Maury v. Toledo Logging Co.

• Decision Date: 22 July 1931
• Docket Number: 23065.
• Citation: 163 Wash. 563,1 P.2d 896
• Parties: MAURY v. TOLEDO LOGGING CO. et al. (TOLEDO STATE BANK, Garnishee.
• Court: Washington Supreme Court

1 P.2d 896

163 Wash. 563

MAURY v. TOLEDO LOGGING CO. et al. (TOLEDO STATE BANK, Garnishee.

No. 23065.

Supreme Court of Washington

July 22, 1931

Department 1.

Appeal from Superior Court, Lewis County; H. E. McKenney, Judge.

Action by H. J. Maury against the Toledo Logging Company and others wherein the Toledo State Bank was made garnishee. Judgment for plaintiff, and the garnishee appeals.

Affirmed.

Hull &amp Murray, and Grant Armstrong, all of Chehalis, and J. H Jahnke, of Centralia, for appellant.

C. D. Cunningham, of Centralia, and Ponder & Ponder, of Chehalis, for respondent.

HOLCOMB J.

This is an appeal from a judgment in favor of respondent as garnishor against appellant as garnishee defendant upon a controverted answer of the garnishee defendant, tried by the court.

On October 25, 1927, respondent recovered judgment against the principal defendant, Toledo Logging Company, a corporation, in the sum of $5,556; the judgment remained wholly unpaid and unsatisfied, except that by application of the sum of $916.33 previously recovered by garnishment against the same garnishee defendant on October 19, 1926, the balance left due and unpaid was $4,639.67, with interest thereon from October 25, 1927, at 6 per cent. per annum. On about November 15, 1926, a second writ of garnishment was issued in the cause directed to the same garnishee defendant, which on that same date made answer to the writ and denied that it was indebted to the principal defendant or any other of the defendants named in the writ, denied that the principal defendant or any other of the defendants was the owner of any stock in its bank, and stated that it had no personal property belonging to the principal defendant or any of the other defendants named. In the answer it was further alleged that if there was any fund or deposit in the Toledo State Bank which belonged to the principal defendant or any other of the defendants and if such funds were deposited to the name and credit of any other person, it had no knowledge of such funds. This answer of garnishee defendant was controverted by respondent, who alleged in his controverting answer and affidavit that the garnishee defendant did, when the last writ was served upon it, have a large sum of money in its possession belonging to and was indebted to the principal defendant in a sum in excess of the amount sued for by respondent, which indebtedness consisted of a deposit of money in the garnishee defendant's bank belonging to the principal defendant, which fund stood in the name of William Uhri, and although the money of the principal defendant, the money had been placed in the name of William Uhri for the sole purpose of defrauding the creditors of the principal defendant, and that the principal defendant and the garnishee defendant had conspired together how to place the money of the principal defendant beyond the reach of its creditors; that the money and the whole thereof was, in fact, the money of the principal defendant, and that the garnishee defendant well knew that it belonged to the principal defendant and that it, as garnishee defendant, was indebted to the principal defendant in the amount thereof; that Uhri was merely a figurehead and that his name was used by the principal defendant and the garnishee defendant for the purpose of concealment; and that Uhri never had at any time any right, title, or interest in such deposit or any part thereof, all of which was well known to the garnishee defendant.

Upon these issues the trial court, after having heard the witnesses and judging their credibility, found in favor of respondent.

The trial court made twelve findings of fact and a conclusion of law to the effect that respondent was entitled to judgment against appellant, garnishee defendant, in the sum of $4,639.67 with interest thereon from October 25, 1927, at the rate of 6 per cent. per annum until paid, and costs and disbursements. A number of findings and a conclusion in favor of appellant were submitted by it, which were rejected by the trial court. Judgment was entered in accordance with the findings and conclusion made by the court.

According to the testimony on behalf of respondent, the writ of garnishment on which this hearing was had, after being issued on November 15, 1926, was served on Buckmaster, president and managing official of appellant, at about 1:15 to 1:30 p. m. of that day. Immediately Before the service of the writ, a little after 1 o'clock, Buckmaster and Shives, president and managing officer of the Toledo Logging Company, the principal defendant, drove up to the bank together, got out of the car, and went into the bank. Shives had in his hand what appeared to be a check book with some papers in it. He was in the bank for about five minutes, and when he came out no papers were to be seen. About fifteen minutes after Shives came out of the bank the writ was served. Upon the service of the writ on him, Buckmaster said nothing, but was observed to have become very nervous. Uhri was the bookkeeper for both the Toledo Logging Company and the Winlock & Toledo Logging & Railway Company, both of which were managed by Shives. Uhri had no personal interest in either of these companies, being merely a salaried employee. He had a small personal account of his own in the above bank, and there was also a balance of $378.05 standing in his name in the bank which was derived from the sale of logs by the logging company to the Winlock & Toledo Lumber Company, which had kept the account in Uhri's name, after the first writ of garnishment had been served, for the purpose of paying the obligations of the logging company. After the visit of Shives to the bank in company with Buckmaster, there was then on deposit in the name of Uhri $10,378.05, of which $10,000 was under the name of 'William Uhri, Special.' It also appears that on November 13, 1926, the Winlock & Toledo Lumber Company forwarded to Shives, one of its officers, its check payable to him in the sum of $10,000, drawn upon the Bank of California of Portland, Or. This is the check which was deposited to the credit of 'William Uhri, Special,' but the deposit slip was made out in the name of 'William Uhri, No. 2, checks as follows: A. C. S. $10,000.' This deposit slip bears upon its face at the bottom the following words: 'In accepting checks on other banks, this bank accepts as agent only for collection of same and assumes no responsibility for payment until proceeds have been received. Under these conditions items previously credited may be charged back to depositor's account.'

At this point occurs a heated contest as to what the facts are. Appellant claims that immediately after the service of this writ of garnishment, Buckmaster made inquiry of Uhri and Shives by telephone as to whether or not the logging company had any interest in the deposit of the $10,000, and was informed by them that the logging company had no interest therein. Appellant strenuously insists that this testimony is uncontroverted, while respondent contends that all the reasonable inferences and circumstances show to the contrary. Appellant proceeded immediately to honor checks payable to laborers on the October pay roll of the principal defendant in the aggregate of more than $8,000 and also other bills of the logging company. On the same day, appellant answered that it was not indebted to the logging company and had no property or effects of the logging company in its possession or control. All the money had been checked out at the time the answer was verified. Up to the day of the service of the writ, the answer of appellant, and paying out the funds by appellant, the logging company had been in full operation. From the time of the service of the previous writ of garnishment and adjudication thereon there had been no change by Uhri in the method of paying the men working for the logging company, and for freight and supplies. When the $10,000 check was deposited in appellant bank, there was no understanding between the bank, the lumber company, and the logging company, or with Shives or Uhri, that the funds standing in the name of Uhri were to be used for any particular purpose. Ever since the account had been opened in the name of Uhri, the funds had been available for the exclusive use and benefit of the logging company. Shives had asked Uhri, who it will be remembered was only a salaried bookkeeper, if it would be all right to deposit money in the bank in his name. This being assented to, the deposits were so made. After the service of this writ of garnishment, the Winlock & Toledo Lumber Company, the drawer, caused payment to be stopped on the $10,000 check at the bank on which it was drawn. The credit entered by appellant for the check was thereupon charged back against the deposit. The lumber company thereafter indemnified appellant in the aggregate amount of the checks it had paid out.

After this writ of garnishment was served, on application of respondent. Uhri was brought in as a party defendant in the action. Subsequently, Uhri testified in a deposition that he had no interest whatever in the special deposit carried in his name in appellant bank and that he paid it out on the obligations of the logging company. Later, Uhri died and his personal representative was not substituted in the action. At the trial of the case, on motion of attorneys who had represented him, he was dismissed as a party.

The first contention of appellant is that the controverting answer of respondent to the answer made by appellant was defective because it contained no allegation that the principal defendant had no other funds or property from which respondent could satisfy his claim.

The above contention is untenable. McAvoy v. Jennings, 44 Wash. 79, 87 P. 53,...