Coulters v. the Sand Man, Inc.

This case is before us on a bill of exceptions prosecuted by the J.W. Bishop Company to the decision of the superior court charging it as garnishee.

The material facts in this case up to a certain point are set forth in detail in the case of Coulters v. The Sand Man, Inc.et al., 53 R.I. 151. We deem it necessary, however, to briefly state certain of those facts together with others not before the court at that time in order that the effect of that decision upon the issue before us may more clearly appear.

The plaintiff, on October 23, 1931, attached the J.W. Bishop Company as garnishee of the defendants, The Sand Man, Inc. and Leo Minutella, in an action in assumpsit. The garnishee, within the proper time, filed an affidavit setting forth, among other things, an assignment in writing by the defendant, The Sand Man, Inc., in favor of the Colonial Finance Corporation, and certain individuals as assignees. The case was duly answered by the defendants and on April 25, 1932, it was discontinued as to the defendant Minutella and defaulted as to The Sand Man, Inc. On May 31, upon an ex parte motion by the plaintiff, decision was given for the plaintiff in the sum of $2,414.40 and costs, the garnishee was charged for that amount, and judgment was at once entered against the defendant, The Sand Man, Inc. Thereupon, the J.W. Bishop Company, on June 3, filed its motion "to vacate the judgment and the order charging the garnishee." On the same day, the Colonial Finance Corporation, without having become a party to the cause, filed a motion therein, as assignee under the aforesaid assignment, that the execution theretofore issued be recalled, that the order charging the garnishee be vacated and the garnishee discharged, and that an order be entered directing the garnishee to pay the fund in its hands to the Colonial Finance Corporation. On this same day the court ordered that the execution be stayed until further order. From this point on there was confusion due to the fact that two different proceedings were being followed at the same time.

On June 7, the J.W. Bishop Company filed an exception and notice of intention to prosecute a bill of exceptions to the decision of the court on May 31 charging it as garnishee. On July 14 the bill of exceptions, which is the only matter now before us, was filed in the superior court by the garnishee together with a transcript; and on the next day both were allowed. On the latter day, after there had been a hearing on the two motions above described, they were both denied. To the decision denying the motion of the garnishee no exception was filed. To the decision denying the motion of the Colonial Finance Corporation it duly filed an exception and notice, and later a bill of exceptions based thereon was filed by that corporation, together with a transcript. In due time they reached this court.

In this court the plaintiff filed motions to dismiss both bills of exceptions and this action resulted in the opinion hereinbefore cited, which granted the motion in the case of the Colonial Finance Corporation, because it was not a party to the suit, and denied it as against the J.W. Bishop Company, on the ground that as garnishee it was a party in the case and as such was entitled to prosecute a bill of exceptions. Without expressing any opinion on the merits of the issue raised by the J.W. Bishop Company's bill of exceptions, the court stated that, as the case was an answered one, "the entry of judgment on the day the decision was rendered was invalid."

Certain facts are beyond question. The decision of the court on May 31 was based on an ex parte proof of claim and the garnishee, the J.W. Bishop Company, was charged solely from what appeared in its affidavit, without any opportunity being given to the court though the presentation of testimony to consider the validity, meaning and scope of the assignment therein set out. Upon receiving notice that it had been charged as garnishee, the J.W. Bishop Company, as above stated, on June 3, with reasonable diligence moved in the superior court to vacate "the order charging the garnishee," and on June 7 filed its exception and notice.

The decision of the court on May 31 was qualified and not absolute. It undoubtedly had in mind the probability of further proceedings at the request of those in interest when it said: "I think I will let you charge them and if they want to come in with something else they may." This original and fundamental reservation made by the court for the benefit of a party to the suit that might consider itself aggrieved unfortunately was subsequently overlooked. The validity, meaning and scope of the assignment to the Colonial Finance Corporation and to others, as set forth in the garnishee's affidavit, has never received a judicial determination. In our opinion the rights of the parties cannot be determined without an adjudication of this material point. The claimant under the alleged assignment should have been made a party to the case and this point determined before the entry of any decision charging the garnishee. Hanaford v.Hawkins, 18 R.I. 432; Westminster Bank v. Atherton,24 R.I. 334. This being an answered case, no judgment could legally be entered before the determination of the question of the liability of the garnishee. Coulters v. The Sand Man, Inc.,53 R.I. 151, 153, supra.

The exception of the J.W. Bishop Company is sustained and the case is remitted to the superior court with directions to vacate the decision charging the garnishee, to vacate the judgment against the defendant and to stay the entry of judgment until final determination of all questions pertaining to garnishment, and for further proceedings in accordance with this opinion.