First Mississippi Nat. Bank v. KLH Industries, Inc.

• Decision Date: 03 October 1984
• Docket Number: No. 54946,54946
• Citation: 457 So.2d 1333
• Parties: FIRST MISSISSIPPI NATIONAL BANK, Appellant, v. KLH INDUSTRIES, INC., Appellee.
• Court: Mississippi Supreme Court

Page 1333

457 So.2d 1333

FIRST MISSISSIPPI NATIONAL BANK, Appellant, v. KLH INDUSTRIES, INC., Appellee.

No. 54946.

Supreme Court of Mississippi.

Oct. 3, 1984.

M. Ronald Doleac, Finch, Wicht & Doleac, Hattiesburg, for appellant.

John Land McDavid, James M. Nix, Martin R. Jelliffe, McDavid, Edmonson & Noblin, Jackson, for appellee.

EN BANC.

ROBERTSON, Justice, for the Court:

ON PETITION FOR REHEARING

I.

We today inquire generally whether the Mississippi Rules of Civil Procedure, effective January 1, 1982, regulate the procedural aspects of the form of action known as garnishment. A garnishment action is in the nature of a civil action and is certainly subject to the rule-making power of this Court and the Mississippi Rules of Civil Procedure the same as any other civil action. By operation of Rule 69(a), Miss.R.Civ.P., process supplementary to, and for the enforcement of, a judgment for the payment of money is expressly declared to be governed by heretofore existing statutes. Accordingly, by virtue of an express provision in the Rules the procedural rules whereby a party seeks to secure and enforce the remedy of garnishment are those provided by our garnishment statutes, Miss.Code Ann. Secs. 11-35-1 to -61 (1972), supplemented by so much of the Mississippi Rules of Civil Procedure as may be found not inconsistent with the procedures prescribed in such statutes.

More specifically, the instant appeal asks that we consider just how long a garnishee served with a writ of garnishment may ignore the process of the court without being stuck for the entire original judgment debt. The question is controlled by procedural aspects of our garnishment statutes. We today hold that such a garnishee, even though the subject of an otherwise valid default judgment following service of the writ of garnishment and failure to answer, may nevertheless suspend execution and enforcement of that judgment at any time before completion of the execution of enforcement process thereon. Miss.Code Ann. Sec. 11-35-31 (1972).

When all is said and done, we find that KLH Industries, Inc., the garnishee below and the Appellee here, filed its sworn declaration prior to the response of a third party upon whom execution of process by way of a supplemental garnishment had been levied. Accordingly, the trial judge correctly held KLH entitled to limit its liability to the extent of indebtedness held by it owing to the original judgment debtor, plus court costs and reasonable attorneys fees of First Mississippi National Bank, the original judgment creditor and the Appellant here. We affirm.

II.

On May 19, 1982, First Mississippi National Bank (FMNB) filed in the Circuit Court of Jefferson Davis County its suggestion for writ of garnishment against KLH Industries, Inc. (KLH).

FMNB alleged that it held an unsatisfied judgment against Cordelia Clark in the sum of $10,182.60. The judgment was said to have been entered on January 11, 1978, and to bear interest at the rate of 8% from that date.

The suggestion then charged

"that KLH Industries, Inc., a Mississippi Corporation, of Jackson, Hinds County, Mississippi, is indebted unto said Defendant [Clark] or has property of said Defendant in its possession or under its control, or knows of some other person who is so indebted, or who has effects or property of the said Defendant in his hands."

The record reflects that, on May 24, 1982, process--denominated "writ of garnishment"--was formally executed upon KLH Industries, Inc. via Kenneth G. Humer, an agent for KLH. The process advised KLH that it should answer on or before August 16, 1982. The process also advised KLH of FMNB's claim that it held a judgment against Cordelia Clark.

For reasons unknown KLH filed no answer--not within thirty days nor by August 16, 1982.

On September 1, 1982, FMNB filed a motion for default judgment against KLH. A copy of the motion was served upon KLH. This motion charged that KLH had failed to answer

"thereby rendering itself in default and making itself liable to the Plaintiff and subject to default judgment;".

On September 28, 1982, FMNB filed a request for entry of default, purportedly in accordance with Rule 55(a), Miss.R.Civ.P., accompanied by an affidavit setting forth the facts of KLH's default. Insofar as the record reflects, these papers were not served upon KLH.

On September 28, 1982, KLH's default was entered by the Circuit Clerk of Jefferson Davis County. On the following day, September 29, 1982, the Circuit Court entered judgment by default in favor of FMNB and against KLH in the amount of $9,782.60 plus interest and costs as allowed by law.

Thereafter, FMNB discovered that KLH had funds on deposit with Deposit Guaranty National Bank of Jackson (DGNB). On November 8, 1982, FMNB filed a second suggestion for writ of garnishment, this time against DGNB. FMNB there alleged that it held an unsatisfied judgment against KLH entered September 29, 1978, and that DGNB was indebted to KLH. The writ of garnishment appears to have been formally served on DGNB on November 9, 1982.

KLH's first appearance insofar as the record reflects was made on January 6, 1983, when it filed a "sworn declaration", invoking a procedure set forth in our garnishment statutes: Miss.Code Ann. Sec. 11-35-31 (1972). Significantly, DGNB as garnishee had not, prior to this point in time, either answered or paid into court the funds caught by the garnishment. In its sworn declaration, KLH acknowledged that Cordelia Clark was in its employ and stated that it had been withholding from Clark's wages the appropriate sum continuously since May 29, 1982, and that an aggregate amount of $1,110.95 had been so withheld. KLH denied that it was in any other way indebted to or in possession of the effects of Clark, thus suggesting that the execution on FMNB's judgment against KLH should be suspended with respect to all amounts in excess of the amount that KLH had withheld to date.

On January 11, 1983, FMNB responded, insisting that the judgment of September 29, 1982, had become final and that no timely motion to vacate said judgment had been filed nor had any appeal been perfected.

Following a hearing thereon, the Circuit Court on February 4, 1983, entered its order in effect suspending enforcement of so much of the judgment as required KLH to pay to FMNB an amount in excess of the sums theretofore lawfully withheld from Clark's wages, directing KLH to pay to FMNB all wages so withheld, and further directing that KLH continue to withhold from Clark's wages the maximum amount allowable by law until such time as (a) the judgment held by FMNB against Clark be satisfied or (b) Clark should leave the employment of KLH, whichever first occurred. KLH was further ordered to pay to FMNB the sum of $500 as attorneys' fees, plus court costs.

On March 21, 1983, FMNB filed a motion asking the Court to reconsider its order of February 4, 1983, and to reinstate the original judgment. On the same day the Circuit Court entered its order overruling that motion. Immediately thereafter FMNB perfected its appeal to this Court.

III.

A.

The substantive remedy of garnishment has been created by legislative enactment codified as Miss.Code Ann. Secs. 11-35-1 to -61 (1972). The procedure for enforcement of that remedy has heretofore been provided in the same code chapter. A question arises, however, whether that procedure has in any way been supplanted by the Mississippi Rules of Civil Procedure which became effective January 1, 1982.

Rule 1, Miss.R.Civ.P., provides that the Rules shall

"govern procedure in circuit courts ... in all suits of a civil nature, subject to certain limitations enumerated in Rule 81."

This garnishment action, aside from its picturesque nomenclature, has all of the appearances of a "suit of a civil nature". It has been brought in the Circuit Court of Jefferson Davis County. A careful perusal of Rule 81, Miss.R.Civ.P., discloses no express indication that garnishment proceedings are exempt from procedural regulation by the Mississippi Rules of Civil Procedure.

On the other hand, there is in Rule 81 an implied indication to that effect. Rule 81(h) relates to statutes affected by the Rules:

(h) Statutes Affected. To the extent that the statutes listed in Appendix B of these rules prescribe rules of civil practice or procedure, such statutory rules shall be supplanted by these Mississippi Rules of Civil Procedure in all courts subject to these rules in all actions not excepted by these rules.

Appendix B is entitled: "Statutes Affected." The introductory paragraph of Appendix B provides:

To the extent that the statutes listed in this Appendix prescribe rules of practice and procedure, such statutory rules shall be supplanted by the provisions of the Mississippi Rules of Civil Procedure, which shall govern any civil action authorized or contemplated thereby (see, M.R.C.P. 81).

The garnishment statutes [Section 11-35-1 et seq. of the Code] are not listed as statutes affected by the Rules. The fact that the garnishment statutes were not among those listed in Appendix B suggests that the Rules may not have altered the statutory garnishment procedure.

B.

Two other Rules are much closer to the mark. First, Rule 64, Miss.R.Civ.P., provides that "at the commencement of and during the course of an action" provisional remedies "are available under the circumstances and in the manner provided by law". The unofficial Comment to Rule 64 expressly though erroneously mentions garnishment as one of those so-called provisional remedies available. ¹

The reason Rule 64 has no application is that it refers to "provisional remedies" available "at the commencement of and during the course of an action". The action by FMNB against Cordelia Clark was commenced August 22, 1977. That action ended on January 11, 1978, with the entry of a final judgment in favor of FMNB and against Clark. This action was not a procedure employed by FMNB at the commencement of...