Walsh v. Lewis Swimming Pool Construction Co.

Smith, J., delivered the opinion of the Court. We are here concerned with the propriety of a judg ⁶¹⁰ ment of condemnation entered in favor of an attaching creditor, appellee, Lewis Swimming Pool Construction Co., Inc. (Lewis), against appellant, John P. Walsh (Walsh), as garnishee. We shall reverse the action of the trial judge. The facts will be developed in the course of the opinion; In an attachment action the test of the liability of the garnishee is whether he has funds, property or credits in his hands, the property of the debtor, for which the debtor would have the right to sue.

Peninsula Insurance v. Houser, 248 Md. 714, 717 , 238 A. 2d 95 (1968); Messall v. Suburban Trust, 244 Md. 502, 506 , 224 A. 2d 419 (1966); and Bendix Radio Corp. v. Hoy, 207 Md. 225, 229 , 114 A. 2d 45 (1955). The burden of proof is on the attaching creditor. Eastern Shore Trust Company v. Lockerman, 148 Md. 628, 634 , 129 A. 915 (1925); Lockerman v. Trust Company, 146 Md. 330, 348 , 126 A. 140 (1924); and 2 Poe, Pleading and Practice § 561 (Tiffany’s ed. 1925). To recover, Lewis must present evidence legally sufficient to prove a liability of Walsh which existed when the writ was issued or when the case was tried.

Cueva Co. v. Williams & Co., 145 Md. 526, 530 , 125 A. 849 (1924). The rights of the parties become fixed in Maryland at the time of trial and judgment. Messall v. Suburban Trust, supra, at page 507, and Nicholson v. Crook, 56 Md. 55, 57 (1881). This case was tried before the court without a jury.

Therefore, under Maryland Rule 886 a the judgment of the trial court will not be set aside on the evidence unless clearly erroneous. If there is substantial evidence to support the court’s factual conclusion, those findings must be reviewed in the light most favorable to the prevailing party below. Operations Research v. Davidson, 241 Md. 550, 556 , 217 A. 2d 375 (1966), and cases there cited. With that background of the law, we turn to the facts of this case.

Lewis is a swimming pool contractor. It entered into a contract with Politz-Dayhoff & Company for the installation of a pool at The Litzhoff Apartments at Oxon Hill in Prince George’s County. The contract ⁶¹¹ provided for delivery of a note “ [u] pon completion of the work, or upon completion to a point where further completion is precluded by action or failure to act of Politz -Dayhoff Company or other factor uncontrolled by Lewis Pools”, the note to be from Politz-Dayhoff <& Company, “endorsed by Messrs. Politz & Dayhoff and in the principal amount of $18,500.00, payable in full on or before May 15, 1967.” 1 The full contract price was $18,-500.00.

This case arises from judgment entered on a note signed by James E. Dayhoff and James C. Politz as general partners of Alpine Apartments Limited Partnership and by each individually. Judgment was entered accordingly. The note apparently was the note called for in the contract, although it was for $19,000.00 and from parties differing from those in the contract. The date of entry of the judgment does not appear, nor does it appear to be vital here.

Lewis issued two attachments on the judgment. Both attachments were laid in the hands of Walsh. The first attachment was directed to any assets of Alpine Apartments Limited Partnership. The second attachment was intended to reach any assets of Messrs.

Dayhoff and Politz in the hands of Walsh in addition to those of Alpine. Walsh was called as a witness by Lewis. He was the rental agent for the Alpine Apartments (the name apparently used after completion of the apartments). The trial j udge said: “At this hearing Walsh testified that he was asked by Dayhoff and Politz to manage the property for them, they said nothing about a corporation, he assumed he was managing for the owners, didn’t know who [the] owners were but issued checks on instructions from Dayhoff and ⁶¹² Politz, and no one other than these two authorized any disbursements.

Walsh also testified that prior to the attachment he paid upon their request a total of $4,000 by four $500 checks each to Politz and Dayhoff individually, out of the account. Walsh was told by Politz when the attachment was served on him to turn the papers over to Politz’ attorneys.” This summary by the trial judge is a correct statement of the testimony. It is his only statement relative to the evidence. He made no specific finding of facts.

After discussing the law, the trial judge said: “My conclusion is that on January 10, 1968, when the account amounted to $7,768.63, this was subject to being drawn out by either Alpine Apartments Limited Partnership or either of the general partners, individually, and was therefore subject to attachment on the judgment against the defendants.” The difficulty we here encounter is that there was evidence before the court to which no reference is made and there was no evidence of ownership of the funds by Alpine Apartments Limited Partnership. It is undisputed that the title to the apartment house was in Central Gardens, Inc. No evidence was presented of any assignment by the corporation of the rents in the form of a lease of the apartment building or otherwise. There was presented in evidence a contract entered into by Center Gardens, Inc., with Bakst Service, Inc., granting it the exclusive right to install washing machines and dryers in the building. There is no testimony reflecting upon this name which we assume to be a misnomer.

That contract was dated February 2, 1967. There was also presented in evidence copy of a contract dated December 15, 1966, signed by Walsh as agent for Central Gardens, Inc., with Hennage Creative Printers for preparation of a brochure. Also filed was the invoice for the printing of the bro ⁶¹³ chure which was addressed to Central and was dated February 27,1967. Walsh in a deposition stipulated into evidence stated that Politz and Dayhoff were the persons with whom he dealt, that he entered into a verbal contract in which he agreed to manage the Alpine Apartments, that they turned the account of Alpine Apartments over to him, that he never dealt with Alpine Apartments Limited Partnership, that he did not know for whom Politz and Dayhoff were acting when they retained him, and that he had paid an occasional $500.00 to each of these gentlemen, the funds for which came from the account known as “John P. Walsh Company Alpine Regular.” The source of the funds in the account was the rents collected from the apartment.

He said Politz and Dayhoff were the only people who could direct him to make payment. Walsh testified before the trial judge that he began management in December of 1966, that Politz and Dayhoff asked him to manage for the owners, that they did not indicate that they were or were not the owners, that he did not know the actual ownership entity when he was hired, and that prior to the attachment he did not inquire as to the actual ownership. The last statement might be deemed at variance with the contracts that were signed in the name of the corporation, but his explanation is that he was told to put the contract in the name of the corporation, that it would be responsible. Walsh claimed that after the attachment he did begin to make inquiry and that is when he contacted the organization to which he was making payments on the mortgage and