Henderson v. Northwest Airlines, Inc.Henderson v. Northwest Airlines, Inc.
Aрpeal from an order denying a motion to dismiss for lack of jurisdiction an action against defendant Glenn L. Martin Company (herein called Martin) and defendant Northwest Airlines, Inc. (herein called Northwest) as garnishee.
Plaintiff brought an action against Martin and Northwest for damаges for negligently causing decedent’s death in an airplane crash. Martin is a foreign corporation over which no jurisdiction
Based upon these disclosures, plaintiff moved for judgment against the garnishee in such sum as the court should determine. Simultaneously, the garnishee moved to dismiss the garnishment on the ground that no indebtedness to Martin had been shown. In connection with the above motions, Martin appeared specially and moved for a dismissal of the action and of all the garnishment proceedings for lack of jurisdiction. The trial court by its order found that
for the purpose of obtaining jurisdiction over Martin
the garnishee was indebted to Martin for at least the sum of $26.50 (apparently for materials furnished the garnishee which were not claimed to be defective), but denied plaintiff’s motion for judgment,
Plaintiff has moved for a dismissal of this appeal because no notice of appeal was ever served upon the garnishee, the Northwest Airlines, Inc. Subsequent to plaintiff’s motion, the garnishee appeared in this court and filed its consent to be bound by the appeal. A defect in an appeal which arises from a failure to serve the notice of appeal upon one of the parties who would be adversely affected by a reversal or a modification of the order or judgment from which the appeal is taken is cured when such party voluntarily appears in the appellate court and consents to be bound by the result. 2 Only adverse parties are essential to an appeal. 3
Pursuant to the disclosures, was any money belonging to the defendant Martin in the possession оr control of the garnishee within the meaning of the garnishment act? M. S. A. c. 571. No one shall be adjudged a garnishee, by reason of any money due to the defendant unless at the time of the service of the summons the same is due absolutely and without any contingency. § 571.43 (1). Clearly, the obligation of the garnishee to pay for materials purchased from defendant Martin was absolute and not subject to any contingency; therefore, the garnishee was then indebted to Martin unless at the time the garnishee possessed a setoff in its favor which, for garnishmеnt purposes, wiped out the indebtedness. Section 571.49, subd. 2(3), provides that the garnishee shall disclose
if he. claims any setoff or defense to any debt or liability.
The right of the garnishee
In determining when a setoff is to be allowed, we must keep in mind that the basic purpose of all garnishment proceedings, as a means of protecting creditors by securing the payment of any judgment obtained in the main action, is to attach assets in the hands of a garnishee
without in any mаnner impairing the rights of the garnishee or placing Mm thereby in a worse position than he would have been had he been sued directly by the defendant.
Wunderlich v. Merchants Nat. Bank,
In the light оf this basic concept of all garnishment, may a garnishee who, at the time of the service of the garnishment summons, was indebted absolutely to the defendant for materials purchased on a contract from the latter, set off against such, indebted-, ness an existing unadjudicаted claim for credit for materials which the garnishee returned to the defendant because they were defective? If a credit may be allowed as a setoff, is it limited to a credit for the return of materials which were purchased on the
In considering these questions, we must ascertain the scope and meaning of setoff as used in § 571.49, subd. 2(3).
"* * * ^ common law, indepеndently of statutes, a set-off of cross demands, unconnected with each other, was not allowed. A defendant could claim, by way of deduction, all just allowances or demands accruing to him, or payments made by him, in respect of the same transaction or аccount which formed the ground of the action, but could go no farther. This was remedied by the 2 Geo. II., ch. 22, sec. 13, where mutual debts were allowed to be set off against each other. 1 Chit. Plead., 569-70-71. The demand must have been in the nature of a debt, and a set-off was excluded in all actions arising
ex delicto. Id.,
571-2. The general features of the English statutes of set-off are embodied in our own. Comp. Stat., 503, § 44.” Folsom v. Carli,
Since the abolition of the distinction between actions at law and suits in equity and the abolition of the common-law forms of action (1 Dunnell, Dig. & Supp. § 94), relief theretofore afforded by way of
setoff
is allowеd as a counterclaim and by statute has been extended to include all causes of action arising
ex
contractu, whether arising under a contract entirely distinct from that upon which the plaintiff’s claim is founded and whether the damages claimed are liquidated or unliquidаted. See, Morrison v. Lovejoy & Brockway,
“(1) A cause of action arising out of the contract or transaction pleaded in the complaint as the foundation of plaintiff’s claim, or connected with the subject of the action; or
“(2) In an action arising on contract, another cause of action arising also on contract, and existing when the action was begun.” (Italics supplied.)
It follows that, had Martin brought an action directly against the garnisheе, the latter, by virtue of its right to a setoff, could have asserted as a counterclaim its right to credit for the defective materials which were returned, even though such claim for credit arose in part from contracts which were separate and distinct from the оne out of which primary indebtedness arose. A garnishee’s disclosure is conclusive against the plaintiff (§ 571.50) unless the latter successfully controverts the disclosure in the manner specified by statute (§ 571.51), namely, by filing a supplemental complaint for the raising of issues which may be tried only after plaintiff has obtained a judgment in his favor in the main action. See, Gilloley v. Sampson,
Plaintiff apparently assumes that, by reason of the peculiar dilemma in which he finds himself (in his effort, by resort to garnishment proceedings, to obtain jurisdiction over a nonresident defendant) , the court ought as a matter of equity to ignore the garnishee’s claim to а setoff, or at least hold it in suspension,
for the purpose of establishing jurisdiction,
on the theory that in the event that
We find nothing in the evidence to justify a finding that the garnishee’s claim to a setoff was one against both the defendant and the U. S. Rubber Company and therefore embraced a joint liability. The tеstimony on this phase is purely speculative.
The order of the trial court is reversed.
Reversed.
ON' Appeal prom Taxation op Costs.
On August 18, 1950, the following opinion was filed:
We find no error in the clerk’s allowance of $270 for the premium of the appeal bond as an item in the taxation of costs. M. S. A.
In the аbsence of a showing that a disbursement of $270 is excessive — as being neither reasonable nor necessary — for the premium on the appeal bond, plaintiff’s contention must be rejected.
There was also no error' in excluding the garnishee, Northwest Airlines, Inc., from the taxation of costs. A prevailing party upon an appeal is entitled to reimbursement for his disbursements necessarily paid or incurred. § 607.01. An appellant is the prevailing party if the judgment or order from which the appeal was taken is reversed or is modified. Trinity Church v. First Sрiritualist Church,
Notes
Farmers’ L. & T. Co. v. Longworth (9 Cir.)
See, M. S. A. 605.03; Kells v. Nelson-Tenney Lbr. Co.
See, Wunderlich v. Merchants Nat. Bank,
As to the possible significance
of
the term “defenses,” see Imperial Elev. Co. v. Hartford Acc. & Ind. Co.
See, Annotation, 59 L. R. A. 353, 389, 392.
See, Ide v. Harwood,