Title: Miller v. Keeling
Citation: 185 Kan. 623, 347 P.2d 424
Docket Number: 41,504
State: Kansas
Issuer: Kansas Supreme Court
Date: December 12, 1959

185 Kan. 623 (1959)
347 P.2d 424
EDWIN P. MILLER, d/b/a MILLER CREDIT SERVICE, Appellee,
v.
A.P. KEELING, Appellant.
No. 41,504

Supreme Court of Kansas.
Opinion filed December 12, 1959.
Frank G. Spurney, of Belleville, was on the brief for the appellant.
Charles A. Walsh, of Concordia, argued the cause and was on the brief for the appellee.
*624 The opinion of the court was delivered by
PRICE, J.:
The question here involves the validity of that provision of our statute (G.S. 1949, 60-3495) which precludes garnishment of a portion of the earnings of a judgment debtor where the creditor sells, assigns, sends or delivers the account to a collecting agency for collection.
The trial court held the provision in question to be unconstitutional and void.
Defendant judgment debtor has appealed.
The facts are not in dispute.
Defendant was indebted to the Nu-Tone Products Co. on an open account. The company sold and assigned the account to plaintiff collection agency. Plaintiff brought suit on the account in the county court of Republic county and recovered a judgment against defendant in the amount of $115.29. Plaintiff then filed an affidavit for garnishment and sought to garnish defendant's wages owed to him by the Umbergers for whom defendant was then working.
Defendant filed a motion to quash the garnishment proceeding on the grounds that (1) as plaintiff was the assignee of the account sued on the remedy of garnishment was, under the provisions of G.S. 1949, 60-3495, not available to it, and that (3) defendant was married and the head of a family.
This motion to quash was sustained by the county court  whereupon plaintiff appealed to the district court.
At this point reference should be made to two of our execution and garnishment statutes.
G.S. 1949, 60-3494, pertaining to the application of property of a judgment debtor toward satisfaction of the judgment, provides, in part, that the earnings of a debtor who is a resident of this state, for his personal services at any time within three months next preceding the order, cannot be so applied when it is made to appear by the debtor's affidavit, or otherwise, that such earnings are necessary for the use of a family supported wholly or partly by his labor, except as provided in G.S. 1949, 60-3495.
G.S. 1949, 60-3495, pertaining to the exemption of personal earnings of heads of families from attachment or garnishment, provides, in material part, that ten per cent and court costs not to exceed four dollars, and no more, of the earnings of a debtor who is a resident of the state, for his personal services at any time within three months *625 next preceding the issuing of any attachment or garnishment process, may be taken and applied to the payment of his debts when it is made to appear by the debtor's affidavit, or otherwise, that the remainder of such earnings above the ten per cent and court costs not to exceed four dollars are necessary for the maintenance of a family supported wholly or partly by his labor. The section also contains this proviso:
In other words, under the conditions specified therein, 60-3494 exempts from execution and garnishment the wages of a judgment debtor, except as provided in 60-3495, which, as has been stated, specifies conditions under which a judgment creditor may have garnishment process against certain earnings of the judgment debtor, subject to the specific provisio above quoted.
In the district court it was conceded that plaintiff was a collector and a "collection agency" within the meaning of the statute; that it was the assignee of the account upon which the judgment was founded; that defendant was the head of a family, and that the sum sought to be taken in garnishment was his personal earnings currently earned and payable.
In holding that the proviso in question violates both the "equal protection of the laws" clause of the fourteenth amendment to the federal constitution and section 1 of our own bill of rights which provides that "all men are possessed of equal and inalienable natural rights, among which are life, liberty, and the pursuit of happiness," the district court stated in part:
"The motion to quash is overruled."
In harmony with this ruling, judgment was entered remanding the matter to the county court with instructions to set aside the order quashing the garnishment proceeding, and costs of the appeal were taxed to defendant.
The effect of the district court's ruling being to reinstate the garnishment proceeding notwithstanding that plaintiff collection agency was the assignee of the account upon which the judgment was founded, defendant judgment debtor has appealed.
In support of the district court's ruling the gist of plaintiff's contentions is that to single out a creditor who assigns his claim to a collection agency and thus deny the right to garnishment in the circumstances mentioned in the statute amounts to an arbitrary and unreasonable classification having no relation to the subject matter  garnishment and the collection of debts  and in this connection a number of cases are cited, among them being In re Irish, 122 Kan. 33, 250 Pac. 1056; City of Atchison v. Beckenstein, 143 Kan. 440, 54 P.2d 926, and McCulley v. City of Wichita, 151 Kan. 214, 98 P.2d 192, 127 A.L.R. 312, none of which, however, is factually analogous. (And see State, ex rel., v. Consumers Warehouse Market, 185 Kan. 363, 343 P.2d 234.)
Defendant judgment debtor, on the other hand, contends the provision in question does not impair plaintiff's contract in view of the fact the statute was in force and effect when the account sued on was first incurred and when it was assigned to plaintiff, and that the remedies for the enforcement of a contract existing when the contract is made constitute a part of its obligation. (See 12 Am. Jur., Constitutional Law, § 431, p. 67.)
He further contends that what was said and held in Losier v. Sherman, 157 Kan. 153, 138 P.2d 272 (1943), is decisive on the question here.
The Losier case was an action in which the plaintiff sought an injunction to prevent defendant from subjecting his earnings to garnishment proceedings because defendant had placed his account against plaintiff with a collection agency. The plaintiff contended (just as is contended here by defendant) that the provision of the statute in question means exactly what it says, and that a creditor who turns over his account to a collection agency may not have the *627 benefit of the act permitting garnishment of earnings. In holding that the remedy of garnishment was not available, it was said:
..............
It is quite true that in the Losier case the statute was not attacked on the grounds here urged, but we believe that what was there said and held applies with equal force to the case before us.
The statute in question was in full force and effect when the debt here was incurred and when the account evidencing it was assigned by the creditor to plaintiff collection agency. We have no question of the impairment of a preexisting contract and remedy for its enforcement. (See 12 Am. Jur., Constitutional Law, § 442, p. 84, and the annotation at 93 A.L.R. 177.) When this account was assigned both the creditor and plaintiff, the assignee, were bound to take notice of the conditions under which garnishment process could be had. Instead of taking rights away from a creditor, the statute, in reality, confers rights (of garnishment) of which he may avail himself upon observance of its terms and conditions.
We think it may not be said the statute creates an arbitrary and unreasonable classification resulting in unequal protection of the laws. In fact, under and by virtue of its very provisions, the remedy of garnishment is made available to all creditors  provided they observe its terms. The choice is theirs. The general rule is that exemption laws are to be liberally construed in favor of those intended to be benefited and favorable to the objects and purposes of the enactment *628 (22 Am. Jur., Exemptions, § 6, p. 9; Mallory v. Berry, 16 Kan. 293; Dowd v. Heuson, 122 Kan. 278, 280, 252 Pac. 260, 52 A.L.R. 823), and, with respect to the exemption of wages or earnings, it has been said that the purpose of such exemption is to protect a class of persons who are largely dependent on their wages for support, as well as their families and dependents who look to them for a living, and that such a statute should receive a liberal construction rather than one which would defeat the benevolent object aimed to be accomplished (22 Am. Jur., Exemptions, § 64, p. 56). In enacting the specific proviso in question perhaps the legislature had in mind to protect the dependents of wage earners from repeated harassment by "professional collection agencies." Be that as it may  it was within the province of the legislature to enact the proviso, and it is not invalid on either of the grounds asserted.
The result is that we believe the court erred in overruling the motion to quash the garnishment proceeding, and the judgment is therefore reversed.