Court Opinion

ID: 9679097
Source: CourtListenerOpinion
Date Created: 2023-08-24 06:40:33.229296+00
Date Added: 2024-06-11T12:33:48.809373
License: Public Domain

STEAKLEY, Justice
(dissenting).
I respectfully dissent. I would uphold the trial court in granting Respondent relief from the default garnishment judgment upon the finding that Respondent established sufficient cause for hill of review relief under Rule 329b, subd. 5, Texas Rules of Civil Procedure.
The facts can be simply stated. Frank Montgomery owed a debt to Texas Machinery and Equipment Company, Incorporated, which was reduced to judgment in 1962 in the sum of $11,080. Over five years later, in 1967, Texas Machinery thought Gordon Knox Oil and Exploration Company, a corporation, owed money to Montgomery and sought to collect the Montgomery judgment by a writ of garnishment directed to Gordon Knox. But Gordon Knox owed Montgomery nothing. Its secretary-treasurer thought that ended the matter and neglected to file an answer. Texas Machinery then took a default garnishment judgment against Gordon Knox under which Gordon Knox will be required to pay the Montgomery judgment with its own funds. To avoid paying Montgomery’s debt, Gordon Knox instituted this bill of review proceeding to set aside the default garnishment judgment. The trial judge, in whose court all the proceedings occurred, granted the relief sought. The trial judge found that Joyce, who was *319served with a copy of the writ of garnishment, was in fact only a bookkeeper with no administrative authority over the affairs of Gordon Knox; that the action of Joyce in failing to inform the officers of the corporation of the writ of garnishment was caused by accident and mistake, for the reason that his investigation disclosed that the corporation was not indebted to Montgomery and because of his opinion that such rendered it unnecessary to do anything further; that neither Joyce nor the corporation was guilty of conscious indifference; and that the failure of Joyce to have an answer filed to the writ of garnishment was not intentional.
Rule 329b, subd. 5 authorizes the setting aside of a final judgment by bill of review “for sufficient cause.” We are deciding for the first time what interpretation will be given this sufficient cause requirement in a bill of review action to set aside a default garnishment judgment. The majority has announced a legalistic rule which here requires a defaulting garnishee to pay a debt he does not owe, notwithstanding the findings of the trial judge that the garnishee was not guilty of conscious indifference to the processes of court and that the failure to file an answer to the writ of garnishment was not intentional. This harsh and inequitable result has been reached by an inflexible extension to ancillary garnishment proceedings of the Hagedorn rule applicable to final judgments in adversary proceedings which settle disputes between litigating parties. See Alexander v. Hagedorn, 148 Tex. 565, 226 S.W.2d 996 (1950). The underlying principle in such circumstances is the necessity that parties in litigation know when their rights have been finally settled. But a garnishment proceeding is something else. It does not have the characteristics of a conventional lawsuit between parties in dispute. It is not a proceeding to settle a controversy, and is merely ancillary to a suit between the garnishor and his debtor as to which the garnishee is a total stranger. The writ itself is inquisitorial in nature and is not an action to vindicate a right; it is a remedy which has been characterized as summary and harsh and as bringing into court strangers to the main suit. Beggs v. Fite, 130 Tex. 46, 106 S.W.2d 1039 (1937). The garnishee is not in default in the payment of his debt, and it is not his creditor who is making the demands. He is an innocent person who is no more than a stakeholder; if he holds no “stakes,” he is particularly entitled to invoke the aid of equity against being required to answer for the debt of another. The garnishor is entitled only to reach funds or effects of his debtor in the hands of the garnishee, and no right or remedy of the garnishor can be defeated if there are none. The garnishment proceeding and any judgment entered in response to the writ of garnishment in no way affects the rights of the parties as adjudicated in the suit to which the garnishment is ancillary. Here, it is conceded that Gordon Knox had a meritorious defense to the garnishment action; it was not indebted to Montgomery, held none of his effects and had no knowledge of any other person indebted to, or holding any effects of, Montgomery. It was commented in Freeman v. Miller, 53 Tex. 372 (1880), that “The law does not seek to impose the payment of the debt due the principal debtor upon the garnishee as a penalty for his failure to make full answer * * *.” 53 Tex. at 377.
In Hanks v. Rosser, 378 S.W.2d 31 (Tex.Sup.1964), we somewhat relaxed the harshness of the Hagedorn rule. We held under circumstances there presented that the trial court may grant bill of review relief upon finding that the defaulting party has a meritorious defense, and that no injury will result to the opposite party, where the failure to file an answer was not intentional or the result of conscious indifference. We upheld trial court findings by necessary implication that the defaulting party did not intentionally fail to answer and that his failure to answer was not caused by conscious indifference. Here, the trial court findings are similarly favorable to Gordon Knox. Furthermore, Texas Machinery will not be caused to suffer injury by the *320granting of the bill of review. It was only entitled to reach funds or effects of its debtor, Montgomery, in the hands of Gordon Knox or obtain its knowledge of such in other hands. Since it is undisputed that Gordon Knox was not indebted to Montgomery, and had no knowledge of any person who was, the inquisitorial nature of the writ was satisfied and no rights of Texas Machinery can thereafter be prejudiced. It is the proper function of the equitable bill of review to afford relief to a garnishee under, the circumstances here presented, and I would sustain the action of the courts below in applying the standard of conscious indifference in determining that Gordon Knox had met the requirements of sufficient cause under Rule 329b.
Support for my views can be found in the decisions which considered the default garnishment situation prior to the enactment of the Rule 329b sufficient cause standard for a bill of review. In Kentucky Oil Corporation v. David, 285 S.W. 290 (Tex.Comm.App.1926), it is stated that “If a garnishee, through accident, mistake, or inadvertence, fails to answer one or more of the statutory inquiries, he is not without his remedy, if timely interposed.” citing Freeman v. Miller, 51 Tex. 443 (1879), and Lamb-McAshan Co. v. Ellis, 270 S.W. 547 (Tex.Comm.App.1925). This court said in the cited case of Freeman v. Miller:
“We are further of opinion, that in a case like the one now before the court, where the garnishee, without any excuse therefor shown on the record, fails to make any answer to one or more of the statutory questions, then the court is authorized to proceed as though no answer had been made, and render judgment accordingly; and that if from accident, mistake, or other cause, injustice has been done the garnishee, he himself must take the initiative, and, by motion made in due time, or other proper proceedings, seek to set aside the judgment.
“Mr. Drake says that in many of the States a judgment by default may be taken against a garnishee upon his failure to answer; that by such failure he is prima-facie guilty of negligence, and cannot obtain relief unless, by rebutting this presumption of negligence, he can induce the court to set aside the judgment and permit him to answer.
“This we think the proper practice, and one which accords with the decisions of this court in analogous cases. [Dowell v. Winters, 20 Tex. [793] 797.).” (Italics are added.)
In Lamb-McAshan v. Ellis, supra, the court clearly indicated that the enforcement of a judgment against a defaulting garnishee would be inequitable and unjust under circumstances such as those here, i. e., where the garnishee is not indebted to the judgment defendant and does not know of property by which the judgment could be paid, good reason for not making answer being shown.
I would affirm the judgments below and therefore respectfully dissent.
REAVLEY, J., joins in this dissent.