Opinion
Docket No. 140, Calendar No. 34,223.
Submitted April 17, 1929.
Decided June 3, 1929.
Case-made from Wayne; Richter (Theodore J.), J. Submitted April 17, 1929. (Docket No. 140, Calendar No. 34,223.) Decided June 3, 1929.
Garnishment proceedings by Metz Manufacturing Company against Victor Holbeck and another, principal defendants, and Savings Bank of Caro, garnishee defendant, and Ora Holbeck, impleaded garnishee defendant. Judgment for garnishee defendant. Affirmed.
Douglas, Barbour, Moll Wing, for plaintiff.
George B. Murphy, for impleaded garnishee defendant.
By the disclosure and the answers to interrogatories, it appears prima facie that the bank, garnishee defendant, owed no sum to the defendant Victor Holbeck against whom the judgment ran in the principal suit; that it did owe his daughter, Marion E. Holbeck, $2,479.27; and that Ora Holbeck claimed this sum belonged to her. It also appears that this sum was the proceeds of cattle sold. Ora Holbeck was brought in under 3 Comp. Laws 1915, § 13149, but Marion E. Holbeck was not. Upon the trial of the statutory issue, it was claimed on behalf of plaintiff that the cattle were the property of Victor alone, that the proceeds of their sale were subject to the garnishment proceedings, and that any transfer or purported transfer of the farm and stock upon it was in fraud of creditors of Victor and void. While the offered by Mrs. Holbeck to establish the bona fides of the transfer of property to her were not satisfactory, we are convinced there was enough to take that question to the jury and to sustain the verdict in her favor. Although some serious questions arising upon the conduct of the trial are present in the record, we are not persuaded that we should decide them, as we conclude that the trial judge should have directed a verdict for defendant on the state of the record before us. As we have noted, the proceeds of the sale of the cattle were credited to the account of the daughter, Marion E. Holbeck, and she was not made a party, and, as we shall presently see, the title to this money could not be determined under the statute in question where there were adverse claimants to it, without such adverse claimants being before the court. Counsel for plaintiff urge that the question was not properly raised in the court below, but the seventh ground of defendant's motion for a directed verdict was as follows:
"That all of the proper parties to the fund or credits in dispute are not before the court and therefore the court has no jurisdiction to pass upon the true ownership of the fund or credits in dispute."
Upwards of a year before the trial, defendant had moved to dismiss the garnishment proceedings, basing such motion on the same ground. While this ground is tied up with other grounds, some of which are more or less obscure, we think the question was raised in the trial court of a want of necessary parties.
The garnishee defendant has no interest in the controversy between the parties. He is but a stakeholder, and the statute in question aimed to protect him. When all the parties are brought into court, he may pay the money into court and be discharged "from all liability to any party." Manifestly, this means any party to the case. Take the case in hand. The jury found, in a proceeding in which Marion E. Holbeck was not a party, that Ora Holbeck owned this money, and judgment was rendered accordingly. If the bank paid Ora this money on this judgment, would such payment bar a suit by Marion E.? Obviously not. She had not had her day in court. This statute, its predecessors and others of like purport have received consideration by this and other courts. Lyon v. Ballentine, 63 Mich. 97 (6 Am. St. Rep. 284), is directly in point. It was there held:
"It is true that, under this statute, the legislature has authorized the court in this proceeding, where it is properly commenced and the proper parties are before the court, to determine whether, under the provisions of the act, the garnishees' holding of the property shall not be held void as against the plaintiffs in the principal suit, even though it may be in good faith and valid between the garnishee defendants and the defendant in the principal suit; and to the extent that this may be done the proceeding must be governed by equitable principles, and it never can be done in this proceeding, or any other, until all persons, whether natural or artificial, who have substantial interests in the property, have been in some manner properly brought before the court."
See, also, Kennedy v. McLellan, 76 Mich. 598; Button v. Trader, 75 Mich. 295; Muncey v. Sun Insurance Office, 109 Mich. 542; Anderson v. Breitenwischer Auto Co., 244 Mich. 373; Johnson v. Thayer, 17 Me. 401; Mansfield v. Stevens, 31 Minn. 40 ( 16 N.W. 455); Guilford v. Reeves Co., 103 Ala. 301 ( 15 So. 661); 12 R. C. L. p. 858; 28 C. J. p. 376.
In Ruling Case Law it is said:
"If the answer of the garnishee shows that a third person claims the debt or some interest therein, such third person should be cited to appear, and it is error for the court to order judgment against the garnishee until the claimant is duly cited and made a party; unless this be done, the rights of such claimant cannot be barred or affected by the judgment."
And Corpus Juris says:
"Where interpleader of adverse claimants is authorized, not only is plaintiff a proper party to initiate it, but it is his duty to do so, under penalty, in case of his, plaintiff's, failure so to bring in the claimant, of seeing the garnishee discharged. But, where a disclosure of adverse claims by the garnishee is a condition precedent to the right to interplead the claimants, plaintiff cannot make the requisite disclosure where the garnishee does not. Nor, in the absence of a proper disclosure of a claim, can the garnishee force plaintiff to cite in the claimant."
We rest decision on the ground that the proper and necessary parties were not before the court, and, so resting it, we affirm the judgment.
NORTH, C.J., and FEAD, WIEST, CLARK, McDOUGALD, POTTER, and SHARPE, JJ., concurred.