Opinion ID: 1830760
Heading Depth: 1
Heading Rank: 11

Heading: whether the trial court erred in allowing payment of fortenberry's suppliers' claims of $24,827.66 prior to paying the claim of cpsc.

Text: ¶ 13. A chancellor's findings of fact will not be disturbed unless manifestly wrong or clearly erroneous. Denson v. George, 642 So.2d 909, 913 (Miss.1994). For questions of law, our standard of review is de novo. Harrison County v. City of Gulfport, 557 So.2d 780, 784 (Miss.1990); Cole v. National Life Ins. Co., 549 So.2d 1301, 1303 (Miss.1989). ¶ 14. CPSC asserts that the suppliers are merely unsecured, open account creditors with no greater rights than other unsecured creditors. It is the position of CPSC that the suppliers were not in contractual privity with Frio. Thus, according to CPSC, under Mississippi's statutory scheme, only Frio had lien rights against the well. On the other hand, the trustee argues that once the assignment for benefit of creditors was made, the trustee held the same status as a common law bankruptcy trustee. ¶ 15. The trustee's argument, while correct, is without merit in this instance. Fortenberry made the assignment for the benefit of creditors to the trustee on January 31, 1996. CPSC served writs of garnishment on Frio on January 27, 1996, and on Four Rivers on January 29, 1996. The trustee urges this Court to adopt the return date on the writs as the date of attachment. Miss.Code Ann. § 11-35-23(1) (Supp.1998) specifically states [a]ll property in the hands of the garnishee belonging to the defendant at the time of the service of the writ of garnishment, shall be bound by and subject to the lien.... Since the assignment came after the service of the writs, the property belonging to Fortenberry, which was held by Frio and Four Rivers, was bound by the garnishment proceeding. ¶ 16. CPSC is correct in noting that the suppliers have no lien rights against the well. See Miss.Code Ann. § 85-7-131 and 135 (Rev.1991). However, the chancellor's decision to allow the suppliers' claim was based on terms of the contract, rather than the above statutory provisions. Although the chancellor found that the funds due under the contract were of a garnishable nature, he held that only the funds belonging to Fortenberry were subject to the garnishment proceeding. ¶ 17. Under the terms of the contract, Frio was to pay Fortenberry $20,000 of the contract price for supplies and/or services provided to Fortenberry with the remaining $21,950 to be paid to Fortenberry when Fortenberry provided lien releases from the suppliers and subcontractors. The chancellor found that the effect of this provision was to assign to the suppliers payment for their materials and/or services. This finding is in harmony with our statutory scheme. Only those funds belonging to the defendant are subject to the garnishment proceeding. Miss.Code Ann. § 11-35-23 (1972). Fortenberry's right to the remainder of the contract price never arose because the lien releases had not been provided as required by the contract. The chancellor was correct in holding that CPSC was only entitled to the difference between the total amount due under the contract and the suppliers' charges. ¶ 18. CPSC also argues that the trial court erred in admitting parol evidence to vary the terms of an unambiguous contract provision. At trial, Mike Mc-Donald, Frio's manager, testified that it was the intent of the parties that the suppliers be paid before the remainder of the contract price would be paid to Fortenberry. The chancellor overruled the objection finding that the testimony went to the credibility of the witness. Regardless, we have already found that the contract provisions required the lien releases before Fortenberry became entitled to the remainder of the contract price. Assuming that it was error to admit McDonald's testimony, it was harmless at worst. This entire assignment of error is without merit.