Graver v. Guardian Trust Co.

This cause comes here on error proceedings from a judgment rendered in favor of the defendant in the municipal court of the city of Cleveland. It appears that the plaintiff, A.M. Graver, in a proceeding previous to the case at bar, recovered a judgment against one Raymond Bunch and William R. Parmele. After said judgment was obtained, execution was issued and returned, "No money made," and on the same day an affidavit for order in aid of execution was filed, and later returned, served on the Guardian Trust Company, the Broadway Mortgage Investment Company, the Cleveland Liberty Bank, Raymond C. Bunch, William R. Parmele, and others. The aid proceedings were referred to a referee appointed by the common pleas court.

The Cleveland Liberty Bank and the Broadway Mortgage Investment Company, through their officers, testified at the hearing. The aid proceedings sought to reach certain certificates in the hands of the Guardian Trust Company, which were claimed to be the property of the judgment debtor.

The Cleveland Liberty Bank and the Broadway Mortgage Investment Company claimed ownership of said certificates.

The referee, after a hearing, made a finding that the certificates were the property of Raymond C. Bunch and William R. Parmele, judgment debtors. The finding was approved by the court, and an order issued upon the Guardian Trust Company to turn the certificates over to the sheriff, who was ordered to sell them and apply the proceeds of sale to the satisfaction of the judgment.

Defendant, the Guardian Trust Company, refused to comply with the order. Thereupon the judgment creditor, A.M. Graver, entered suit against defendant, the Guardian Trust Company, in the municipal court of Cleveland, for damages in the amount of the judgment sought to be satisfied by said aid proceedings.

In the hearing, the officers of the Cleveland Liberty Bank and the Broadway Mortgage Investment Company testified that they owned the certificates. Testimony was offered to the effect that the certificates, which were payable to the order of William R. Parmele and Raymond C. Bunch, and indorsed in blank by them, were delivered for deposit by the Broadway Mortgage Investment Company and the Cleveland Liberty Bank to the Guardian Trust Company, which knew only them as the owners and dealt with them in the escrow as such, and knew nothing of any claim of Raymond C. Bunch or William R. Parmele to ownership.

The municipal court found in favor of the Guardian Trust Company.

Various assignments of error are set forth, chief of which is the contention of the plaintiff that by the aid proceedings above referred to the claims of ownership of the third parties to the certificates were adjudicated, and that the finding of the referee, having been approved by the common pleas court, is binding upon all parties.

The proceedings in aid were had under Section 11772, General Code. We are called upon to construe that section and determine as to the nature of the proceedings.

The case of American Insurance Union v. Read, 24 Ohio App. 192, bears upon the question, and we are of the opinion that a proceeding in aid under Section 11772, General Code, is not intended as a civil action, but merely as supplemental to and incidental to the judgment, by way of providing a summary method for the satisfaction of same.

It follows, therefore, that garnishees in an aid of execution proceeding are not parties to the proceeding and are not bound by the finding of the referee. They may refuse to comply with the order issued upon the findings of the referee, and the only remedy against them for failure to comply is a civil action, in which civil action they are entitled to their day in court and may set up such matters as will constitute a defense to the action.

In the case of Sidney S. Wilson Co. v. Cleveland Electric Ry.Co., 18 C.D., 159, 7 C.C. (N.S.), 258 (affirmed, without opinion,75 Ohio St. 593, 80 N.E. 1132), the court held:

"The order of a justice of the peace in favor of the plaintiff in a proceeding in aid of execution brought under the provisions of Rev. Stat. 6680-1 to 6680-5 (Lan. 10264 to 10268), merely operates as an assignment to him of the judgment debtor's rights; hence, in a subsequent suit against the debtor of the judgment debtor, based on such order, plaintiff must set forth not only the proceedings by virtue of which he obtained the assignment of the judgment debtor's claims, but also a statement that the defendant in the latter action, as a matter of fact, was indebted to the judgment debtor at the time of the first service in the prior proceeding."

In our opinion, therefore, there was no error committed by the trial court in permitting the Guardian Trust Company to interpose the defense that the certificates were not owned by the judgment debtor, for the reason that the proceedings in aid of execution, which were tried before a referee and approved by the court, did not amount to an adjudication of that question.

We shall omit the discussion of the various other assignments of error, for the reason that we do not consider the same as error substantially affecting the rights of the party plaintiff.

We shall now consider the only other assignment of error which in our opinion is material, namely, that the trial court erred in failing to comply with the requirements of the Code making it mandatory upon the court to state in writing the conclusions of fact separately from the conclusions of law, when the same is requested by either of the parties. This request was made on September 2, 1927. On October 15, 1927, the municipal court made the following entry: "Finding for the defendant: plaintiff excepts." On October 17, 1927, plaintiff filed his motion for a new trial, in which motion one of the grounds was as follows:

"That the trial court failed to state in writing the conclusions of fact found separately from the conclusions of law as required by the counsel for plaintiff."

On October 25, 1927, plaintiff's motion for a new trial was overruled, to which exception was duly noted. On October 26, 1927, plaintiff filed his bill of exceptions; notice thereof was duly served on counsel for defendant; no objection was filed thereto. On November 7, 1927, the bill of exceptions was duly transmitted to the judge of said court. On November 12, 1927, the bill of exceptions was duly signed and returned to the clerk of the court. On November 23, 1927, the municipal court permitted the attorney for defendant to prepare and submit to the court a journal entry purporting to be a compliance with the requests made by counsel for plaintiff on September 2, 1927, to wit, that the "court state in writing the conclusions of fact found separately from the conclusion of law," which request was made at the conclusion of the trial on that date.

It is the contention of plaintiff that, when the municipal court made the general finding for the defendant on October 15, 1927, and failed to comply with the request of counsel for plaintiff, as provided in Section 11470, General Code, which section is mandatory as a matter of law, plaintiff's motion for a new trial, setting forth non-compliance with the Code as one of the grounds, should have been granted; that the subsequent entry of November 23, 1927, is not a compliance with the Code.

The section of the Code alluded to is Section 11470, General Code, which reads as follows:

"When questions of fact are tried by the court, its finding may be general for the plaintiff, or defendant, unless, with a view of excepting to the court's decision upon questions of law involved in the trial, one of the parties so requests, in which case, the court shall state in writing the conclusions of fact found separately from the conclusions of law."

In the case of Cleveland Produce Co. v. Dennert, 104 Ohio St. 149, 135 N.E. 531, the section is construed, and the study of that case is helpful in the determination of the question before us. The syllabus reads:

"The provisions of Section 11470, General Code, confer a substantial right and are mandatory, and where questions of fact are tried by the court without the intervention of a jury, and one of the parties with a view of excepting to the court's decision upon questions of law involved in the trial requests a separate written statement of the conclusions of fact, and as an aid to the court submits special written interrogatories for such purpose, it is the duty of the court as a part of its judgment to make answer to all interrogatories involving the ultimate facts of the controversy, and to all involving probative facts from which the ultimate facts can be inferred as a matter of law, and its failure to do so is reversible error."

In the case at bar we are called upon to determine whether the journal entry premitted to be filed on November 23, 1927, wherein the court stated in writing the conclusions of fact found separately from the conclusions of law, is a compliance with the provisions of the General Code relating to that subject.

In the opinion in Produce Co. v. Dennert, supra, at page 154, 135 N.E. 532, the court said:

"We are mindful that in the case of Oxford Tp. v. Columbia,38 Ohio St. 87, the court made the following declaration, as found in the syllabus: ``Where a party requests that the court state separately the conclusions of law and fact under Civil Code, Section 280 (Rev. Stats., Section 5205), and the request is not complied with, a judgment against such party should be reversed, unless it appear from the record that he was not prejudiced by the refusal.'

"Counsel for the defendant in error stress the last few words above quoted, and insist that in the instant case plaintiff in error had not been prejudiced. It is apparent that by the use of that language the court only had in mind the language of the statute providing for new trial (Section 11576, General Code), in which it is particularly stated in the first sentence of the section that new trials shall only be granted for ``causes affecting materially his substantial rights.' The trial court should never grant a new trial, neither should a reviewing court ever reverse, unless there has been some deprivation of a substantial right. We are of the opinion, however, that Section 11470, General Code, does confer a substantial right and that a denial of that right constitutes such error as should cause this court to reverse the judgment, unless it can be determined by this court without weighing the evidence that plaintiff in error has not been prejudiced. Any other view of this section would render its provisions a dead letter."

In brief, the Supreme Court in that case held that a failure to comply with the section is a denial of a substantial right, unless it can be determined by the court without weighing the evidence that plaintiff in error has not been prejudiced. It is pointed out in the opinion that, inasmuch as the Supreme Court will not weigh the testimony to determine whether a correct judgment has been rendered, it therefore followed that plaintiff in error has been deprived of a substantial right.

It will be noted that the language of the statute is that, when "questions of fact are tried by the court, its findings may be general for the plaintiff or defendant, unless, with a view ofexcepting to the court's decision upon questions of law involvedin the trial, one of the parties so requests," etc.

This right to except to the court's decision upon questions of law is regarded by the Supreme Court as a substantial right which must be granted the party at the time the decision is made.

Holding as we do, the judgment of the municipal court will be reversed and the cause remanded for further proceedings according to law, with instructions that the trial court make its entry of judgment in compliance with the General Code, to wit:

"The court shall state in writing the conclusions of fact found separately from the conclusions of law," as here requested by counsel for plaintiff.

Judgment reversed and cause remanded.

SULLIVAN, P.J., and VICKERY, J., concur.