368 Pa. 199 | Pa. | 1951
Opinion by
South Texas Cotton Oil Company, one of the defendants, took this appeal (pursuant to the Act of March 5, 1925 P.L. 23 §1, 12 P.S. §672) from the order of the court below discharging its rule to quash a writ of foreign attachment. The ground or basis of the court’s decision was that the issue of title (to the proceeds of several drafts) could not be decided preliminarily on a rule to quash. Because the nature of this case is complicated and the facts are so very important we shall state them in great detail.
This is a proceeding of foreign attachment in assumpsit instituted on July 6, 1950, by Falk & Company a Pennsylvania corporation against South Texas Cotton Oil Company, a foreign corporation, in which The Farmers Deposit National Bank of Pittsburgh was summoned as garnishee. The sheriff on July 6, 1950, served the writ on the garnishee and attached the
The defendant, appearing de bene esse, filed a petition averring that the court had no jurisdiction in the case and that the purported service was invalid and of no effect because the defendant does not and did not at the time of service of the writ on the garnishee have a/ny estate belonging to it in the hands or possession of the garnishee and is not and was not at the time of the service of the writ on the garnishee the owner of the drafts or the proceeds of said drafts. Defendant also averred that on and prior to June 30, 1950, it had negotiated and sold the drafts to the First National Bank in Houston, of Houston, Texas. Defendant further asserted that any construction of any Act of Assembly which would render defendant subject to the jurisdiction of the court under the foregoing facts would render the Act unconstitutional and deprive defendant of property without due process of law contrary to Section 1 of the Fourteenth Amendment to the Federal Constitution. Defendant by its petition requested the court to quash the writ and set aside the service. The court granted a rule upon the plaintiff to show cause why the service should not be set aside and the writ quashed.
Plaintiff filed an answer alleging on belief, that the drafts were delivered to the bank as collecting agent for the defendant; that at the time of the service of the writ on the garnishee the latter had in its possession the sum of $21,091.19, which money was then the property of the defendant; and that at that time the defendant was the owner of the drafts and the proceeds therefrom. This, as we shall see, is the basic question in the case.
Defendant took the deposition Of Clarence Meadows, an Assistant Vice President of the Houston bank to support the averments of its petition, and his testi
The defendant South Texas Cotton Oil Company entered into a written agreement with plaintiff Falk & Company for the sale of flax seed. Defendant on June 27, June 29 and June 30, 1950, drew drafts upon the plaintiff payable in Philadelphia at sight to the order of the First National Bank in Houston, Texas, in amounts totaling $42,346.49. Each of these drafts was deposited by defendant in its account in the Houston bank on the day of its execution.
The Houston bank accepted the drafts as deposits of cash items and gave the defendant final, unconditional and unqualified cash credit for the sum of the drafts in its account with the bank. The defendant was entitled immediately to draw (from its account) the entire amount of this final, unconditional and unqualified cash credit. The practice of accepting drafts drawn by the defendant and giving final, unconditional and unqualified credit therefor to the defendant had been in effect for more than 25 years and was in effect on June 27 to June 30, 1950, inclusive. The Houston bank sent the drafts to the Philadelphia National Bank at Philadelphia, as items to be collected for the account of the Houston bank and not for the account of the defendant. When the drafts were presented in Philadelphia for payment, two of them were marked “paid”, but the mark was cancelled, and the Philadelphia bank sent all of them to The Farmers Deposit National Bank in Pittsburgh. The plaintiff paid the drafts at that bank and immediately after payment attached the money as the property of the defendant: ‘
Plaintiff Falk & Company claims that thé defendant South Texas Cotton. Oil Company breached its' afofe: said contract to. deliver the.-flax seed. For whatever
There was no evidence of written notice to the contrary but there was an established 25 year practice to the contrary between the Houston bank and this Oil Company.
Mr. Meadows testified clearly, positively and over and over again that his (Houston) banh purchased these drafts; that the drafts were accepted by the bank as deposits of cash items, not as deposits for collection; that he sent the drafts to Pennsylvania for the account of his banh and not for the South Texas Cotton Oil Company; that they were final credits to the account of the South Texas Cotton Oil Company which the bank did not intend to and never had changed or offset in any manner and they still stand today as credits to the account of the Oil Company; that there was a difference between the practice or course of handling checks or other items of collection deposited by the Oil Company with this bank and the practice or course of handling drafts drawn by the Oil Company both as to the entries in the account and the effect;
Meadows, repeated several times that there was a distinction between the credit given the Oil Company on the deposit, of drafts and the handling of collection items, which latter, are credited to the account of the Oil Company , only if and when collected.
The parties in this case agree that at least two questions are involved: (.1) Will foreign attachment lie.; and. (2) Can the Court.set aside a.sheriff’s service and. quash, a writ.of foreign, attachment upon the facts of. this case .and at .this stage, .of the proceedings? .
Two fundamental facts must coexist: (1) The defendant must be a non-resident or a foreign corporation; and (2) The defendant must have real or personal property within this Commonwealth when the writ of foreign attachment was served on the garnishee.
It is well settled that: “A writ of foreign attachment is an original writ. It is used to commence an action, not against a person but against a res. ‘The foundation for the writ is the non-residence of the defendant and the existence of property belonging to him within the jurisdiction’: Kennedy v. Schleindl, 290 Pa. 38, 40, 137 A. 815. If there is no res to be attached at the time of service of the writ, the proceeding is a nullity. ‘. . . but if when the writ is served the garnishee has nothing belonging or owing to the defendant, the attachment is fruitless and a nullity’: Sniderman v. Nerone, supra, 386, 7 A. (2d) at 499.” Atkins v. Canadian SKF Co., 353 Pa. 312, 314, 315, 45 A. 2d 28; Mindlin v. Saxony Spinning Co., 261 Pa. 354, 104 A. 598; Kennedy v. Schleindl, 290 Pa. 38, 137 A. 815; Raymond v. Leishman, 243 Pa. 64, 69, 89 A. 791; O’Brien v. Radford, 113 Pa. Superior Ct. 88, 171 A. 296; Edmunds v. Barascope Corp., 104 Pa. Superior Ct. 173, 158 A. 303; Falk Co. v. American Railway Express Co., 79 Pa. Superior Ct. 99.
The touchstone of this case is that the garnishee had no property of this defendant on the date of service of the writ — the drafts were purchased by the Houston
The second or next question that arises is whether, under these facts, the writ of foreign attachment can be quashed at this stage of the proceedings? The usual practice of raising and determining the question of whether the garnishee had in its possession or control any property of the defendant at the time of the attachment is in scire facias proceedings against the garnishee on answers to interrogatories or trial by jury: Rex v. Paramount Rubber Co., 110 Pa. Superior Ct. 536, 543, 168 A. 366. It does not follow, however, that this is the exclusive method or remedy. Section 1 of the Act of March 5, 1925, P.L. 23, 12 P. S. §672, supra, reads as follows: “That wherever in any proceeding at law or in equity the question of jurisdiction over the defendant or of the cause of action for which suit is brought is raised in the court of first instance, it shall be preliminarily determined by the court upon the pleadings or with depositions, as the case may require ; and the decision may ■ be appealed to the Supreme Court or the Superior Court, as in cases of final judgments.”
The applicable principles pertaining to the quashing of a writ of foreign attachment are clearly set forth in the comprehensive opinion of Mr. Chief Justice Mosohzisker in Pasquinelli v. Southern Macaroni
Standard Bank of Canada v. Allegheny Lumber Co., 77 Pa. Superior Ct. 222, is very similar in its facts to the present case. In that case Morse drew a sight draft payable to the order of the Standard Bank of Canada, the plaintiff, the drawee being the lumber company, the defendant. The bank discounted the draft and deposited the proceeds to the credit of Morse, the drawer, in his open checking account. The bank forwarded the draft to a bank in Pittsburgh for presentation and -payment. The drawee paid the draft and simultaneously began a proceeding in foreign attachment against Morse, the drawer, and served the Pittsburgh bank as garnishee. The Superior Court held that a bank which discounts a sight draft and places the proceeds to the credit of a drawer is a holder in due course for value and was the owner of the draft and its proceeds and the proceeds could not be attached as the property of the defendant. Moreover, this decision was rendered in spite of the fact that after the attachment the bank in Canada charged back to the depositor’s account in Canada the amount of the draft, although it doubted whether the bank could support such a charge against the will of its depositor after the instrument it had discounted had been paid.
This exception was reiterated by Mr. Justice Stearne in Levie v. Levie, 361 Pa. 214, 220, 64 A. 2d 792: “ While it is a well established rule that the court
Plaintiff contends, notwithstanding all the aforesaid authorities, that he is entitled to the right of trial by jury on the disputed question of fact as to the ownership of the goods involved, especially since the issue depends on oral testimony.
Plaintiff failed to produce any evidence to overcome this prima facie case or to sustain its burden of proof or to sustain the averments in its answer that the drafts and the proceeds thereof were the property of the defendant; indeed, all the evidence is. clear and undisputed to the contrary.
Where it clearly appears that the proceeding is fundamentally illegal and void or where the facts clearly “put plaintiff completely out of court, or either of the statutory props required to sustain the foreign attachment is missing”, it seems unfair and a waste of time to the Court and of time and money to the defendant and to the garnishee and totally unnecessary to require or permit further proceedings or to deny a writ to quash. In the present case the facts clearly demonstrate that the property attached was not the property of the defendant, and therefore the service of the sheriff on the garnishee should have been set aside and the writ of foreign attachment quashed. The Supreme Court has the power under the Act of May 20, 1891, P.L. 101, §2, 12 P.S. §1164, to enter such judgment, order or decree as may seem to us proper and just. We shall therefore enter the following order: The order of the court below is reversed, the rule to show cause is made absolute, the service of the writ of foreign attachment is set aside and the writ of foreign attachment is hereby quashed.
See to the same effect: Heid Bros. v. Commercial National Bank, 240 S.W. 908 (Tex. Comm. of App.) ; Provident National Bank v. Cairo Flour Co., 226 S.W. 499 (Tex. Civ. App.) ; Belle Springs Creamery Co. v. Schultz, 69 S.W. (2d) 564 (Tex. Civ. App.) ; Merchants’ Bank v. Searcy Wholesale Grocer Co., 265 S.W. 961 (Ark.) ; Vickers v. Machinery Warehouse & Sales Co., 191 Pac. 869 (Wash.) ; and Farmers’ State Bank v. Hardie Co., 230 S.W. 524
Cf. Nanty-Glo Boro v. American Surety Co., 309 Pa. 236, 163 A. 523.
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