Commonwealth of Massachusetts v. Davis

• Decision Date: 18 February 1942
• Docket Number: No. 9041.,9041.
• Citation: 160 S.W.2d 543
• Parties: COMMONWEALTH OF MASSACHUSETTS et al. v. DAVIS.
• Court: Texas Court of Appeals

Page 543

160 S.W.2d 543

COMMONWEALTH OF MASSACHUSETTS et al. v. DAVIS.

No. 9041.

Court of Civil Appeals of Texas. Austin.

February 18, 1942.

Rehearing Denied March 18, 1942.

Motion to Modify Denied April 15, 1942.

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COPYRIGHT MATERIAL OMITTED

Appeal from District Court, Caldwell County; M. C. Jeffrey, Judge.

Action by the Commonwealth of Massachusetts against Edgar B. Davis on a Massachusetts income tax judgment, wherein a writ of garnishment was served on the United North & South Development Company and the defendant filed a cross-action for damages for wrongful garnishment. From an adverse judgment, the Commonwealth of Massachusetts and sureties on the garnishment bond appeal.

Judgment affirmed in part, and in part reversed and rendered.

See, also, Tex.Civ.App., 160 S.W.2d 563.

Robert T. Bushnell, Atty. Gen., of Massachusetts, and Trueheart, McMillan & Russell, of San Antonio, for appellant Commonwealth of Massachusetts.

Richard L. Hughston and Albert B. Hall, both of Dallas, for appellant Sureties Fidelity & Deposit Co. of Maryland et al.

Fred L. Blundell and Tom Gambrell, both of Lockhart, and Brooks, Napier, Brown & Matthews, of San Antonio, for appellee.

BLAIR, Justice.

On June 23, 1937, appellant, the Commonwealth of Massachusetts, sued appellee, Edgar B. Davis, upon a Massachusetts income tax judgment, and on the same day ran a garnishment on the United North and South Development Company. On October 24, 1939, in an ancillary garnishment suit or proceeding, the trial court quashed the garnishment upon the motion of garnishee and the intervening defendant, Edgar B. Davis, because of certain alleged defects in the affidavit and garnishment bond; the answer of the garnishee having shown that Davis owned 186,751 of the 200,000 shares of the stock of the corporation. Thereafter, on October 26, 1939, the suit upon the Massachusetts income tax judgment and the cross-action of appellee for damages for wrongful garnishment went to trial, resulting on October 30, 1939, in an instructed verdict and judgment in favor of appellant Commonwealth in the amount of its Massachusetts judgment debt, $724,904.16, and a jury verdict and judgment in favor of appellee on his cross-action for damages for wrongful garnishment in the total sum of $1,550,000, the court rendering judgment, by way of offset of these amounts, against appellant Commonwealth and in favor of appellee for $825,095.84, and against each of the six sureties on the garnishment bond for the amount each had limited its liability in the bond, itself. From this judgment appellant Commonwealth and the sureties on the garnishment bond have appealed; and the appellant Commonwealth in the ancillary garnishment suit or proceeding has alone appealed from the judgment quashing the garnishment, which judgment we have this day affirmed in that suit and appeal. Also, in this appeal in the main suit appellee, by cross-assignment of error, contends that the trial court erred in not holding the Massachusetts income tax judgment void because of certain constitutional grounds urged both in the trial court and here.

The first point in this appeal relates to the sovereign immunities of appellant Commonwealth, which it alone raises, contending that neither the pleadings nor the evidence show the Commonwealth's consent to be sued either upon appellee's cross-action for damages for wrongful garnishment, or upon its pledge or contract liability therefor as contained in the garnishment bond obligation.

The general rule that a state may not be sued without its consent is not applicable here. The state itself instituted this suit, and the rule applicable is that when "a state voluntarily files a suit and submits its rights for judicial determination, it will be bound thereby, and the defense will be entitled to plead and prove all matters properly defensive. This includes the right to make any defense by answer or cross-complaint germane to the matter in controversy." Anderson, Clayton & Co. v. State, 122 Tex. 530, 62 S.W. 2d 107, 110; State v. Zanco's Heirs, 18 Tex.Civ.App. 127, 44 S.W. 527, writ denied. In support of its above quoted rule, the Supreme Court cited 25 R.C.L., § 46, p. 411, wherein the authorities supporting the rule are collated, and which hold that the rule applies when a sister state is the plaintiff in the suit. 59 C.J. 319, 320, § 476; State v. Arkansas Brick & Mfg. Co., 98 Ark. 125, 135 S.W. 843, 33 L.R.A.,N.S., 376. Some courts hold that the state, by submitting to the jurisdiction of its judicial tribunals, waives any right to plead its immunity, at least to the extent of its own claim; while others hold that the defendant may have an affirmative judgment for any amount in excess of the state's claim where the defendant's claim is incident to, connected with, arises out of, or is germane to the suit or controversy. See State v. Arkansas Brick & Mfg. Co., 98 Ark. 125, 135 S.W. 843, 33 L.R.A.,N.S., 376, 377; 25 R.C.L., § 47, p. 411, and cases there cited. Our Supreme Court adopted the latter rule in the Anderson, Clayton & Co. case.

As between private suitors, our courts have uniformly held that a claim for damages, resulting from the wrongful procuring of a writ of garnishment or attachment, is a matter "arising out of, incident to, or connected with the plaintiff's cause of action," and may be recovered by way of cross-action, plea in reconvention, or counterclaim in the suit in which such a writ is obtained. Waldman-Ross Grain Co. v. Davison & Co., Tex.Civ.App., 251 S. W. 521; Heidemann v. Martinez, Tex.Civ. App., 173 S.W. 1166; 38 Tex.Jur., § 30, pp. 347-349, and cases there cited. The state is regarded as a private individual when it enters suit and entitled to use the writ of garnishment to enforce its asserted rights, and must, in like manner as an individual, answer for any damages resulting from the wrongful procuring of the garnishment, which may be recovered by cross-complaint or action in the suit out of which the writ issued. In its answer to the ancillary garnishment proceeding, appellant Commonwealth states, "that under Texas law, your plaintiff in seeking redress in Texas courts submitted itself to jurisdiction of this court and is amenable to redress herein to the same extent as would any private individual be * * *." We agree with this statement, and in consequence of such right of the state it necessarily follows that it must be amenable to redress the wrong done to the same extent and in the same manner as would a private suitor. See Commonwealth v. Owensboro & N. Railroad Co., 81 Ky. 572, 573, and Port Royal & A. R. Co. v. State of South Carolina, C.C., 60 F. 552.

The trial court also held that appellant Commonwealth had authorized the bringing of the cross-action by appellee under both its general laws and its special law or Resolve enacted with reference to the instant case. Sec. 1 of Chap. 258, General Laws of Massachusetts, 1932, provides that "all claims at law or in equity against the commonwealth" shall be filed in certain courts; and Sec. 2 provides for trial without a jury and for venue of certain cases involving more than $2,000, and for damages resulting from injuries while traveling on the state highway.

Appellant Commonwealth contended, and we held, in the ancillary garnishment suit or proceeding, that the Governor and attorney had the authority originally to institute this suit, to secure the garnishment, and as an incidence of such authority to execute the garnishment bond as a binding obligation of the Commonwealth. The liability of appellant Commonwealth therefore arose under the law by virtue of use of legal process in a wrongful manner, which wrongful acts were done by its official in making the affidavit and executing the bond necessary to procure the writ of garnishment in the instant case, and such liability arose ex lege as well as on contract. The courts of Massachusetts have construed its general statute as authorizing suit against the Commonwealth upon actions which arise ex lege. See Murdock Parlor Grate Co. v. Commonwealth, 152 Mass. 28, 24 N.E. 854, 855, 8 L.R.A. 399, wherein the court say: "There are many obligations of the state not coming within the definitions of a contract, all of which definitions require a consent or agreement of the parties. Where a statute imposes an obligation which is enforced as if it arose ex contractu, there is not a contract, but the obligation arises ex lege. In Milford v. Com. [144 Mass. 64, 10 N.E. 516], above cited, the claim was of this class. The amended statute was intended to cover claims of this class not arising under contract, those of a breach of contract such as the subject of the suit in Wesson v. Com. [144 Mass. 60, 10 N.E. 762], contracts other than those for the payment of money, and perhaps other claims not convenient now to enumerate. This gives to the statute a full and sufficient meaning without holding, as the plaintiff urges, that a remedy in the nature of an action of tort against the commonwealth is afforded thereby for neglect or misfeasance of its officers or servants while engaged in the performance of their duties."

Some ten months after the appellant Commonwealth filed this suit and caused the writ of garnishment to be issued and served, and after the motion to quash same had been filed, the Legislature of appellant Commonwealth passed a Resolve, the material portions of which read as follows:

"Resolve Relative to Certain Litigation Now Pending in the Courts of the State of Texas.

* * *

"Whereas, two suits have been brought in the district court of Bexar County, thirty-seventh judicial district of Texas, one against said Davis and another, a garnishment proceeding, against United North and South Development Company, in an attempt to collect the aforesaid judgment, in which said suits William H. Russell, Esquire, of San Antonio, Texas, appears as attorney for the commonwealth; and "Whereas, under the law...