Mason v. Beebee

• Decision Date: 17 December 1890
• Citation: 44 F. 556
• Parties: MASON v. BEEBEE et al.
• Court: U.S. District Court — Southern District of Iowa

44 F. 556

MASON v. BEEBEE et al.

United States Circuit Court, S.D. Iowa, Central Division.

December 17, 1890

W. S Clark, for plaintiff.

J. H Jones, for garnishee.

SHIRAS J.

The plaintiff herein obtained judgment in this court against J T. Beebee and I. N. Rice for the sum of $449.85, on which execution was issued, and service thereof was had by garnishing the Rice-Hinze Piano Company, a corporation created under the laws of Iowa. J. C. Macy, the president and treasurer of the company, answered the garnishment on behalf of the company, and the plaintiff now moves for judgment on such answer, claiming that it appears therefrom that the garnishee, since the service of the writ of garnishment, has paid for the benefit of I. N. Rice, one of the execution debtors, the sum of $500, which amount should have been held for the benefit of the execution plaintiff.

In the answer on behalf of the garnishee the following facts are stated: The Rice-Hinze Piano Company was organized at Des Moines, Iowa, in March, 1889, and continued the manufacturing of pianos at that place until about the 1st of June, 1890 when the factory was removed to Chicago. The capital stock of the corporation was fixed at the sum of $25,000, of which J. C. Macy owned $22,000, and Mrs. L. E. Rice, wife of I. N. Rice, owned $1,000, and Mrs. Hinze $2,000; that it was agreed that the members of the company should devote their time and services to the work of the company without compensation; that when Mrs. Rice subscribed for her shares of stock, it was agreed that she should contribute the time and services of her husband in place of her own, and that if it became necessary the company should pay her, for her living expenses, the sum of $25 per week; that so long as the business was carried on at Des Moines no payments were made her, but after the removal to Chicago weekly payments of $25 were made to her. Touching any arrangement between the company and I. N. Rice personally, the answer of Mr. Macy is as follows:

'Neither the Rice-Hinze Company, nor myself, as its representative, nor myself individually, nor no other person representing either the company or myself, has ever made any arrangements, direct or otherwise with I. N. Rice, or any one representing him, for his services, except as hereinbefore stated; that is, that Mrs. Rice should contribute the services of her husband to the company in place of her own services. The money that is paid to Mrs. Rice is charged to her account on the books of the company, and I. N. Rice has absolutely nothing to do with the matter. He is not employed by the company, is not working for the company, and is not paid by the company. He is simply sent there by Mrs. Rice to represent her interests, and to fill her position, and to do the work which, under the agreement made when said company was organized, was to be done by her, and which would be done by her if she were able and capable of doing it.'

On part of plaintiff it is argued that it is fairly inferable from the whole of the answer made on behalf of the garnishee that the arrangement made between Mrs. Rice and the company is merely a means of hiring I. N. Rice, and for his services paying the agreed sum of $25 per week. It is not to be denied that there is much force in the argument, and it may be true, as claimed, that the real purpose of the arrangement was to secure the services of I. N. Rice for the company at the price named, payment therefor to be made to his wife as a means of avoiding the claims of creditors, but I do not think the court is justified in so finding upon this motion.

To entitle an execution plaintiff to a judgment against a garnishee upon his answer alone, it must clearly appear that the liability exists. It is said by the supreme court of Iowa, in Morse v. Marshall, 22 Iowa, 290, that 'in order to charge a garnishee on his answer alone there must be in it a clear admission of a debt due to, or the possession of money or attachable property of, the defendant. * * * If it be left in reasonable doubt, whether he is chargeable or not, he is entitled to a judgment in his favor. ' The same rule is reiterated in Church v. Simpson, 25 Iowa, 408; and Hibbard v. Everett, 65 Iowa, 372, 21 N.W. 683. In the answer of the garnishee in this case there is not only not a clear admission of a debt due, but an absolute denial of any liability whatever. True, these general statements are accompanied with details intended to show the actual arrangement between the parties, and if these details, fairly construed, showed a liability on part of the garnishee, it would be so adjudged, notwithstanding the general denial of liability. The difficulty is that if we accept as true the statement of the arrangement as made by the garnishee, it does not necessarily show that the company has been indebted to I. N. Rice in the past, or will become so in the future. Suppose the answer had stated that Rice worked for the company, giving his entire time and services thereto, but that the agreement was that he should do so without receiving any pay or compensation therefor, would the court be justified in rendering a judgment against the company for what it might deem was the reasonable value of such services, upon the argument that no reasonable man would make such an arrangement, and that it must be a mere cover and sham? Clearly not, it seems to me. If issue is taken upon the answer of the garnishee, and evidence showing the fact of insolvency, and any and all other circumstances showing the real situation of the parties is introduced, then, upon such issue, the court will adjudge the matter according to the fair preponderance of the entire evidence, but upon a motion for judgment upon the answer alone the facts stated in the answer must be accepted as true, and the conclusion they require must be the one placed upon the answer. The result of a judgment in favor of plaintiff would be to compel the garnishee to pay to the plaintiff the sum of $500, while it is not made to appear from the answer that if Rice had sued, in his own behalf, the piano company, he would be entitled to any judgment against the company. If this was an action by Rice against the company, and the only evidence offered was the testimony of Macy, president of the defendant, containing just the facts and statements set forth in the answer of the garnishee, it is clear that he could not recover thereon against the company, and that for the reason that it did not appear that the company was bound to him for the work he had done, but, on the contrary, that the company was not bound to pay him for his services. Under these circumstances, I do not think the liability of the garnishee is made to appear so clearly as to justify a judgment against it.

If, however, it should be held, according to the contention of plaintiff, that I. N. Rice is in fact engaged as a foreman or superintendent in the factory at Chicago, and that the company, for such services, has engaged to pay the price or wages of $25 per week, the mode of payment testified to being merely a sham, then the question arises whether such salary or wages is not exempt from execution. Rice is a married man, and head of a family, and under the statutes of Illinois, as well as under the statutes of Iowa, his wages are exempt from execution, unless allowed to accumulate beyond $50 in amount in Illinois or beyond 90 days in Iowa. On behalf of plaintiff it is contended that as Rice is now a non-resident of the state of Iowa, his wages are not exempt from execution. In a general sense it is held that matters of exemption pertain to the remedy, and are governed by the law of the state wherein suit is brought, but the reason for such holding is that the property sought to be reached is situated where the remedy is sought, and in truth it is the situs of the property that determines what statute shall govern in the matter of exemption. Spindle v. Shreve, 111 U.S. 542-546, 4 S.Ct. 522. As to all property situated in Iowa, it is the law of Iowa which determines what portion of it, if any, may be held exempt from execution. Therefore it is held that the provisions of the statute of Illinois, for illustration, cannot be invoked to protect property in Iowa from seizure upon execution, even though the cause of action may have arisen in Illinois, and between citizens of that state. Newell v. Hayden, 8 Iowa, 140.

The question, then, arises whether the property or debt sought to be reached by the process of garnishment in this case is situated in Iowa or in Illinois. From the answer of the garnishee it appears that the factory of the piano company is situated in Illinois; the work done by I. N. Rice was so done and performed in Illinois; the weekly payments were made to him in Illinois, and he is a resident of that state. As the weekly wages were earned and came due, the debt thus created was the property of I. N. Rice, and, as a chose in action, 'follows the person of the owner and has its situs at his domicile. ' Tappan v. Bank, 19 Wall. 490. It is equally true that personal property may be held to have a situs other than that of the owner's domicile. Based upon this fact the supreme court of Iowa, in Mooney v. Railroad Co., 60 Iowa, 346, 14 N.W. 343, held that, under the attachment laws of Iowa, a debt due from the railway company to a resident of Nebraska, for wages earned in Nebraska, was a debt due in the state...