Court Opinion

ID: 6468088
Source: CourtListenerOpinion
Date Created: 2022-06-26 14:08:23.894326+00
Date Added: 2024-06-11T09:11:12.975619
License: Public Domain

HANNA, J. (dissenting.) — Eight assignments of error, raising two questions, are presented-for our consideration by appellant’s brief. The questions are: First, can the funds in the hands of the county road board due W. J. Irwin as a balance upon his completed contract be reached by creditor’s bill in the face of our statute which provides that “No public officer shall be summoned as a garnishee in his official capacity;” and, second, can this statutory provision, if otherwise available to the road board to- avoid any liability under such creditor’s bill, bo waived by it so as to enable the plaintiff to subject such funds due Irwin to the judgment against Irwin assigned to plaintiff, and upon which this suit was based? Upon the first question thus presented, it is pointed out by appellee that'the creditor’s bill was not brought in the district court until after the contract had been completed, and the work accepted, and the balance due definitely determined and ascertained, upon the theory that those considerations of public policy which are generally asserted by many authorities as reasons why a public corporation should not be subjected to garnishment for wines due an officer in its employ, and which might be held to be broad enough to cover the case of a contractor while in the performance of his contract, would not, in the lisffit of reason and authority, after the completion of a contract and the acceptance thereof, and the ascertainment of the balance due thereunder,' prevail as just grounds of objection in an action of this kind to subject the amount of the claim or debt to the demand* of a creditor seeding a remedy by way of a. creditor’s bill, as is attempted in the present suit. The grounds of public policy which have been held to preclude the garnishment of public officers or agencies are, generally speaking, that such officers or agencies should not be subjected to serious interruptions in the prosecution of public business, and to inconvenience and delay in the prompt and efficient discharge of official duties,.and the failure in accom-niichment of important works and measures, which might result from their subjection to the process of garnishment. This rule has been applied in numerous cases as to munminal corporations, such as cities and towns, and to other public corporations, such as counties and township*, school districts, and school boards and would doubtless have application to a board such as the one here brought before the court if the principle is to be held as applicable in this jurisdiction, where the question is raised for the first time. There is great” conflict of opinion among the authorities .upon this cuestión, but I' am inclined to believe that the better reasoning sustains the contention of appellee. and find support in the following authorities. The first case I desire to refer to is that of Plummer et al. v. School District, 90 Ark. 236, 118 S. W. 1011, 134 Am. St. Rep. 28, 17 Ann. Cas. 508, where the Supreme Court of Arkansas said: “In Boone County v. Keck, 31 Ark. 387, this court held that public municipal corporations are not subject to the process of garnishment. * * * This was said in á case where the interests of a county were involved. But the rule and the reason for it are the same in the case of a school district. So that the appellants were remediless at law to have the funds in the hands of the directors applied to the payment of their debts against the contractors. * * * But as the school building has been completed and tbe purpose consummated for which the fund was raised, the public interest cannot be injuriously affected by further withholding the fund from distribution to those who are justily entitled to it.” In an earlier case the Supreme Court of Arkansas, in the case of Riggin v. Hillard, 56 Ark, 476, 20 S. W. 402, 35 Am. St. Rep. 113, held that: “A creditor’s bill may be sustained to reach money due to the defendant from a county or other municipal corporation not subject to garnishment. If the court can ascertain that no inconvenience will result to the public, it will require the defendant to assign his demand to a receiver to be collected for the benefit of the complainant.” The court, in the latter case, quoting from the opinion, further said: “But the remedies of equity are not fixed and unbending, like the legal process of garnishment; and if the court can ascertain that no inconvenience can result to the public by its interference with the corporation’s right to pay the debt directly to its debtor, there is nothing to prevent the court from doing so.” Again, as pointed out by a Missouri case, the statute in Missouri expressly prohibited the right of garnishment against a municipal corporation, but the Supreme Court of that state held that it did not protect the debt against a creditor’s suit in equity to apply it to the payment of his demand. Pendleton v. Perkins, 49 Mo. 565. It is true this Missouri case was one where the broad ground of public policy could not be held to apply because the debtor had absconded, and at the time of the action was not in any official or business relation with the municipality, and the only objection which could be urged against the right to maintain that action would be the one of inconvenience to the public officials brought about by the necessity of answering the creditor’s bill. The Supreme Court of Missouri held in favor of the right to maintain the bill in equity in this case, and subsequently distinguished the ease from the later case of Geist v. St. Louis, 156 Mo. 643, 57 S. W. 766, 79 Am. St. Rep. 545, which was a case where a judgment had been obtained against a resident of the state, who was employed in a municipal office, and after the issuance of-execution, which was returned nulla bona, an effort was made to reach the salary of the municipal officer by an action in the nature of an equitable garnishment. In the latter case the court held that no statute had been enacted providing for a proceeding of equitable garnishment as distinguished from ordinary garnishment or trustee process, and denied the right to maintain the action, declining, however, to overrule the former decision in the case of Pendleton v. Perkins. In the case cited supra, Eiggin v. Hillard, it is pointed out by the court that the complaint alleged that the debt was due upon a contract to repair a courthouse, and the Supreme Court of Arkansas said: “The courts commonly concur in holding that public policy forbids any interference between the county and its con tractor under such circumstances if the work is still in progress, for the interference would tend to retard the occupancy of the building. But here the complaint alleges that the work has been completed. There is no longer any public interest to be subserved by withholding payment from the contractor, and no reason for withholding the debt from the reach of the remedy in this sort of proceeding.” This ease I think -clearly points out the distinction which can properly be drawn between those cases which hold against the right to maintain an equitable garnishment against a public corporation and the other cases which hold in favor of such right, the distinction being that where the public service or public work can no longer be interfered with further than from the possible neessity of answering a suit or appearing in court, the objection on the ground of public policy falls, and the creditor should be permitted to maintain his action. To hold otherwise is to follow a principle which permits a debtor to hide behind the so-called public policy rule, and use this rule, which was never designed for his protection, as a means of defeating liability for his judgment debts. When a reason for a rule fails, the rule should have no application. There has been little departure from the general rule followed by most courts that the salary of .a public official is not subject to garnishment. The exemption has not been urged for the personal benefit of the officer, but for the protection of the public, and as pointed out by Judge Freeman in the note to Dickinson v. Johnson, 96 Am. St. Rep. at page 446: “We think the time has come when this question should toe re-examined in the light of modern conditions. Society has changed wonderfully .since the days when the foundation of the doctrino of exemption of salaries was laid. And if the question should be re-examined, perhaps after all it would be concluded that the public service would not suffer, but would be benefited, by holding officers to the same accounability for their debts that other people are held to.” I cannot but agrpe with this statement of the change in conditions, and that, as pointed out by Justice Mitchell in the case of Orme v. Kingsley, 73 Minn. 143, 75 N. W. 1123, 72 Am. St. Rep. 614: “It may be, and probably is, an open question whether, under existing conditions, the immunity of the salaries of public officers from legal process benefits or injures the public service.” In the case at bar, however, we are not called .upon to go to the extent of quarreling with the general rule as to the exemption of salaries, hut are only called upon to decide whether this general rule should be extended to include an exemption, as in this case, where the debtor is not in the public service, nor in the act of carrying out public work. In fact, he bears no present relation to the municipality other than that of a creditor to whom a definite and certain sum of money is due, and I cannot see how the public service will be impaired by a requirement that he should account to his judgment debtor for the amount of the debt out of the fund which is now due him from the municipality. It cannot be urged that the public service will be impaired, and can only be said that the officer may be inconvenienced by the necessity of appearing in court. This is something that the municipality might be heard to object to, but that the debtor should not be permitted to urge as any valid reason for the disallowance of the claim against him. A rule which has in recent years met with serious objections and which text-writers are commencing to denominate as unreasonable, is sought in this case to be extended beyond the legitimate reasons for its existence, viz., the public welfare, and the carrying out of public work or service without interference. The tendency would seem to be to restrict the application of this rule, but we are here asked to extend it. As pointed out by Mr. Pomeroy in his work on Equity Jurisprudence, vol. 6, § 881, after stating the general rule with his note thereupon in the following language: “If has been held that for the same reason a creditor’s bill cannot be maintained against a municipality to reach money due its employes a.nd contractors. Other cases established the more reasonable rule that if the court can ascertain that no inconvenience can result to the public in a given case, the suit may be maintained.’’ This would seem to be the more logical and correct application of not only the general rule, but such exceptions as might be carved out of it. Why the general rule of exemption should apply in those cases where the court can ascertain that no inconvenience will result to the public is beyond comprehension. Mr. Dillon in his work on Municipal Corporations, at vol. 1 (5th ed.) § 249, comments upon the general rule that municipal corporations and their officers have been considered not to be subject to garnishment, and gives as his view that, even where the question is left entirely open by statute, on principle, a municipal corporation is exempt from liability of this character with, respect to its revenues, the salaries 'of its qffieers,; and perhaps also the wages of its employes, or •payments to be made under pending contracts for public works and the like, but where it owes an ordinary debt to •a third person not in its service, the mere inconvenience •of having to answer .as garnishee furnishes no' sufficient reason for withdrawing it from the reach of the remedies which the law gives to creditors of natural persons ■•and of private corporations. The tendency, it would seem, has been away from the strict rule of exemptions of a municipal corporation and in Colorado by statute all municipal corporations are subject to garnishment. Só, .too, in this jurisdiction, at the last session of the Legislature, an act was passed to repeal a former exemption of .public officers from garnishment process. Sess. Laws N. M. 1915; c. 26. In Waples on Attachment, at page 232, is to be found an expression in favor of what might be termed the exception to the general rule of exemption of public corporations in the matter of garnishment process in: the following language: •‘The argument generally employed that such corporations and their officers might he hindered, in the discharge of their public duties if liable to be called into the quarrels of litigants to answer to what property or funds th?y have belonging to an attachment of the defendant, and that they cannot always know v, hat is due such defendant until accounts have been adjusted, may be met by the answer, that when it is apparent that a stated sum is due him, or that a distinct article of property belongs to him, it is not very hard for the public corporation or its proper officer to say so, as easy as it is- for a private corporation or its proper officer to say so under similar circumstances (not only easy, but a duty when the law requires it, and therefore no hindrance of official duty); and, in answer to the other objection that they cannot always know what is due the defendant until his accounts have been settled, it seems sufficient to say that a response to an interrogatory to that effect would work the discharge of the garnishee.” The entire controversy may be summed up in the following words taken from the note by Judge Freeman relative to contracts for public works, which is to be found in 96 Am. St. Rep. at page 448, where Judge Freeman says;- . “During the performance of a public work, funds set aside for the payment of the contractor cannot be subjected to the payment of his debts, for the completion of the contract might thereby be interfered with; but when the work is finished, there would .seem no sufficient reason, unless perhaps the inconvenience to the city of garnishment or other proceedings, to justify holding exempt any balance due the contractor.” This statement of the principle finds support in the following cases: City of Laredo v. Nalle, 65 Tex. 359; Pringle v. Guild (C. C.) 118 Fed. 655. It is true that the two cases last cited are not in point because in the Texas case there was no statute expressly providing that municipal corporations should be exempt from garnishment, and in the federal case the question of a statute authorizing the garnishment against the municipality or prohibiting the same, was not apparently before the, court, although the general rule was recognized that a municipal corporation cannot be subject to the process of garnishment. The reasoning in each case, however, is applicable to the present case, assuming that the equitable remedy by a creditor’s bill is available where there is no adequate remedy at law to accomplish the purpose sought, and I cite these eases, not as precedents, but as supporting the argument which is here urged as the basis for the exception to the general rule. In the Texas case, it w;as said that: “The policy of keeping the operations of municipal government free from the interference of lawsuits must yield to the more important policy of securing to the creditors and injured parties payment of their debts and redress for their wrongs, fo be enforced by the appropriate process of the law. It is not the policy of the law that the citizen should be wronged rather than that the city government should suf: fer inconvenience. * * * Public policv may demand that a fund set apait for erecting a public building should not be taken for the debt of the person contracting to do the work during the progress of its construction, for this may prevent its completion. But when the work is finished and the- money earned, and standing to the credit of the contractor with the city, it should he subject, like any other property, to the payment of his debts. No one should he allowed to place hjs property beyond the reach of his creditors by keeping it'in the possession of a- municipal corporation,” '* - For the reasons stated, I dissent from the majority opinion.