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Henry Reinhart, Respondent, v. Empire Soap Company, Garnishee, Appellant

St. Louis Court of Appeals1888-11-27
33 Mo. App. 24

Summary

Holding. The judgment against the garnishee was reversed and the cause remanded. The trial court erred in rendering judgment where the garnishee's answer, accepted as true, stated an advance-payment arrangement and a counterclaim that would have defeated the defendant's own claim for the wages at issue.

A judgment creditor sought to garnish wages owed to the execution defendant by his employer, Empire Soap Company. The garnishee answered that it had an agreement with the defendant to pay his weekly salary in advance rather than in arrears, and that it remained a creditor of the defendant on other accounts. The trial court rendered judgment against the garnishee despite these admissions in its answer.

The appellate court reversed, holding that the garnishee's answer must be accepted as true unless challenged through proper procedure. Because the answer alleged an advance-payment arrangement and a counterclaim against the defendant, the garnishee stated a defense that would have prevented the defendant from maintaining an action against it for wages at the time of garnishment. The plaintiff could not obtain judgment based on suspicion that the advance-payment contract was fraudulent; instead, the proper course was to compel fuller disclosure and then challenge the contract's good faith through evidence.

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Key issues

  • Whether a garnishee's answer admitting an advance-wage-payment agreement supports judgment in garnishment
  • Whether a garnishee's counterclaim for indebtedness by the execution defendant defeats garnishment liability
  • Proper procedure for challenging the good faith of a wage agreement in garnishment proceedings

Procedural posture

The trial court rendered judgment against the garnishee upon its answer denying indebtedness and stating that wages were paid in advance pursuant to a prior agreement, and the garnishee appealed.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

Rombatjer, P. J.,

delivered the opinion of the court.

Judgment was rendered in the trial court against the garnishee upon its answer which denied all indebtedness to the execution defendant, and contained the following statement in answer to one of the interrogatories exhibited:

“Further answering, this garnishee says, that the said defendant, S. P. Hulbert, is now, and for a long time past has been, in the employ of this garnishee; that for the last six months past his salary has been seventy-five dollars per month, but that long before it was summoned as garnishee herein, the said defendant came to this garnishee and informed it that he was going to quit its employ unless it, the said garnishee, would make an agreement with him, the said defendant, to pay him each week his salary of $17.30, to be earned the week succeeding its payment in advance, and that this garnishee, rather than lose the said defendant’s services, made an agreement with the said defendant that it would pay the said defendant each week his salary in advance at the rate of $17.30 per week, and that since said time the said garnishee has always paid the defendant for his services in advance, and that at no time since said agreement was made, which was long before the summons herein was served upon the garnishee, has the said garnishee owed the said defendant any money, goods, property or effects, but that besides the amount above stated, defendant is indebted to this garnishee, and was so indebted long before the summons herein was served on it.”

Whether such judgment was warranted by the above admission is the only question presented for our consideration.

Revised Statutes, section 2520, provides: “Notice of garnishment shall have the effect of attaching all personal property, money, rights, credits, bonds, bills, notes, drafts, checks or other choses in action of the defendant in the garnishee’s possession or charge, or under his control at the time of the service of the garnishment, or which may come into his possession or charge, or under his control, or be owing by him, between that time and the time of his filing his answer.”

The garnishee in this case was summoned April 29, 1887, and filed its answer October 18, 1887, and did between the two dates pay to the defendant in the execution a sum largely exceeding the amount for which judgment was rendered against it. Its contention is that it was under no legal obligation to the defendant to pay the said amounts, when they were respectively paid, and hence that it never had any money of the defendant in its hands since the garnishment, and that moreover the allegation in the answer that “ besides the amount above stated, defendant is indebted to this garnishee, and was so indebted long before the summons herein was served on it,” is in itself a sufficient avoidance of any liability under the answer

Two propositions are settled, by the decisions in this state. First, that the plaintiff in the execution, in the absence of fraud, stands only in the shoes of the debtor, and his rights against the garnishee are no greater than those of the debtor. Funkhauser v. Eveland, 3 Mo. App. 602; Weil v. Tyler, 38 Mo. 545 ; McPherson v. Railroad, 66 Mo. 103. Next, that in order that an indebtedness may be liable to garnishment, it must be shown to be absolutely due as a money demand unaffected by liens or prior incumbrances, or conditions of contract. Scales v. Southern Hotel Co., 37 Mo. 520; Heege v. Fruin, 18 Mo. App. 139.

The answer of the garnishee,, until overthrown by evidence, must be taken to be true whether it be a denial or affirmation of new matter. Holton v. Railroad, 50 Mo. 151. If the answer is insufficient the plaintiff has a right to except to it, and may compel a full disclosure, even if it should be necessary, for that purpose, to attach the garnishee’s body (R. S., sec. 2532), but neither the plaintiff nor the court has a right to assume that the garnishee’s answer is untrue because not sufficiently full.

The garnishee’s answer in this case states a weekly hiring of the defendant by the garnishee, the compensation for the defendant’s services being advanced by the garnishee from week to week. If this answer be true, then there was no time between the date of the service of the summons and the date of filing the answer, when the defendant himself could have maintained an action against the garnishee.

We certainly cannot say that as a matter of law an agreement to pay wages in advance is void. If the agreement was made for the purpose of hindering the defendant’s creditors, this fact must be shown in some manner by the evidence. A judgment cannot rest on mere Suspicion of fraud. As was intimated in Fay v. Smith, 25 Ver. 610, slight circumstances might be sufficient to show that the contract was put in this form to embarrass creditors! Beyond this the garnishee’s claim showing a continuing indebtedness to it, by the defendant, on other accounts between the date of the summons and answer, is sufficient to prevent a judgment upon the answer against the garnishee, even if insufficient, if excepted to under the statute.

The plaintiff’s proper course in the premises was to compel a full disclosure of all the facts by the garnishee, and then if so advised, challenge the good faith of the contract by denial.

Judgment reversed and cause remanded.

All concur.