Joy v. Two-Bit Corp.

• Decision Date: 22 December 1938
• Docket Number: No. 115.,115.
• Parties: JOY v. TWO-BIT CORPORATION et al.
• Court: Michigan Supreme Court

287 Mich. 244

283 N.W. 45

JOY

v.TWO-BIT CORPORATION et al.

No. 115.

Supreme Court of Michigan.

Dec. 22, 1938.

Action by William M. Joy against the Two-Bit Corporation, R. K. Lee, and others, jointly and severally, to recover damages on an express contract, wherein plaintiff filed affidavits for writs of garnishment before judgment against the Chrysler Corporation and others. From an order dismissing a writ of garnishment against the Chrysler Corporation and releasing and discharging the garnishee defendant, and from an order releasing the same garnishee defendant from the effect of a later writ, plaintiff appeals.

Orders vacated and cause remanded for further proceedings.

Appeal from Circuit Court, Wayne County; Harry B. Keidan, judge.

Argued before the Entire Bench.

Lewis & Watkins, of Detroit (John R. Watkins and William F. Fratcher, both of Detroit, of counsel), for appellant.

Rich & Willis, of Detroit (Samuel S. Willis, of Detroit, of counsel), for appellee R. Kenneth Lee.

BUSHNELL, Justice.

This is an appeal from two circuit court orders. The first, dated April 21, 1938, dismissed a writ of garnishment issued on October 16, 1937, against Chrysler Corporation and released and discharged the garnishee defendant; the other, dated April 28, 1938, released the same garnishee defendant from the effect of a writ dated January 20, 1938.

On January 12, 1937, plaintiff began a personal action against defendants upon an express contract, claiming damages in the sum of $63,894.30. On the same date plaintiff filed an affidavit for writ of garnishment before judgment against the Detroit Bank, the Commonwealth Commercial State Bank, the Manufacturers National Bank of Detroit, the National Bank of Detroit, and the Chrysler Corporation. All of the banks, except the Manufacturers National, made a disclosure of no indebtedness and the Manufacturers disclosed that R. K. Lee, one of the defendants, and Florence L. Lee (his wife) had borrowed $3,000 on a 30 day note, maturing February 3, 1937, and secured by a certificate for 150 shares of Chrysler Management Trust, the certificate for same being registered in the name of R. K. Lee. The bank said that it did not know who was the owner of the shares and it demanded a trial of the statutory issue. This disclosure was filed on January 29, 1937. On July 14, 1937, the parties stipulated that the service made upon the Chrysler Corporation on January 13, 1937, by delivery of a copy of the writ of garnishment to R. K. Lee, might be quashed and held for naught, and that the default entered against the Chrysler Corporation might be set aside and the proceedings discontinued as to Chrysler Corporation. An order was entered in accordance with this stipulation.

On June 15, 1937, a motion was made for an order directing the Manufacturers National Bank to release to the principal defendant, R. K. Lee, the certificate for 150 shares of Chrysler Management Trust on the theory that such property was not garnishable under the statute. On September 27th an order was entered releasing this property for delivery to Lee. This was followed with a motion to set aside the order and for a rehearing. A countermotion was filed by the bank and plaintiff's motion to set aside the order was denied on October 20th.

On October 16th plaintiff secured another writ of garnishment before judgment against the Chrysler Corporation, which was properly served. Chrysler filed a disclosure on November 4th, denying liability and claiming no indebtedness to Lee. Special interrogatories were filed by plaintiff on November 10th and 15th, to which answers were made on November 19th, and plaintiff, on November 22nd, filed a demand for trial of the statutory issue against Chrysler. In January of 1938 a motion and an amended motion to dismiss were filed by Lee, who appeared specially, and, on January 20th, plaintiff filed another affidavit for writ of garnishment before judgment against Chrysler. The disclosure filed February 9th says that, at the time of service of this last writ, Chrysler Corporation was indebted to Lee for royalties in the sum of $312.68 On April 25th, Lee again appeared specially and moved to dismiss the garnishment proceedings pending against Chrysler Corporation and, in particular, to release Chrysler from any liability resulting from the mutual dealings between Lee and Chrysler in relation to the so-called Management Trust, and to quash the service of the writ issued on January 20th, and the writ itself.

The several motions assert that the successive garnishments were brought for the purpose of harassing and embarrassing Lee, with full knowledge of the fact that any claim which he might have had against Chrysler was neither due nor payable at the time of the writ, that a previous order had released the fund as not being subject to garnishment, and that the garnishments were for the purpose of circumventing any decision which might be entered by the circuit court upon a motion to dismiss the writ issued on October 16th. It was also claimed that the ‘institution of the garnishment proceedings' constituted an abuse of process. Unreasonable delay and other arguments were advanced in support of the claim of abuse of process. The trial court filed a written opinion in which it was pointed out that, following the entry of the order on September 25, 1937, granting the motion to release the trust certificate on the ground that it was not subject to garnishment, the Manufacturers Bank still retained possession of the instrument until 20 days after the denial of a petition for rehearing. The court was of the opinion that the question of lack of jurisdiction over the subject matter, viz., the interest of Lee in the Chrysler Trust, might properly be raised by motion, citing Michigan Court Rule No. 18; Act No. 182, Pub.Acts 1937 (3 Comp.Laws 1929, § 14858, Mason's Supp.1937 [Stat.Ann. § 27.1856]), and a number of authorities. The court discussed at length the provisions of the Chrysler Management Trust indenture and held that the interest of the defendant in the Management Trust was an interest in a common law trust which could not be the subject of garnishment process; that among these provisions it was provided that the beneficiary must, within one year after the termination of his employment, transfer his certificate to the Chrysler Corporation and that, ‘upon such surrender and transfer and assignment, the corporation will pay,’ etc. Lee terminated his employment with the Chrysler Corporation on July 1, 1937, and the court held that, at the time of the service of the writ issued on October 16, 1937, the certificate had not been transferred or assigned and defendant Lee could not have at that time maintained any action against the garnishee defendant, and, therefore, ‘plaintiff's writ of garnishment was unavailing’. The court quoted from Blake v. Hubbard, 45 Mich. 1, 7 N.W. 204, on the subject of improper delay in garnishment proceedings on the part of plaintiff and held that there had been an unexplained delay of at least nine months, and that plaintiff ‘through successive steps and writs has tied up the property of the defendant and then without prosecution of those proceedings, has taken fresh steps to continue the process'. The court said that, to sanction the procedure of plaintiff, would be to encourage the oppressive use of a harsh remedy and, under the rules laid down in Erb-Kidder Co. v. Levy, 262 Mich. 62, 247 N.W. 107, and Tsingos v. Michigan Packing Co., 272 Mich. 7, 260 N.W. 783, there was an abuse of the court's process.

The facts presented by this appeal do not justify the conclusion that there was either an unreasonable or unexplained delay on the part of plaintiff. The actual interval between the commencement of the principal case or the issuance of the writ of garnishment and the framing of the issue on either action is not necessarily controlling. A charge of delay must always be considered in the light of the circumstances of the case. What may be too long under one set of facts may not be of sufficient length under another.

In Kiely v. Bertrand, 67 Mich. 332, 333, 34 N.W. 674, 675, the court said: ‘The act...