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In Thomas P. Crowell, Garnishee of the Chesapeake and Delaware Canal Company v. John Randell, Jun., the Supreme Court considered a dispute between two parties over an unpaid debt owed by the Chesapeake and Delaware Canal Company to John Randell Jr. The company had been garnished in order to satisfy its debt but argued that it was exempt from such proceedings because it was a corporation created by Congress with exclusive authority over certain navigable waters within their jurisdiction. The Supreme Court disagreed with this argument and held that corporations are not immune from garnishment when they owe money on debts contracted before incorporation or after dissolution of corporate powers; thus, the court affirmed judgment for Randell against Crowell as garnishee of the canal company's assets.
In Thomas P. Crowell, Garnishee of the Chesapeake and Delaware Canal Company v. John Randell, Jr., the Supreme Court was asked to determine whether a garnishment issued against a corporation could be enforced by an individual creditor in order to satisfy his debt from that corporation. The majority opinion held that such action was not permissible under existing law; however, Justice McLean dissented on this point and argued that it should be allowed as long as there were sufficient assets available for payment of the debt owed by the corporation to its creditors. He reasoned that allowing individuals to pursue their claims through garnishment would provide them with greater protection than if they had no recourse at all when attempting to collect debts due from corporations. Furthermore, he noted that since corporations are often managed by few people who may have conflicting interests or act fraudulently towards creditors, allowing individual creditors access to corporate funds via garnishments would help protect those parties’ rights while also providing additional security for other stakeholders involved in business transactions with these entities.