Opinion
No. 34304
Decided July 6, 1955.
Appeal — Action for recovery of money — Attachment — Motion to discharge, before judgment, sustained — Statutes applicable to appeal — Sections 2715.47 and 2715.48. Revised Code — Garnishment levied before judgment — Judgment on merits for defendant — Order releasing garnishee stayed pending appeal — Appeal bond — Statutes applicable — Sections 2505.06, 2505.09 and 2505.14, Revised Code.
1. Sections 2715.47 and 2715.48, Revised Code, are special statutes applying only to an appeal on questions of law by a plaintiff or plaintiffs from an order sustaining a motion to discharge an attachment, made before judgment and pursuant to Section 2715.44, Revised Code, for the reason that the attachment is based upon an order of attachment wrongfully obtained because the order is either not contemplated by the provisions of Section 2715.01, Revised Code, or, if based upon one or more of such provisions, is not supported by sufficient proof of the facts upon which it is predicated.
2. Where the plaintiff in a civil action for the recovery of money causes a garnishment to be levied, at or after its commencement but before judgment, based upon a rightfully obtained order of attachment, as so found by this court in a previous appeal, the action proceeds to a hearing upon the merits, a judgment is rendered thereon for the defendant, and the trial court, pursuant to such judgment, orders the attachment discharged and the garnishee released but contemporaneously therewith orders that such discharge and release be stayed pending the filing and disposition of any motion for a new trial or an appeal from its final judgment, subject to the plaintiff's execution of a bond, the trial court properly sets the bond under the provisions of "Chapter 2505: Procedure on Appeals," Sections 2505.06, 2505.09 and 2505.14, Revised Code, rather than under the provisions of "Chapter 2715: Attachment," Sections 2715.47 and 2715.48, Revised Code, and the Court of Appeals errs in dismissing the appeal for want of jurisdiction.
CERTIFIED by the Court of Appeals for Cuyahoga County.
The plaintiffs, nonresidents of Ohio, began this action, a shareholders derivative suit, in the Common Pleas Court of Cuyahoga County, alleging that the defendants as majority shareholders, directors and officers of the Jefferson Company, a corporation duly authorized to do business in Ohio in which plaintiffs were shareholders, had violated their fiduciary duties and obligations as such and had enriched themselves at the expense of the company to the extent of $721,631.32.
Upon the return by the sheriff of the summons issued by plaintiffs, the sheriff indicating that the defendants named in the summons could not be found, the plaintiffs, by virtue of an affidavit in attachment based on the nonresidency of the defendants, caused to be levied garnishments upon certain assets of the individual defendants which were in the hands of alleged obligors of the individual defendants, which obligors were within the jurisdiction of the Common Pleas Court.
Certain of the defendants at that time entered their appearance solely for the purpose of objecting to the garnishments and moved for their discharge on the ground that they were wrongfully obtained. Such motions were overruled by the trial court, whereupon certain of the defendants appealed from that judgment to the Court of Appeals for Cuyahoga County. That court affirmed the judgment of the trial court, without written opinion, and the same defendants appealed to this court.
This court ruled favorably to the plaintiffs, affirming the judgment of the Court of Appeals, in Rice v. Wheeling Dollar Savings Trust Co., Exr., 155 Ohio St. 391, 99 N.E.2d 301, Judge Zimmerman writing the opinion, wherein the action was found to be quasi-contractual in nature and therefore within the statute allowing attachments before judgment where the defendant is a nonresident of Ohio and the action is in contract.
Upon the subsequent trial of the issues, the Common Pleas Court found in favor of the defendants, whereupon it entered the following order with respect to its judgment discharging the garnishees:
"It is further ordered that the judgment of this court hereinbefore rendered discharging the attachments and releasing the garnishees be stayed pending the filing and disposition of any motion for a new trial and notices of appeal and that such judgment be stayed pending appeal, upon condition that any such motion for new trial and notices of appeal be filed within the times required by law therefor and that, upon filing notices of appeal, plaintiffs file a supersedeas bond to the approval of the clerk of this court in favor of defendants D.A. Burt, Jr., W.L. Burt and Martha B. Kunkel in the principal sum of $6,000 conditioned that plaintiffs shall abide and perform the order and judgment of the appellate courts and pay all moneys, costs and damages which may be required of or awarded against them upon the final determination of any such appeal."
The plaintiffs, their motion for a new trial having been overruled, complied with the above requirements and perfected an appeal on questions of law and fact to the Court of Appeals for Cuyahoga County.
The defendants filed a motion to dismiss the appeal, based essentially upon the following argument:
I. In this case the only basis of the jurisdiction of the trial court and the Court of Appeals is the res seized under the order of attachment.
II. Plaintiffs having failed to file a bond in twice the amount of the value of the attached property, pursuant to Sections 2715.47 and 2715.48, Revised Code, the attachment thereby becomes discharged and the attached property released.
III. Therefore, the Court of Appeals is without jurisdiction to consider the appeal.
The Court of Appeals found this argument to be well taken and sustained defendants' motion to dismiss the appeal.
Thereafter the Court of Appeals, upon motion of the plaintiffs, found its judgment to be in conflict with a judgment of the Court of Appeals for Montgomery County ( Shaffer v. Shaffer, 35 Ohio Law Abs., 440, 42 N.E.2d 175) and, in the entry certifying its record to the Supreme Court on that basis, stated:
"And the order of the Common Pleas Court discharging the attachments and releasing the garnishees is hereby further stayed pending review and final determination by the Supreme Court of Ohio of the cause hereby certified to it, provided plaintiffs-appellants give the bond conditioned as set forth in the stay order of this court filed December 13, 1954, and conditioned further that plaintiffs-appellants shall abide and perform the order and judgment of the Supreme Court of Ohio upon this certification and pay all moneys, costs and damages which may be required of or awarded against plaintiffs-appellants upon the review and final determination by the Supreme Court of Ohio of the cause hereby certified to it and will pay the defendants-appellees all damages sustained by them in consequence of this certification in the event that the order of attachment shall be held to have been wrongfully obtained."
The following assignment of errors was filed in this court by the appellants:
"1. The findings, judgments and orders of the Court of Appeals are contrary to law.
"2. The Court of Appeals erred:
"(a) In finding that it had acquired no jurisdiction over the attached property and was without jurisdiction to entertain the appeal of plaintiffs-appellants from the Court of Common Pleas.
"(b) In granting and not overruling the motion of defendants-appellees to dismiss the appeal of plaintiffs-appellants.
"(c) In holding that Sections 2715.47 and 2715.48, R.C., are applicable to discharges of garnishments and releases of garnishees following a hearing of the case upon its merits.
"(d) In holding that Sections 2715.47 and 2715.48, R.C., are applicable to discharges of garnishments and releases of garnishees and were applicable to the case at bar.
"3. The law of Ohio as construed by the Court of Appeals deprives plaintiffs-appellants of property without due process of law, denies them the equal protection of the laws and is repugnant to the Constitution of the United States, Fourteenth Amendment, Section 1.
"4. By the finding, orders and judgment of the Court of Appeals, the state of Ohio deprives plaintiffs-appellants of property without due process of law and denies them the equal protection of the law contrary to the Constitution of the United States, Fourteenth Amendment.
"5. Other errors manifest upon the face of the record."
Messrs. McAfee, Grossman, Taplin, Hanning, Newcomer Hazlett and Messrs. Hoppe, Day Ford, for appellants.
Messrs. Arter, Hadden, Wykoff Van Duzer, Mr. Walker H. Nye and Messrs. Paul Phillips, for appellees.
The determinative question in this appeal is whether the special statutes found in Chapter 2715, Revised Code, "Attachment," Sections 2715.47 and 2715.48, apply to the setting of a bond on an appeal from a final judgment which orders the release of attachments and garnishments as a consequence thereof, or whether the bond on an appeal from such a judgment should be set under the general statutes found in Chapter 2505, Revised Code, "Procedure on Appeals," Sections 2505.06, 2505.09 and 2505.14.
It follows that we must examine the purpose and scope of such chapters of the Revised Code in order to determine which sections prescribe the conditions for the setting of a bond upon appeal under the facts herein presented.
Sections 2715.47 and 2715.48 are found in that chapter of the Revised Code entitled "Attachment." That attachment proceedings are ancillary to a civil action for the recovery of money, at or after its commencement, is unquestioned.
Attachment is a procedure unknown to the common law, and Section 2715.01, Revised Code, provides the only grounds on which an order of attachment may legally and rightfully be obtained in Ohio.
Sections 2715.02 through 2715.10, Revised Code, provide the mechanics by which an order of attachment is obtained and an actual attachment by seizure accomplished.
Section 2715.11 states:
"When the plaintiff * * * makes oath in writing that he has good reason to believe, and does believe, that any person * * * named in the affidavit has property of the defendant in his possession, describing it, if the officer cannot get possession of such property, he must leave with such garnishees a copy of the order of attachment, with a written notice that he appear in court and answer * * *." (Emphasis added.)
It is seen that this section provides, as an alternative to physical seizure of a defendant's property, a method of obtaining control of such property which is in the hands of a third person.
Garnishment is, then, the obtaining of control by the court before judgment of property belonging to a defendant which is in the possession of any person, partnership or corporation and must, in order to be rightful and lawful, be based upon an order of attachment issued on one of the grounds for attachment provided in Section 2715.01, Revised Code.
Thus, a plaintiff in a civil action for the recovery of money, at or after its commencement and before judgment, is provided by law with two methods of bringing property belonging to the defendant under the control of the court in which the action was instituted, i.e., by actual attachment or by garnishment, either of which must be based on a valid order of attachment.
Ample provisions are made for the defendant to question the validity of the order of attachment by Section 2715.44 et seq., Revised Code.
Section 2715.44 provides:
" Before judgment * * * the defendant may move to discharge an attachment as to the whole or any of the property attached. * * *" (Emphasis added.)
Section 2715.46 provides:
"A party to a suit affected by an order discharging or refusing to discharge an order of attachment may appeal on questions of law to reverse, vacate, or modify it as in other cases: and the original action shall proceed to trial as though no appeal had been taken." (Emphasis added.)
Section 2715.47 fixes the maximum number of days within which such appeal may be filed by a plaintiff from an order discharging an attachment.
Section 2715.48 provides:
"The party who appeals under Section 2715.47 * * * must give a bond * * * in double the amount of the appraised value of the property attached, conditioned to pay * * * all damages sustained * * * in consequence of filing such appeal, in the event of the discharge of the order of attachment by the court in which it is filed because the order was wrongfully obtained." (Emphasis added.)
All the sections of this chapter must be read in pari materia as they deal with a special statutory proceeding, attachment, which is ancillary to a civil action.
It becomes apparent, then, that Section 2715.44, providing for a "motion to discharge an attachment," and the provision of Section 2715.48 for a bond in double the appraised value of the property attached in order to insure the payment of damages in the event the attachment is found to have been wrongfully obtained, both relate back to Section 2715.01, which provides the sole legal, or rightful, grounds for the obtaining of an order of attachment.
Thus, the appeal provided for by Section 2715.46 is one "on questions of law," the sole question to be determined upon such appeal being whether the order of attachment was "wrongfully obtained."
From this discussion it becomes apparent that Sections 2715.47 and 2715.48, Revised Code, are special provisions applying only to an appeal on questions of law by a plaintiff or plaintiffs from an order sustaining a motion to discharge an attachment made before judgment, pursuant to Section 2715.44, Revised Code, for the reason that it is based upon an order of attachment which was wrongfully obtained.
The appeal herein was not made from an order arising from such circumstances, and, thus, Sections 2715.47 and 2715.48, Revised Code, can have no application to the facts before us.
A motion was previously made by the defendants in this action under Section 2715.44, and this court held that the order of attachment upon which the garnishments herein are based was rightfully and lawfully obtained pursuant to one of the grounds set out in Section 2715.01, Revised Code. See Rice v. Wheeling Dollar Savings Trust Co., Exr., supra.
Sections 2715.47 and 2715.48, Revised Code, were not, of course, pertinent to that appeal since the appeal was from an order refusing to discharge, rather than an order discharging, an attachment.
It remains to be determined whether the trial court properly applied Sections 2505.06, 2505.09 and 2505.14, Revised Code, in setting the bond for the appeal in this case.
Section 2505.06 provides:
"Except as provided in Section 2505.12 of the Revised Code [the contents of which are not relevant here], no appeal shall be effective as an appeal upon questions of law and fact until the order, judgment or decree appealed from is superseded by a bond in the amount and with the conditions provided in Sections 2505.09 and 2505.14 of the Revised Code, and unless such bond is filed at the time the notice of appeal is required to be filed."
Section 2505.09 provides:
"No appeal shall operate as a stay of execution * * * until a supersedeas bond is executed by the appellant to the adverse party with sufficient surety and in such sum, not less than the amount of the judgment and interest, as is directed by the court making the order which is sought to be superseded or by the court to which the appeal is taken. Such bond shall be conditioned as provided in Section 2505.14 of the Revised Code."
Section 2505.14 provides:
"The supersedeas bond required by Section 2505.09 * * * shall be payable to the adverse party or otherwise, as may be directed by the court, when the conflicting interests of the parties require it, and subject to a condition to the effect that the party appealing shall abide and perform the order and judgment of the appellate court and pay all money, costs, and damages which may be required of or awarded against him upon the final determination of said appeal and such other conditions as the court may provide. When said judgment is for the payment of money, the bond may provide that, if said judgment is not paid upon final affirmance, judgment may be entered against the sureties on said bond."
Here, the appeal to the Court of Appeals being one on questions of law and fact, it is seen that Sections 2505.06, 2505.09 and 2505.14 must be complied with.
The record discloses that the conditions set out in these sections were included in the order of the trial court setting the bond for the plaintiff's appeal. The fixing of the amount of such supersedeas bond is within the discretion of the court setting it, and such discretion has not been challenged in this instance.
It is seen that the supersedeas bond, when so conditioned, acts as a stay of execution of the judgment or order to which it is directed.
The judgment which was stayed in this instance was specifically designated by the trial court in its entry:
"It is further ordered that the judgment of this court hereinbefore rendered discharging the attachments and releasing the garnishees be stayed* * *." (Emphasis added.)
The judgment which was rendered and which is the basis of the plaintiffs' appeal to the Court of Appeals is the judgment for the defendants on the petition itself. The judgment is based upon the ruling of the trial court sustaining the defendants' motion to dismiss the petition and the court's journalized finding that the plaintiffs had "no right or capacity to bring this action for and on behalf of the Jefferson Company," and that the plaintiffs were "not entitled to the relief prayed for."
Thus, the order which discharged the attachments and released the garnishees was an order incidental to the final judgment on the plaintiffs' petition and was not an order sustaining a motion to discharge an attachment, made before judgment and pursuant to Section 2715.44, Revised Code.
It is readily seen that the trial court, in order to maintain the status quo of the parties pending the appeal, correctly applied the provisions of Sections 2505.06, 2505.09 and 2505.14, Revised Code, and that the supersedeas bond executed by the plaintiffs operated to "stay execution of the judgment or order" (Section 2501.10, Revised Code) of the court pending the appeal.
It follows that the Court of Appeals erred in dismissing the appeal for want of jurisdiction. The judgment of the Court of Appeals is, therefore, reversed and the cause remanded thereto with instructions to consider the appeal.
Judgment reversed and cause remanded.
WEYGANDT, C.J., HART, ZIMMERMAN, STEWART, BELL and TAFT, JJ., concur.