Richard v. Industrial Trust Co., 9726

• Decision Date: 05 April 1957
• Docket Number: No. 9726,9726
• Citation: 130 A.2d 549,85 R.I. 292
• Parties: Rita D. RICHARD v. INDUSTRIAL TRUST COMPANY. Ex.
• Court: Rhode Island Supreme Court

Page 549

130 A.2d 549

85 R.I. 292

Rita D. RICHARD v. INDUSTRIAL TRUST COMPANY.

Ex. No. 9726.

Supreme Court of Rhode Island.

April 5, 1957.

Fergus J. McOsker, Providence, for plaintiff.

Hinckley, Allen, Salisbury & Parsons, Edward M. Watson, Thomas J. Hogan, Providence, for defendant.

CONDON, Justice.

This is an action of assumpsit to recover a sum of money which the plaintiff, a nonresident, had on deposit in her name alone in the defendant bank. The case is here on the plaintiff's bill of exceptions to certain rulings of the superior court overruling her demurrers to the defendant's fourth and fifth pleas to the declaration and sustaining the defendant's demurrers to several replications to each plea which the plaintiff filed after her demurrers had been overruled. The defendant filed four other pleas but it is agreed that these may be ignored at this time.

It appears from the fourth plea that on March 25, 1949, Lea E. Stanley commenced an action at law against Robert W. Stanley of Groton, Massachusetts, by a writ of attachment of his personal estate standing in the name of Rita Richards in the Industrial Trust Company; that said company on April 11, 1949, filed an affidavit stating that it had funds in the name of Rita D. Richards but it had no record or knowledge that Robert W. Stanley had any interest therein; and that it prayed the judgment of the court whether it was chargeable as his trustee. Variations in the plaintiff's last name and the omission of her middle initial in the documents referred to are of no significance.

It further appears from said plea that on May 31, 1949, Rita Richards by her attorneys entered a special appearance in the Stanley case but did not thereafter file any claim to the funds under attachment therein or take any other action; that on February 17, 1950, a nil dicit judgment for $2,876.55 was entered against Robert W. Stanley but was not appealed from within the time permitted by law; and that the Industrial Trust Company was charged as garnishee in that amount plus costs. It also appears that on May 31, 1950, upon demand therefor, defendant paid such judgment. The record of Lea E. Stanley v. Robert W. Stanley, Law No. 116985 is expressly incorporated by reference as a part of the plea. The plea further alleged that any question as to its liability for paying such amount was rendered res judicata by that judgment.

The fifth plea repeats the above allegations and adds that the Industrial Trust Company on March 28, 1949, notified Rita D. Richards that her account had been attached; that on April 1, 1949, it further notified her thereof by mailing to her a statement of her account disclosing that fact; that on April 11, 1949 and on two other occasions it notified her, through her attorneys, to prove her claim to the attached funds in the Stanley suit; that on the same date it filed its affidavit as garnishee and sent a copy thereof to her attorneys; and that in spite of said notices she failed and refused to assert her claim in the Stanley suit. The plea concludes therefrom that plaintiff is estopped to prosecute her action against it for such funds.

By her demurrers plaintiff admits the facts above pleaded but denies that either plea shows facts which render her claim against it res judicata or otherwise estop her from prosecuting her action against defendant. The Superior Court, relying principally on the ground that plaintiff's entry of a special appearance, without more, in the Stanley suit was the equivalent of a general appearance, held that she had knowledge of such suit and therefore as a party therein could have made claim to the attached funds under General Laws 1938, chapter 550, § 15. That being so, the court concluded she was bound by the judgment in that suit. The court further held that the facts alleged in the fifth plea constituted legal notice to plaintiff that her right to the funds on deposit with defendant was disputed by the plaintiff in the Stanley suit; that in the face of such claim she could not stand by and do nothing; and hence she was estopped from asserting her claim to the funds against defendant after it had paid the judgment in that suit.

The plaintiff contends that the superior court erred in overruling her demurrer to the fourth plea for two reasons: first, that the special appearance by attorneys gave no jurisdiction to the court in the Stanley suit; and secondly, if the mere entry of such appearance amounted to a general appearance, then as a party she should have had notice of the proceeding at which defendant here was charged as garnishee. The defendant argues that there is good authority for the view that an entry of special appearance without more is equivalent to a general appearance and cites Wrinn v. Sellers, 252 Mass. 423, 147 N.E. 899, upon which the superior court relied in rejecting plaintiff's contention that the plea of res judicata was not a bar to her action against defendant.

Whatever the merit of that decision may be in the light of the facts that were before the Massachusetts court, we cannot follow it in the circumstances of the case at bar. Here we have a nonresident of this state who was not a party served with process in the Stanley suit and who was not under a lawful duty to intervene therein, nor was she otherwise charged with legal notice that money on deposit with defendant in her name alone was being claimed as the property of another in that suit. The mere entry by her attorneys of a special appearance without more did not supply the want of such lawful notice.

It is to be assumed that the only purpose of such special appearance is to attack the jurisdiction of the court. 3 Am.Jur., Appearances, § 42, p. 810. Marr v. Cook, 147 Mich. 425, 111 N.W. 116. In that case the defendant appeared specially but did not object specifically to the jurisdiction, and the plaintiff argued that this was tantamount to a general appearance. In rejecting such contention the court, 147 Mich. at page 427, 111 N.W. at page 117, stated: 'No authorities are cited in support of this contention, and I do not think it reasonable. I think we should give to the word 'specially' the construction which would ordinarily be accorded it. The statement of counsel that he appeared specially is certainly a statement that he does not appear generally, and it is a sufficient indication of an intention to reserve the right to question the jurisdiction of the court.' By the majority view any appearance to attack an attachment or garnishment is a special appearance which does not give the court jurisdiction. 3 Am.Jur., Appearances, § 27, p. 798. See also Adams v. Trepanier Lbr. Co., 117 Ohio 298, 158 N.E. 541, 55 A.L.R. 1121 and 129 A.L.R. 1242.

The plaintiff in the case at bar was not chargeable with legal notice merely because by her special appearance she must have had knowledge of the claim being made against her funds in the defendant bank. As was said in Wade v. Wade's Adm'r, 81 Vt. 275, 69 A. 826, 827, the defendant here 'errs in assuming that knowledge is the same as notice. If this were so, there could be no such thing as special appearances; for one could not authorize a special appearance without showing knowledge and so charging himself with notice.'

It can avail the defendant nothing that plaintiff did not take any action after appearing specially. In Green v. Green, 42 Kan. 654, 22 P. 730, where a party appeared by attorney specially and moved to set aside a judgment obtained against him without proper service, it was held that even the making of such a motion did not give the court jurisdiction over him nor authorize it to require him to answer or plead. Another case which illustrates the application of this principle is Farmers Trust Co. v. Alexander, 334 Pa. 434, 6 A.2d 262, where the court refused to foreclose a party merely because of what it termed the doubtful action of his counsel in placing a sci. fa. on the argument list. At page 438 of 334 Pa., at page 264 of 6 A.2d the court stated: 'It is fundamental that parties not of record, who have not hitherto appeared generally in the pending litigation, cannot be required to answer a rule not addressed to them, merely because they had notice of its existence.' Here we understand the court's use of the term 'notice' as synonymous with knowledge and not with legal notice.

When the relation of the plaintiff to the Stanley suit is correctly understood, we think it will be clear that the judgment therein charging the garnishee cannot be deemed res judicata of her claim. Her relation to that judgment is similar to that of the plaintiff in Belser v. Nichols, Ltd., 32 Hawaii 78. In that case Belser gave one Hooper a check for $2,000 which Hooper deposited in his bank account. It appeared this money had been intrusted to Hooper to build golf courses in Australia and for no other purpose. Nichols, Ltd. sued Hooper after he had left for Australia and attached the money remaining on deposit in the hands of the bank. Belser notified the bank he was the owner of such balance. Notwithstanding the bank's contention that it should not be charged until ownership was determined, the lower court entered judgment against it without giving legal notice to Belser.

Belser sued to enjoin application of the account to the satisfaction of the judgment obtained by Nichols, Ltd. It was contended by Nichols, Ltd. that Belser had no right to the account 'because he did not assert it in the suits against Hooper in the district court and there have his rights determined.' Apparently Nichols, Ltd. relied upon Belser's knowledge of the attachment in that suit as sufficient ground for claiming the judgment therein was res judicata as to him. The court, at page 83, rejected such claim for the following reason: 'Belser was a stranger to those suits and so far as the record shows to the contrary had no legal notice of their pendency or that the money which he now claims is his had been garnished. ...