action. It is not an independent action but merely an ancillary proceeding, to secure and make effectual any judgment recovered in the main action. Where the court has jurisdiction in personam of the defendant, the proceedings are much in the nature of a creditor's bill by which the garnishee is brought in as an additional party, and take on a dual aspect -- that of an action against the defendant to recover judgment upon the cause of action set forth in the complaint in the main action and that of an...
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