Miller & Miller Auctioneers, Inc. v. G. W. Murphy Industries, Inc.
| Decision Date | 06 January 1975 |
| Docket Number | No. 4356,4356 |
| Citation | 530 P.2d 416 |
| Parties | MILLER & MILLER AUCTIONEERS, INC., Appellant (Garnishee below), v. G. W. MURPHY INDUSTRIES, INC., Appellee (Plaintiff in Attachment below). |
| Court | Wyoming Supreme Court |
Rufus S. Garrett, Jr., Garrett, Settle & Callaway, Fort Worth, Tex., and James L. Applegate, Hirst, Applegate & Dray, Cheyenne, for appellant.
Donald R. Winship, Everett, Everett, Winship & Kastanek, Casper, for appellee.
Before PARKER, C. J., and McEWAN, GUTHRIE, McINTYRE, * and McCLINTOCK, JJ.
Miller and Miller Auctioneers, Inc., hereinafter referred to as Miller, appeals the personal judgment against it entered by the District Court of Converse County, Wyoming, in favor of G. W. Murphy Industries, Inc. (Murphy) in the amount of $25,945.90.
The proceeding began as an action by Murphy against Willey Drilling, Inc., a corporation (the company) and James C. Willey, dba B & W Drilling Company (Willey). By the first count of the complaint Murphy sought a combined judgment against both defendants in the amount of $20,079.48, which claim was in the second and third counts broken down as between the company and Willey, claiming $12,693.57 against the company and $7,386.21 against Willey individually. Service was had upon both the company and Willey in Converse County and on the same day notice of garnishment under writ of attachment issued at the time of the summons was served upon Miller through its corporate president, also found in Converse County. By this notice Miller was notified that Murphy claimed that Miller had property or credits belonging to defendant and that Miller, as garnishee, should hold such property and be liable to Murphy therefor from the time of service of the notice.
At the time of the service, endorsed on the notice as having been made by the sheriff at 2:25 p. m. on January 12, 1971, the date of filing of the complaint and issuance of the summons, Miller had completed an auction sale of certain oil well drilling equipment, owned either by the company or Willey. At the time of such service Miller had in its possession either cash or collectable checks in the sum of $148,254.25, the total amount realized through the auction sale. Miller at that time ignored the notice, paid out all of the proceeds of the sale to others than Murphy except $2,942.03 and on or about January 27, 1971 commenced an interpleader action in the United States District Court for the District of Wyoming, naming the company, Willey, Murphy, and other parties as defendants. On that date Miller secured an order of the federal court staying any action or proceeding by Murphy or others until further orders of that court. Upon appeal to the United States Court of Appeals for the 10th Circuit it was therein held that the district court had no jurisdiction of the action except to settle a claim which had been filed by the United States for a sum in excess of that paid into court by Miller, for which amount judgment was directed against it with the balance of the suit to be dismissed, Miller & Miller Auctioneers, Inc. v. G. W. Murphy Industries, Inc., (10 Cir.) 472 F.2d 893. Payment of this judgment left Miller in a deficiency situation.
In the meantime and on February 2, 1971, Murphy secured default judgment against the company and Willey in the Converse County District Court, the judgment being broken down into two amounts, the first against the company only for $12,697.23 plus interest, and the second against the company and Willey dba B & W Drilling Company in the amount of $7,386.21 plus interest. With interest and costs the total amount of the default judgment came to $21,557.21, which amount, with further accruing interest, represents the amount of the judgment against Miller attacked on this appeal.
After filing of memoranda and exchange of letters in the trial court it issued a preliminary and later a final decision holding in favor of Murphy and directing the preparation of a judgment. In addition to finding generally in favor of Murphy the judgment finds that on the day of service of the garnishment Miller had within its possession and control money and credits belonging to Willey Drilling, Inc. and James C. Willey in the amount of $148.254.25, being 'the proceeds from the sale of personal property which were bound by the Writ of Attachment and Garnishment Notice on January 12, 1971'; and that Miller was liable to Murphy from the time of service of notice of garnishment for money and credits which it had voluntarily disbursed not in response to the notice. However, allowance was made for $56,415.05, representing costs of advertising the sale, advances to the company, commissions, and the amount paid the United States, leaving $91,839.20 available to satisfy the attachment. Judgment was entered in the gross amount mentioned without breaking it down as between corporate or individual property which had been sold.
The action had been submitted to the trial court on the pleadings in the state court, including the answer of Miller to the notice of garnishment, filed after completion of the proceedings in the federal courts, and Murphy's traverse thereof, together with a 'shears-and-paste-pot' transcript of exhibits and testimony from the federal trial, which documents were accompanied by a stipulation that without admitting the truth of the testimony, the parties were in agreement that if the witnesses were present in the state court, they would testify in the same way. While the result is a difficult record for us as well as the trial court, we believe that the following facts are substantially established.
Mr. Willey had first been associated in a partnership engaged in the drilling of oil wells. Some equipment had been acquired by this partnership and liens thereon created which were still in existence at the time of the sale and attachment proceedings. In late 1968 Willey bought out his then partner, Baker, in a manner which is not too clear from the record, but left at least some of these liens in effect. At some undisclosed date he formed the corporation, Willey Drilling, Inc., but apparently did little or nothing about making a formal transfer of the business property to the corporation. He did testify without objection that it was his intention to put all property into the corporation except an airplane, title to which was intentionally left in him and remained in him at the time of the sale. Various trucks and automotive equipment requiring formal titles under Wyoming law remained in his name or the partnership. The record does not diclose what amount of either titled or untitled property may have remained in his name or that of the partnership so we cannot even guess at the legal title to the property which was subsequently sold at the auction sale. From what does appear in the record there seems to have been no change in his operations from the time he took over management of the partnership to the time of the sale.
Some time prior to November 25, 1970 Willey decided to dispose of all equipment involved in the operation and on that date executed an instrument entitled 'Auction Agreement', signing the instrument in handwriting 'Willey Drlg Inc. by James C. Willey'. The instrument also shows execution in behalf of Miller by Dan C. Abrams, shown by his testimony to have been a vice president at that time. There is nothing to indicate that Willey signed the agreement in any individual capacity but on the face of the instrument, in a blank space in the printed form there is the following notation under the printed heading, 'Property to Be Sold':
'Inventory attached.
'$35,000 advance to be deducted from Proceeds of Sale.
'$10,000 advanced the 25th day of Nov-1970
'$25,000 to be advanced the 10th day of Dec-1970'
The attached inventory lists a considerable amount of property, presumably all of the property sold for $148,254.25, and specifically includes the airplane. No attempt is made in the inventory to distinguish between property title to which may have been in the corporation and title to which may have been in Willey or B & W Drilling Company.
Again there is no definite showing in the record but a substantial part of this property appears to have been subject to formal written liens although it does not appear that the liens on titled equipment were in all instances endorsed on the certificate of title. The auction agreement itself grants the auctioneer a lien on the property with power of sale 'for all funds advanced by Auctioneer to pay off liens on said property, expenses of make-ready and sale, commission and other funds advanced to or for the benefit of the Owner in connection therewith.'
All the property was delivered into the possession of Miller as auctioneer and after an extensive advertising campaign a sale was held at Douglas, Wyoming on January 12, 1971, apparently being completed just before the service of the notice of garnishment. An advertising brochure states that the sale will be for cash, everything will be sold, without minimum bids and without reservations.
Miller testified without objection that he was selling property for Willey Drilling Company without defining just what he meant by that. He had conversations with Willey prior to the sale and either he or his representative Abrams had talked with creditors, particularly Associates Finance Company, claiming a lien for $59,899.58. Concerning his conversations with Willey he specifically testified:
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