Opinion
No. 29604
Decided December 22, 1943.
Judgments — Proceedings in aid of execution — Judgment on promissory note executed in Ohio by resident thereof — Judgment debtor resident of foreign state — Garnishee a foreign corporation doing business in Ohio.
A resident of Ohio, obtaining a judgment on a promissory note executed in such state against the promisor who had previously become a resident of another state, may institute proceedings in aid of execution in Ohio against a foreign corporation doing business in Ohio and amenable to summons therein, to subject wages, which may be due from it to such promisor in another state, to the payment of the judgment, where such promisor to whom the wages are due could sue the corporation therefor in Ohio.
APPEAL from the Court of Appeals of Cuyahoga county.
The plaintiff, The Ohio Loan Discount Company, an Ohio corporation of Cleveland, filed its action against Gerhard F. Siemen and John L. Murray in the Municipal Court of Cleveland on an overdue promissory note executed by them at Cleveland, with warrant of attorney to confess judgment attached, and obtained judgment by confession against them for $89.56, with interest and costs. Execution was issued and was returned unsatisfied.
Thereafter an affidavit in aid of execution was filed by, plaintiff and a garnishment order was made on the Erie Railroad Company at Cleveland, it being the employer of Siemen and Murray at all times involved herein.
Upon motion of the railroad company the garnishment order was vacated and the garnishment proceedings dismissed. Plaintiff then appealed to the. Court of Appeals from such judgment. By a divided vote that court reversed the judgment below for error of law in dismissing the garnishment proceedings, and remanded the cause.
The motion of the railroad company to require the Court of Appeals to certify its record was allowed by this court, and the case is now here for determination on its merits.
From the stipulation of facts filed in the Municipal Court it appears that the Erie Railroad Company is a New York corporation, doing business in the state of Ohio and in the state of New York; and that before plaintiff secured its cognovit judgment against Siemen and Murray they had been transferred by their employer from Cleveland to New York City, where they now reside, work and receive their salaries.
Mr. M.I. Selman, Mr. H.A. Gaynor and Mr. S.A. Levine, for appellee.
Mr. Robert M. Weh and Messrs. Bushnell, Burgess Fulton, for appellant.
The sole question for determination is whether under the facts narrated the Erie Railroad Company is amenable to garnishment proceedings in Ohio to require it to apply a part of the salaries of its employees Siemen and Murray, payable in New York, to the satisfaction of plaintiff's judgment.
The railroad company says it is not, because the attachment and garnishment statutes of Ohio do not have extraterritorial effect.
Section 1579-11, General Code, gives the Municipal Court of Cleveland jurisdiction in ancillary and supplemental proceedings before and after judgment, including attachment and aid of execution, for which authority is conferred upon the Common Pleas Court or justices of the peace.
The applicable statutes with regard to proceedings in aid of execution in the Common Pleas Court are Sections 11760 to 11788, inclusive, General Code. The corresponding proceedings in aid of execution statutes relating to the justices' courts are Sections 10436 to 10443, inclusive, General Code. In reading these statutes we find no limitation on the right of a plaintiff to resort to proceedings in aid of execution against a foreign corporation doing business in Ohio in the situation presented.
It is now established in the Federal courts and in many of the state courts that for the purposes of garnishment a debt has no fixed situs and may be reached in any jurisdiction in which the person owing it may be found and served with summons, if the person to whom the debt was due could sue his debtor therefor in that jurisdiction. Annotation in 27 A. L. R., 1396, 1399; 4 American Jurisprudence, 589, Section 66 et seq.; 38 Corpus Juris Secundum, 338, Section 125. See, also, Restatement of Conflict of Laws, 165, Section 108, and Restatement of Judgments, 145, Section 36.
Hence, it is well settled that a foreign corporation authorized to do business in a state and subject to process therein, may be garnisheed on a debt owing to a nonresident of the state, provided the corporation could be sued in such state by its creditor, on the debt sought to be garnisheed." Morris W. Haft Bros., Inc., v. Wells (C.C.A., 10), 93 F.2d 991, 995. Compare, 4 Ohio Jurisprudence, 122, Section 86 et seq.
Here, the Erie Railroad Company is operating in Ohio and may be served with summons in this state. Moreover, Siemen and Murray would have the right to sue it in Ohio on the debt, in the form of salary, sought to be garnisheed.
While some of the earlier Ohio cases support the principle that a debt, the situs of which is outside Ohio, is not subject to garnishment in Ohio (4 Ohio Jurisprudence, 123, Section 87), we think the better rule, in line with the weight of modern authority, is as stated above. Compare, Root McBride Bros. v. Davis, 51 Ohio St. 29, 36 N.E. 669, 23 L.R.A., 445.
The railroad company relies strongly on the case of Buckeye Pipe Line Co. v. Fee, 62 Ohio St. 543, 57 N.E. 446, 78 Am. St. Rep., 743. There the question was whether an Ohio court, by virtue of attachment proceedings, had such control and jurisdiction over tangible personal property of the defendant, located in Indiana and in the possession of the garnishee, as bailee, as would enable the court to make a valid order requiring the garnishee to deliver such property into the custody of the court in Ohio. This court said "No," pointing out not only that personal property when attached must be seized and taken into custody within the state to give jurisdiction over it, but that the defendant whose property was being pursued had no right of action in Ohio against the garnishee in connection with such property.
The Fee case is in harmony with the rule adopted in Restatement of Judgments, 144, Section 35, that "A court by proper service of process may acquire jurisdiction to apply to the satisfaction of a claim a chattel belonging to a person against whom the claim is asserted, in the possession or under the control of a third person, if (a) the third person is subject to the jurisdiction of the court; and (b) the chattel is within the jurisdiction of the court."
It is evident that the cases make a distinction between a debt and tangible goods. As to the latter, when they are not in the possession of the garnishee within the jurisdiction of the court out of which the attachment issues, the court has no authority over them. 38 Corpus Juris Secundum, 338, Section 124.
For the reasons stated, the judgment of the Court of Appeals is affirmed.
Judgment affirmed.
WEYGANDT, C.J., MATTHIAS, HART, BELL, WILLIAMS and TURNER, JJ., concur.