Law Credit Co. v. Merchants National Trust & Savings Bank

CRAIL, J. This appeal is from a judgment holding that certain moneys were not subject to garnishment. The writ of [719]garnishment was issued in behalf of the Hammond Lumber Company, which is the appellant in this action. The Ripley Improvement Company, hereinafter called Ripley, was the principal debtor. The writ was served on the Merchants National Trust and Savings Bank, as garnishee. That bank, together with the Heilman Commercial Trust and Savings Bank, the Bank of America of California, and the Bank of America National Trust and Savings Association, which latter is the respondent herein, are frequently mentioned in the record. Because of succession and unity of interest, these four banks may be considered as one entity. In order to save confusion we are adopting respondent’s suggestion that these banks be referred to as “the bank” where the context permits. The respondent says, “A single question is presented, and that is: whether the writ of garnishment at the time it was served made the garnishee liable with respect to a certain sum of money in its hands.”

The moneys sought to be reached by the garnishment were on deposit with the bank under written stipulations entered into between the parties to an action brought by Ripley against the bank to recover certain shares of corporate stock which Ripley owned and to the possession of which Ripley was entitled, but which the bank refused to deliver to Ripley. That action at the time of the garnishment was on appeal from a judgment requiring the return of the stock to Ripley. The stipulations provided in effect that the corporate stock should be liquidated and that all of the proceeds of the liquidation should be deposited with the bank in lieu of the corporate stock, and that “the said moneys be held in a special deposit carrying interest at 4% per annum to await the final determination of this action”. Respondent puts it tersely, as follows: “If the bank won, it would be the bank’s money. If Ripley won, it would be Ripley’s money.” And Ripley won. It was the clear purpose and intent of the stipulations that the money should be substituted for the corporate stock. The stipulations contained the provision that the deposit “shall be without prejudice to the parties hereto”.

The respondent contends that the garnishment created no liability on the garnishee, because at the time of the levy of the writ the money was not due to Ripley nor was it certain to become due at a subsequent time but that its payment [720]