ACF Industries, Inc. v. Credithrift of America, Inc., 15595

• Citation: 312 S.E.2d 746,173 W.Va. 83
• Decision Date: 14 November 1983
• Docket Number: No. 15595,15595
• Court: Supreme Court of West Virginia
• Parties: , 26 Wage & Hour Cas. (BNA) 1106 ACF INDUSTRIES, INC. v. CREDITHRIFT OF AMERICA, INC., Appellee, Jackie D. Stewart, Appellant.

Page 746

312 S.E.2d 746

173 W.Va. 83, 26 Wage & Hour Cas. (BNA) 1106

ACF INDUSTRIES, INC. v. CREDITHRIFT OF AMERICA, INC., Appellee, Jackie D. Stewart, Appellant.

No. 15595.

Supreme Court of Appeals of

West Virginia.

Nov. 14, 1983.

Dissenting Opinion Feb. 21, 1984.

Syllabus by the Court

1. Both W.Va.Code, 38-8-1 (1974), dealing with the one thousand dollar personal exemption, and W.Va.Code, 38-5A-3 (1979), relating to the amount of wages subject to suggestee execution, are species of exemption statutes.

2. The general rule is that exemption statutes are liberally construed in favor of the debtor.

3. " 'Statutes which relate to the same subject matter should be read and applied together so that the Legislature's intention can be gathered from the whole of the enactments.' Syllabus Point 3, Smith v. State Workmen's Compensation Commissioner, W.Va., 219 S.E.2d 361 (1975)." Syllabus Point 1, Newton v. Dailey, W.Va., 280 S.E.2d 91 (1981).

4. W.Va.Code, 38-5A-9, permits a debtor to apply his one thousand dollar personal exemption under W.Va.Code, 38-8-1 (1974), to the net amount subject to suggestee execution under W.Va.Code, 38-5A-3 (1979).

Frankel & Kincaid, Charles M. Kincaid, Huntington, for appellant.

James St. Clair, Huntington, for appellee.

MILLER, Justice:

In this case we are asked to determine whether a debtor may claim his one thousand dollar personal exemption under W.Va.Code, 38-8-1 (1974), as against the net amount of wages that are available for suggestee execution of wages under W.Va Code, 38-5A-3 (1979). We hold that he can.

The facts of this case are not in dispute and serve to illustrate the issue. On November 10, 1980, the appellee, Credithrift of America, Inc. (hereinafter Credithrift), was awarded a judgment against the appellant, Jackie D. Stewart, and his wife in the amount of $2,517.33 plus interest and costs. Thereafter, in accordance with W.Va.Code, 38-5A-3 (1979), Credithrift caused a suggestee execution to be issued against ACF Industries, Inc., his employer.

Mr. Stewart claimed his one thousand dollar personal exemption under W.Va.Code, 38-8-1 (1974), ¹ by giving notice to ACF Industries. ACF Industries honored this claim of exemption until the total wages after deduction of all State and federal taxes paid to the appellant exceeded one thousand dollars.

Thereafter, ACF Industries began withholding a portion of Mr. Stewart's wages to the extent permitted by W.Va.Code, 38-5A-3 (1979). Mr. Stewart objected to this, contending that ACF Industries could not respond to the suggestee execution until his one thousand dollar personal exemption had been exhausted by applying it only against the net amount of wages available for suggestee execution (i.e. twenty percent or the excess over thirty times the minimum wage) under W.Va.Code, 38-5A-3 (1979). ² ACF Industries then filed this action seeking court determination of the proper amount to withhold.

The circuit court held that the one thousand dollar personal exemption applied to the full amount of salary or wages (after the deduction of all state and federal taxes) paid to the judgment debtor and not merely to the net amount subject to the suggestee execution.

The parties agree that three statutory provisions are relevant in this case, W.Va.Code, 38-5A-3 (1979), 38-8-1 (1974), and 38-5A-9. The suggestee execution statute, W.Va.Code, 38-5A-3 (1979), allows a creditor to garnish up to twenty percent of a debtor's weekly wages or the excess of thirty times the federal minimum hourly wage, whichever is less. The personal exemption found in W.Va.Code, 38-8-1 (1974), allows a debtor to exempt one thousand dollars worth of personal property from execution or other process. Finally, W.Va.Code, 38-5A-9, links these provisions by allowing a judgment debtor to claim his personal exemption as to wages "which would otherwise be subject to suggestion." ³

Before discussing these statutes, it is important to note that both W.Va.Code, 38-8-1 (1974), dealing with the one thousand dollar personal exemption, and W.Va.Code, 38-5A-3 (1979), relating to the amount of wages subject to suggestee execution, are species of exemption statutes. Such statutes have as their chief characteristic the extension to a debtor of the right to retain a portion of his property free from seizure or sale by his creditors under judicial process. 31 Am.Jur.2d Exemptions § 1 (1967); 35 C.J.S. Exemptions § 1 (1960). The general rule is that exemption statutes are liberally construed in favor of the debtor. Hickman v. Hanover, 33 F.2d 873 (4th Cir.1929); Davidson v. Hannon, 67 Conn. 312, 34 A. 1050 (1896); Dowd v. Heuson, 122 Kan. 278, 252 P. 260 (1927); Hutchinson v. Whitmore, 90 Mich. 255, 51 N.W. 451 (1892); 31 Am.Jur.2d Exemptions § 8 (1967); 35 C.J.S. Exemptions § 4(b) (1960).

In State to Use of Burt v. Allen, 48 W.Va. 154, 162-63, 35 S.E. 990, 993 (1900), this Court in referring to the 1881 version of W.Va.Code, 38-8-1, stated that the "exemption statute must be liberally construed to accomplish its object, which is for the protection and benefit of a poor debtor and his helpless family, to give them the bread of life, and a pillow whereon to lay the head, to save them from destitution and absolute want."

We agree with the circuit court that the three statutory provisions must be read in pari materia and construed collectively to determine the rights of a debtor since W.Va.Code, 38-5A-3 & 9, relate to the same subject matter, i.e. suggestee execution of wages. Furthermore, W.Va.Code, 38-5A-9, refers to the use of the personal exemption contained in W.Va.Code, 38-8-1 (1974). Thus, they meet the test of Syllabus Point 1 of Newton v. Dailey, W.Va., 280 S.E.2d 91 (1981):

" 'Statutes which relate to the same subject matter should be read and applied together so that the Legislature's intention can be gathered from the whole of the enactments.' Syllabus Point 3, Smith v. State Workmen's Compensation Commissioner, W.Va., 219 S.E.2d 361 (1975)."

When the three statutes are read together, it is apparent that the one thousand dollar exemption under W.Va.Code, 38-8-1 (1974), only applies to the net amount of wages subject to suggestee execution since this is the amount that "would otherwise be subject to suggestion." W.Va.Code, 38-5A-9. This statute permits a judgment debtor to utilize his personal exemption by referring to W.Va.Code, 38-8-1 (1974). Of greater significance is that this statute ties the personal exemption to "money [which] is due or to become due which would otherwise be subject to suggestion under this article." (Emphasis added) It is clear that under W.Va.Code, 38-5A-3 (1979), the only amount of wages subject to suggestion is twenty percent or the excess over thirty times the minimum wage, whichever is less. Thus, this is the amount that is "otherwise subject to suggestion" under W.Va.Code, 38-5A-9 (1979), and is the amount to which the one thousand dollar exemption under W.Va.Code, 38-8-1 (1974), applies.

To read these provisions otherwise would result in the absurd conclusion that the legislature intended to have both exemptions apply to the same fund of money. The suggestee execution statute, W.Va.Code, 38-5A-3 (1979), exempts roughly eighty percent of the debtor's wages from execution. The debtor, therefore, has no need to use his one thousand dollar personal exemption to protect this portion of his wages. It is only the twenty percent which is subject to suggestee execution that calls into play the personal exemption under W.Va.Code, 38-8-1 (1974). We think it is clear that the legislature intended this result by giving the separate personal exemption right in the suggestee execution statute, W.Va.Code, 38-5A-9, and by making the personal exemption applicable only to the amount "which would otherwise be subject to suggestion under this article." W.Va.Code, 38-5A-9.

There appears to be little direct authority in this area. A similar result was reached in Walker v. Williams & Bouler Constr. Co., 46 Ala.App. 337, 340, 241 So.2d 896, 899 (1970), where the court answered the following question in the affirmative: Could the appellant "after getting the benefit of the 75 percent exemption of wages ... also claim the remaining 25 percent under the one thousand dollar personal property exemption." Cf. Holley v. Crow, 355 So.2d 1123 (Ala.Civ.App.1978).

For the foregoing reasons, we conclude that W.Va.Code, 38-5A-9, permits a debtor to apply his one thousand dollar personal exemption under W.Va.Code, 38-8-1 (1974), to the net amount subject to suggestee execution under W.Va.Code, 38-5A-3 (1979). Consequently, we reverse the decision of the circuit court and remand the case for further proceedings consistent with this opinion.

Reversed and Remanded.

NEELY, Justice, dissenting:

The prospect of requiring impecunious debtors to satisfy their obligations from their wages is not a pleasant one. Individuals who are unable to pay debts are probably not making large salaries, and garnishing a portion of their pay may make their economic situation still more bleak. Courts cannot be insensitive to such human considerations, but courts must recognize that their primary responsibility is to enforce the law. Because I believe today's decision is not in accord with the law laid down by the legislature of this state, I must dissent.

W.Va.Code 38-8-1 [1974] allows a debtor to exempt one thousand dollars of personal property from any form of levy by a creditor. W.Va.Code 38-5A-3 [1979] limits the right of creditors to satisfy a debtor's obligation to them through suggestee execution. It states that a creditor cannot use suggestee execution against more than twenty percent of the net paycheck or the excess of thirty times the federal minimum hourly wage of a debtor, whichever is less. Finally, W.Va.Code 38-5A-9 [1939] allows a debtor to treat money due to him as personal property for the purposes of taking personal exemptions under W.Va.Code 38-8-1 [1974].

The...