Jim Causley Pontiac, Inc. v. World Wide Auto Leasing Co.

• Decision Date: 24 August 1970
• Docket Number: No. 1,Docket No. 6819,1
• Citation: 26 Mich.App. 80,182 N.W.2d 44
• Parties: JIM CAUSLEY PONTIAC, INC., a Delaware corporation, Plaintiff, v. WORLD WIDE AUTO LEASING COMPANY, Inc., a Michigan corporation, and Donald Golden, d/b/a World Wide Auto Leasing Company, Defendants. JIM CAUSLEY PONTIAC, INC., a Delaware corporation, Plaintiff-Appellee, v. Charles B. GOLDFARB and Resolute Insurance Company, Sureties-Appellants
• Court: Court of Appeal of Michigan — District of US

Page 44

182 N.W.2d 44

26 Mich.App. 80

JIM CAUSLEY PONTIAC, INC., a Delaware corporation, Plaintiff, v. WORLD WIDE AUTO LEASING COMPANY, Inc., a Michigan

corporation, and Donald Golden, d/b/a World Wide

Auto Leasing Company, Defendants.

JIM CAUSLEY PONTIAC, INC., a Delaware corporation, Plaintiff-Appellee, v. Charles B. GOLDFARB and Resolute Insurance Company,

Sureties-Appellants.

Docket No. 6819.

Court of Appeals of Michigan, Division No. 1.

Aug. 24, 1970.

Leave to Appeal Denied Dec. 1, 1970.

Released for Publication Dec. 28, 1970.

Norman L. Zemke, Detroit, for appellants.

Michael B. Doelle, McClintock, Fulton, Donovan & Waterman, Detroit, for appellee.

Before J. H. GILLIS, P.J., and LEVIN and BORRADAILE, ^* JJ.

LEVIN, Judge.

The plaintiff, Jim Causley Pontiac, Inc., commenced this action by attachment to recover the unpaid balance of the purchase price of automobile sold to the defendants World Wide. ¹ The sheriff attached a Buick automobile which was subsequently returned to World Wide when it furnished a bond to release the attachment. ²

Jim Causley Pontiac obtained a money judgment against World Wide and subsequently moved for entry of judgment in the amount of the bond against Resolute Insurance Company, the surety on the bond. Resolute then moved for dissolution of the attachment on the ground that the Buick automobile had been transferred by World Wide to a third party before it was attached and consequently did not belong to World Wide at the time of the attachment. The trial judge denied the motion for dissolution of attachment and entered a judgment in favor of Jim Causley Pontiac against Resolute. Resolute claimed an appeal from the judgment on the bond. ³ We affirm.

The issue presented was considered in the early case of Dorr v. Clark (1859), 7 Mich. 310. Clark commenced an action by attachment against Philo Durfee and Samuel T. Atwater. Dorr and others filed a bond undertaking to produce the attached property. After judgment against Durfee and Atwater, Clark commenced an action on the bond against Dorr and the other sureties and they sought to defend upon the ground that the affidavit in attachment was defective and upon the further ground that the property when seized belonged to Sidney S. Durfee. The Michigan Supreme Court held that the affidavit was sufficient ⁴ and that the sureties could not defend by showing that the property when attached belonged to a stranger.

The substance of the statute construed in Dorr does not differ significantly from the present court rule governing attachment release bonds. Under both former and present practice, the defendant or any other person in whose possession the property is found can file a release bond. ⁵ Under the former practice the bond could be either a judgment bond or a forthcoming bond. ⁶

The distinction between a judgment bond and a forthcoming bond has been blurred and perhaps eliminated under the present court rule. It provides that the bond shall take the form of a judgment bond: 'conditioned upon the payment of any judgment entered in the case against the defendant within 60 days after it is entered.' But, by providing that 'the production of the attached property after judgment by the bondsman shall relieve him of other liability on the bond,' the rule also incorporates the principal distinguishing feature of the forthcoming bond.

The bond filed in this case is in the statutory form and, thus, is conditioned upon payment of any judgment within 60 days. But it also expressly provides that the production of the attached property would relieve the surety from liability. Whether the additional provision is mere surplusage or, as said in another early case, 'an impertinent provision,' ⁷ or whether it changes the nature of the bond filed by Resolute from a judgment to a forthcoming bond or to a hybrid judgment-forthcoming bond is, we think, of no importance. The Dorr rule applies whether the bond is in form a judgment bond or a forthcoming bond (p. 313):

'If they (the sureties) had convenanted to pay the judgment, it could hardly be urged in defense that the property, when attached, belonged to a stranger. The law does not oblige anyone to bond such property, and if he assumes, for the sake of obtaining it, to pay the debt, it is his own folly if he do so unwisely. The case is not different where he undertakes to return the attached property. He should not meddle with it until he knows what he can do safely. There is no injustice in the statutory rule. But just or unjust, the statute is peremptory, and admits of no remission. Judgment can be rendered for nothing short of the amount necessary to comply with the condition. Where, as here, it is to return the property to satisfy the execution, the value of the vessel being less than the balance due, judgment was proper for that value: CL 1857, § 4757. This view is sustained by authority. See Drake on Attachments, § 312, et seq., and cases cited. But the statute is so plain that it is not open to construction.'

The authors of Michigan Court Rules Annotated have commented that the holding in a still earlier case, Paddock v. Matthews (1853), 3 Mich. 18, ⁸ that a defendant in an attachment action cannot obtain dissolution of the attachment after he files a release bond, is out of harmony with the spirit of the General Court Rules of 1963, ⁹ that under the new rules defenses and objections are lost only by failure to assert them at the proper time, ¹⁰ and that a defendant should not forfeit his defenses by seeking immediate relief from an attachment by filing a bond. ¹¹

Whether the filing of a release bond should bar the defendant himself from later advancing all or some defenses to the attachment need not be considered in this case. The court rule provides that the dissolution of an attachment may be sought by 'any person whose property is attached or who is in possession of or has an interest in property attached.' ¹² Resolute, which claimed no interest in the Buick automobile, was, therefore, without standing to seek dissolution of the attachment ¹³ and World Wide, which did have standing and which at an early stage had sought to have the action dismissed, ¹⁴ has not appealed.

The cases cited by Resolute are not in point. In Reynolds v. Marquette Circuit Judge (1901), 125 Mich. 445, 84 N.W. 628, the statute pursuant to which the bond was filed required that it be conditioned upon payment of all damages, etc. that might be recovered by the plaintiff against the defendant 'found to be a lien upon or against the products described in said writ' (P.A.1887, No. 229, C.L.1948, § 426.6), whereas the bond here was conditioned upon payment of the judgment without qualification as to whether the damages adjudicated are found to be a lien upon the attached property. ¹⁵ In Gore v. Ray (1889), 73 Mich. 385, 41 N.W. 329 the motion to dissolve was filed by the defendant, not by the surety; ¹⁶ and, also, no bond was filed to release the attachment.

In summary, we hold that Resolute, the surety on the bond, which does not claim any interest in the attached property, (1) is without standing to move for dissolution of the attachment and (2) may not defend against a motion for entry of judgment on the bond by showing that the property when attached did not belong to the defendant.

Our disposition of this case makes it unnecessary for us to decide whether the recital in the bond furnished in this case, signed by World Wide, as principal, and Resolute, as surety, that the writ of attachment had been 'levied on the property of the said defendant,' precluded the introduction of evidence that the defendant did not own the Buick automobile when it was attached. ¹⁷

Affirmed. Costs to appellees.

* EARL E. BORRADAILE, Circuit Judge for the County of Genesee, appointed by the Supreme Court for the hearing month of June, 1970, pursuant to § 306 P.A.1964, No. 281.

1 The original complaint named only World Wide Auto Leasing Company, Inc. as the defendant. In an amended complaint Donald Golden, doing business as World Wide Auto Leasing Company, was added as a party defendant and it was alleged that the corporate defendant is the Alter ego of the added individual defendant.

2 'In every case where property is attached or garnishment is served, the attachment or garnishment may be dissolved by the posting of a bond in accordance with the rules of the supreme court.' M.C.L.A. § 600.4045 (Stat.Ann.1962 Rev. § 27A.4045).

3 While the papers seeking dissolution of the attachment, including the claim of appeal, were filed in behalf of Resolute and Charles B. Goldfarb, who signed the bond as Resolute's attorney-in-fact, since the bond was not signed by him personally and the judgment sought and obtained by Jim Causley Pontiac was entered against Resolute, and not as well against Mr. Goldfarb, it would appear that the only surety in interest is the corporate surety, Resolute.

4 See Butcher v. Cappon & Bertsch Leather Co. (1907), 148 Mich. 552, 112 N.W. 110, where, after the defendant's petition for dissolution of the attachment was denied, the Court having found that plaintiffs had a legal claim and good cause for attachment, the defendant filed a bond to pay any judgment rendered. Thereafter, the defendant moved to Quash the proceedings (see John D. Gruber Co. v. Montcalm Circuit Judge (1914), 183 Mich. 477, 149 N.W. 990) for the reason, among others, that the affidavit was defective. The Supreme Court ruled that the affidavit was jurisdictionally defective and that it was not amendable, but affirmed the order overruling the motion to quash, it would appear, from the citation of Paddock v. Matthews (1853), 3 Mich. 18, and from the basis on which the Court distinguished Reynolds v. Marquette Circuit Judge (1901), 125 Mich. 445, 84 N.W. 628, on the ground that by furnishing the statutory bond the defendant waived any defect in the affidavit.

5 See C.L.1857, §§ 4754--4757; C.L.1897, §§ 10567--10570; C.L.1929, §§...