Court Opinion

ID: 3421602
Source: CourtListenerOpinion
Date Created: 2016-07-05 19:48:52.831846+00
Date Added: 2024-06-11T13:53:30.245571
License: Public Domain

This is an appeal by the appellant, a judgment debtor and resident householder of Indiana, from an adverse decision of the Lake Superior Court, Room 3, wherein appellant sought to enjoin appellees, justice of the peace and constable, from issuing and levying an execution upon ten per cent of the wages due appellant from his employer, pursuant to Chapter 61, Acts 1925, commonly known as the "1925 Garnishee Law."
Under the issues the validity of said Acts is presented for determination.
The title of Chapter 61 of the Acts of 1925 is: "An Act Concerning Executions and Exemptions." Section 1 of the act in substance provides that when a judgment *Page 348 
has been recovered in any court of the State of Indiana, and where the debts, earnings, salaries, wages, income from trust funds or profits are due and owing to the judgment debtor or which thereafter become due and owing to him from any individual, firm, etc., and where an execution had been previously issued on the judgment and returned unsatisfied, "the judgment creditor may file in the court in which said judgment was recovered, his affidavit stating such facts," and naming therein the individual, etc., indebted to the judgment debtor. If the court is satisfied with the facts stated in the affidavit, upon a hearing, either in term or in vacation, it shall be the duty of the court to make an order directing an execution against the debts, etc., described in the affidavit, and stating therein the name of the individual, etc., liable for the payment thereof to the judgment debtor,"notwithstanding any exemption law now in force." Provision is made for the service of the execution by either a constable or a sheriff, depending upon the court issuing it, and further provision is made for the enforcement of the execution against the garnishee residing in another jurisdiction.
Section 2 of the Act provides that the garnishee execution shall be a lien and a continuing levy upon the debts, etc., due and to become due to said judgment debtor "to the amount of not exceeding ten per cent thereof, notwithstanding any exemptionlaw now in force, and said levies shall be a continuing levy until said exemption and costs are fully satisfied and paid by the application thereto of said percentage of such debts, . . ."
Section 3 makes it the duty of any individual or firm named in the execution, indebted to the judgment debtor, to pay over to the officer serving the same, not to exceed ten per cent of such debts, etc., until the execution is *Page 349 
wholly satisfied. It is further provided that if such garnishee shall fail or refuse to pay to such officer such percentage, he shall be liable to an action therefor by the judgment creditor.
Section 4 of the Act provides that either party may apply to the court, upon notice to the other party, for a modification of such execution. The same section provides that it shall be a matter of defense to any application for the issuance of an execution (1) that there is already another execution outstanding and unsatisfied, and (2) "No execution as provided for in this act shall issue on judgments on contracts made prior to sixty days after this act takes effect."
Section 5 provides for the issuance of execution against another individual, firm, or corporation not named in the original execution, and that such execution "shall be a lien on ten per cent of any such debts, . . ." owing to the judgment debtor.
Section 6 provides that the Act shall not apply (1) to any account or judgment which has been assigned or transferred, nor (2) to claims or demands which by law are specifically exempted; and section 7 provides that the Act shall not apply to contracts of sale unless the title has passed to the purchaser.
Section 9 repeals all laws in conflict with the provisions of the Act "to the extent of such conflict."
The assignment of error and the briefs in this and kindred appeals, now under consideration, assail the validity of the Act upon several grounds, chiefly among which is that it violates sections 22 and 23 of Article I of the Bill of Rights of the Constitution of Indiana, and the "due process" and "equal protection" clauses of the Fourteenth Amendment of the Federal Constitution; and by reason thereof is unconstitutional and void. *Page 350 
Section 22, Article I, of the Bill of Rights of our State Constitution, is as follows: "The privilege of the debtor to enjoy the necessary comforts of life, shall be recognized by wholesome laws, exempting a reasonable amount of property from seizure or sale for the payment of any debt or liability hereafter contracted." Pursuant to this constitutional injunction the Legislature, in 1852, enacted an exemption law allowing a resident householder an exemption of $300.00. This act remained in force until 1879 when the Legislature made the exemption $600.00, and in 1933 the exemption was fixed at $1,000.00, not more than $700.00 to be allowed in real estate or more than $600.00 in personal property. During that period other laws have been enacted affecting exemptions.
Does Chapter 61 of the Acts of 1925 violate Section 22, Article I, of our State Constitution? Does it exempt a reasonable amount of property from seizure and sale in all cases? The court is not unmindful of the rules of construction applicable to legislative enactments, and the presumptions to be indulged in favor of the same. At the same time the rights of our citizens are to be zealously guarded and protected in their person and property as defined and prescribed, extended or limited by the provisions of our Constitution. Pursuant to said section 22, this court has held uniformly that the constitutional provision relating to exemptions, and the statutes enacted by our legislature pursuant thereto are "based upon considerations of public policy and humanity; and that it was not alone for the benefit of the debtor, but of his family also, that such laws were enacted, and the same should be liberally construed." See Pomeroy et al. v.Beach et al. (1898), 149 Ind. 511, 49 N.E. 370; The UnionNational Bank of Muncie v. Finley et al. (1913), 180 Ind. 470, 480, *Page 351
103 N.E. 110; Markley v. Murphy (1913), 180 Ind. 4, 102 N.E. 376;Kelley v. McFadden (1881), 80 Ind. 536; Astley v. Capron
(1883), 89 Ind. 167; Butner v. Bowser et al. (1885),104 Ind. 255, 3 N.E. 889; Cowan Tent No. 61 et al. v. Treesh (1927),199 Ind. 24, 29, 155 N.E. 42; Chatten v. Snider (1890),126 Ind. 387, 26 N.E. 166; Cleveland, etc., R. Co. et al. v.Marshall (1914), 182 Ind. 280, 105 N.E. 570; InternationalText-Book Co. v. Weissinger et al. (1903), 160 Ind. 349, 65 N.E. 521.
It appears from the title of Chapter 61 of the Acts of 1925 that it is intended to be an independent enactment of the Legislature and does not purport to amend former enactments 1.  upon the question of executions and exemptions. It provides that all laws in conflict with any of the provisions of the Act, are, to the extent of such conflict, repealed. As an independent act it gives a judgment creditor the right to levy upon ten per cent of all debts, earnings, salaries, wages, income from trust funds or profits of the judgment debtor, "notwithstanding any exemption law now in force." At the time of the passage of said act a resident householder was allowed $600.00 in value of property free from execution. It can not be doubted that "debts, earnings, salaries, wages, income from trust funds or profits" are property, for the purpose of the exemption laws, any item of which a resident householder has always been given the right to claim as exempt under the exemption laws of the state in force since 1852.
Section 22 made it mandatory upon the Legislature to provide by law for a reasonable exemption from debt to be allowed all resident householders. The section is not 2, 3.  self-executing. It is left to the discretion and sound judgment of the Legislature to designate the amount of exemption. This it has done. *Page 352 
The court cannot say that the Legislature acted arbitrarily, or that chapter 61, Acts 1925, is in conflict with section 22, article I, of the bill of rights.
A consideration of the 1925 act in the light of section 23, article I, of the bill of rights and the equal protection clause of the Fourteenth Amendment of the federal Constitution presents a different question.
Section 23, article I, of the bill of rights of the state Constitution provides: "The General Assembly shall not grant to any citizen, or class of citizens, privileges or immunities which, upon the same terms, shall not equally belong to all citizens." The last clause of the Fourteenth Amendment to the federal Constitution provides that no state shall "deny to any person within its jurisdiction the equal protection of the law."
If the statute in question makes the exemption apply to one citizen and not to another in like situation, it is then an arbitrary or capricious classification. The rule of equal 4.  protection of law only requires that persons similarly situated shall be treated alike, or that the law shall apply to all who are in the same class. The Fourteenth Amendment was intended to secure equality of all rights, and to render unconstitutional all laws which may be construed as applying to persons or property arbitrarily and with discrimination, unequally or unjustly. 12 C.J. 1144; State v. Barrett (1909),172 Ind. 169, 178, 87 N.E. 7; City of Elkhart v. Murray
(1905), 165 Ind. 304, 75 N.E. 593; Bedford Quarries Co. v.Bough (1907), 168 Ind. 671, 80 N.E. 529; Fountain Park Co. v.Hensler et al. (1927), 199 Ind. 95, 155 N.E. 465; Toledo, St.Louis  Western R. Co. v. Long (1907), 169 Ind. 316, 82 N.E. 757; Kelso v. Cook (1916), 184 Ind. 173, 110 N.E. 987;Selvage v. Talbott (1911), 175 Ind. 648, 95 N.E. 114;Chicago, Indianapolis  Louisville R. Co. v. Railroad Comm.,etc. *Page 353 
(1910), 173 Ind. 469, 87 N.E. 1030, 90 N.E. 1011; Sellers,Trustee, etc. v. Hayes et al. (1904), 163 Ind. 422, 72 N.E. 119; Cincinnati, Hamilton  Dayton R. Co. v. McCullom, Admr.
(1915), 183 Ind. 556, 109 N.E. 206; Sperry and Hutchinson Co.
v. State (1919), 188 Ind. 173, 122 N.E. 584.
The authorities are numerous in this state upon the subject of classification for legislative purposes. In Fountain Park Co.
v. Hensler, supra, this court had the subject of classification under consideration and said (p. 102):
"A proper classification must embrace all who naturally belong to the class — all who possess a common disability, attribute or qualification, and there must be some natural and substantial difference germane to the subject and purposes of the legislation between those within the class included and those who it leaves untouched. (Citing authorities.) The legislature cannot take what might be termed a natural class of persons, split that class in two, and then arbitrarily designate the dissevered factions of the original unit as two classes, and thereupon enact different rules for the government of each." (Citing authorities.)
The garnishee act, chapter 61, Acts 1925, deals with the general subject of exemptions and the class of persons affected thereby — specifically debtors and wage earners — and 5-7.  designates that under certain conditions ten per cent of the "debts, earnings, salaries, wages, income from trust funds or profits" of one class may be taken for debt,"notwithstanding any exemption law now in force," while another member of the same class may not be affected.
Suppose two debtors are similarly situated; each is the owner of property of the value of $600.00; one has his $600.00 in cash in his pocket or invested in goods and merchandise. It is exempt from execution on contract obligations. The other debtor lives in a rented *Page 354 
furnished apartment, and his $600.00 is on deposit in a bank or is loaned. Under the 1925 act it is not exempt. Or, both may be judgment debtors on the same contract obligation, the $600.00 owned by the first is wholly exempt, and the latter is not wholly exempt. One debtor is entitled to an exemption of one hundred per cent of his property; the other is entitled to an exemption of only ninety per cent.
Many examples could be cited illustrating the vice of the act and its conflict with section 23, article I, of our bill of rights and a denial of the equal protection clause of the Fourteenth Amendment, but the court deems it unnecessary.
Chapter 61, Acts 1925, violates section 23, article I, of the bill of rights of the Indiana Constitution as well as the equal protection clause of the Fourteenth Amendment of the Federal Constitution. It is not of universal application as to judgment debtors coming within its terms. The act only applies to certain classes and situations. It cannot be questioned that the Legislature has power to make reasonable and proper classifications of persons and property for the purpose of legislation, but such classification must not be capricious or arbitrary. The authorities cited above, and many others could be added, declare that to be valid such classification must be based on some justifiable distinction when considered in the light of the purposes and objects to be attained. The court recognizes that, for legislative purposes, it is within the province of the Legislature in the first instance to determine what classification is just and reasonable in view of the purpose to be attained. The court will not lightly substitute its judgment for that of the Legislature. A classification made by the Legislature will be sustained unless it is so manifestly and *Page 355 
unmistakably arbitrary as to leave no room upon which reasonable minds may differ.
Can the act under consideration be justified on the theory that certain debtors are entitled to favor or disfavor because of the nature of their business or employment? Public morals and the general welfare of society are not promoted by the provisions of the act. Considering the classification made in the light of the avowed purpose of the act, including the "privilege of the debtor to enjoy the necessary comforts of life," it is difficult to assume a state of facts which would afford a reasonable basis upon which a legal distinction between the classes can be made.
It is a matter of common knowledge that from the time of the enactment of chapter 61 of the Acts of 1925 to this date hundreds and thousands of our citizens have been without employment or their compensation has been so low that it has been necessary for them to ask for public aid. Chapter 61 undertakes to take from that class of our citizens ten per cent of whatever wage they may be earning and to pay it over to a judgment creditor, "notwithstanding any exemption law now in force." The act cannot be upheld upon a ground of public policy or humanity.
It is contended seriously and with much reason that the act in question violates other sections of our state Constitution, as well as the due process clause of the Fourteenth Amendment of the federal Constitution, which contention deserves serious and critical consideration. The view taken by the court, as herein expressed, makes it unnecessary to give further consideration to other alleged violations of the Constitution, federal or state.
For the reasons stated, chapter 61 of the Acts of 1925 is unconstitutional and void. The judgment is reversed *Page 356 
and the trial court is instructed to overrule appellees' demurrer to appellant's complaint.