Gaddy v. First Nat. Bank

• Decision Date: 30 March 1923
• Docket Number: (No. 925.)
• Citation: 283 S.W. 277
• Parties: GADDY v. FIRST NAT. BANK OF BEAUMONT.
• Court: Texas Court of Appeals

283 S.W. 277

GADDY v. FIRST NAT. BANK OF BEAUMONT.

(No. 925.)

Court of Civil Appeals of Texas. Beaumont.

March 30, 1923.

Rehearing Denied April 28, 1926.

Appeal from Jefferson County Court; D. P. Wheat, Judge.

Suit by J. H. Gaddy against George Lee, in which the First National Bank of Beaumont was garnisheed. Judgment for garnishee in justice court was affirmed on appeal to county court, and plaintiff appeals. Affirmed.

Certified questions answered by Supreme Court (283 S. W. 472).

A. Ludlow Calhoun, of Beaumont, for appellant.

Howth & O'Fiel, Smith & Crawford, and B. F. Pye, all of Beaumont, for appellee.

O'QUINN, J.

J. H. Gaddy, appellant, filed suit in a justice court of Jefferson county against George Lee, claiming an indebtedness against him of $95.20, and recovered judgment for $57.20. Gaddy appealed to the county court at law for said Jefferson county, and in that court recovered judgment for $95.20, with interest, totaling $105.34. Pending the original suit, Gaddy secured a writ of garnishment and had same run on the First National Bank of Beaumont, garnishee herein. The bank answered, admitting that it was indebted to the said George Lee in the shape of a deposit with it of an amount of money in a sum greater than the amount sued for, including interest and all costs of suit, but further alleged that said George Lee had notified it that said money on deposit with garnishee was money received and paid to him as compensation under the Workmen's Compensation Act of the state of Texas, and that as such he claimed it was exempt and not subject to garnishment; that it had no other effects of said George Lee in its possession and did not know of any other person or persons indebted to said Lee or having in their possession any effects belonging to said Lee, and prayed that Lee be made a party to the garnishment suit. Lee answered in the garnishment suit and adopted the answer of garnishee as his answer. Judgment was rendered in the justice court that plaintiff, Gaddy, take nothing; the justice court holding that the money on deposit with garnishee was money received by George Lee as compensation for personal injuries under the Workmen's Compensation Act of the state of Texas, and therefore not subject to garnishment. Gaddy appealed from said judgment to the county court at law of Jefferson county, wherein judgment was also rendered against him and in favor of garnishee that he take nothing, for the reason that the money in the hands of the garnishee was compensation funds received under the Workmen's Compensation Act of the state of Texas, and as such was not subject to garnishment. To this judgment appellant excepted, gave notice of appeal, and has brought the case to this court for review.

The one question for determination is submitted by appellant's following proposition:

"Compensation insurance under the Workmen's Compensation Act of Texas is exempt from garnishment, attachment, judgment, and all other suits or claims, so long as same is in the hands of the insurance company or in the process of payment; but, after it comes into the hands of the party entitled thereto, it loses such exemption as a matter of law."

There is no dispute as to the facts, as is shown by the following agreement:

"Agreement as to Facts.

"It is agreed that the defendant, George Lee, was injured in an industrial accident and was entitled to compensation under the Workmen's Compensation Act of the state of Texas, some time on or about the 1st of April, 1920, in which accident he suffered the loss of an arm and other injuries, and that some time on or about the 19th of April, 1921, the defendant, George Lee, deposited or had placed to his credit in the First National Bank of Beaumont, Tex., approximately the sum of $3,000, which was received by him in settlement of the liability of the insurers on account of the injuries above described, and that the same was paid to him at the end of a case where the liability of the insurance company or carriers was contested, and that part of said sum of approximately $3,000 represented compensation payments which accrued to him between the date of the injury, some time about the 1st of April, 1920, and the date he received the check on or about April 19, 1921, and part of said check of approximately $3,000 represented compensation payments which would have accrued to him in the future; it being agreed that the injuries received by the said George Lee were of such a character as would have entitled him to compensation for total disability, or for compensation payments for a period of 401 weeks after the date of said accident some time about April 1, 1920, and that the said George Lee did not have any money in said bank prior to depositing the said sum of approximately $3,000 on or about the 19th of April, 1921, and did not add any other sums to the said sum of approximately $3,000, and that the fund of approximately $3,000 was the actual moneys paid him by way of compensation account of the injuries sustained by him and to which he was entitled to compensation under the Workmen's Compensation Act of the state of Texas.

"The Question for Decision on Appeal.

"It is agreed that the only question necessary for decision on this appeal and the decision which will settle this case is as follows: Did the trial court err in holding that the moneys on deposit in the First National Bank of Beaumont to the credit of George Lee was exempt from garnishment by reason of being compensation received by the said George Lee, under the Workmen's Compensation Act of the state of Texas?

"It is agreed that the evidence on another trial would not be different from what is agreed here.

"It is agreed that the clerk of the court shall include this agreement in the transcript with the other matters provided for in article 2113 and shall certify to the transcript as provided in article 2113, R. S."

Article 5246 — 3, Vernon's Ann. Civ. St. Supp. 1918, specially provides that all compensation allowed under and by virtue of the Workmen's Compensation Act shall be exempt from garnishment, attachment, judgment, and all other suits or claims. Appellant contends that the compensation allowed under said act is not subject to any of the processes as set out in the statute, so long as the money is in the hands of the insurance company, or is in the process of adjustment, but that, immediately upon its being received by the party entitled to receive same, it loses its exemption and becomes as any other property not specifically exempt by statute. The appellees insist that the fund, after its reception by the party entitled thereto, still retains its sacred character and remains beyond the reach of the process named.

The question involved seems to be a point of first impression, not only in Texas, but in other jurisdictions as well, as we have not been able to find where the exact question has been passed upon by any court. While the amount involved is small, the question is of much importance, and its determination might have a far-reaching effect; and, while it is not at all free from doubt, we have concluded that it should be answered in the negative — that the funds, under the law and facts, were not subject to garnishment.

Appellant bases his contention, mainly, upon the construction heretofore given our current wage law (articles 306, 3785, and 3788, R. S.), the homestead exemption law (articles 3785, 3786, and 3787), and the federal pension statute (section 4747, U. S. Rev. St. [U. S. Comp. St. § 9080]), and decisions construing same. He cites us to:

(1) Bell v. Indian Live Stock Co. (Tex. Sup.) 11 S. W. 344, 3 L. R. A. 642. This was a garnishment suit in which the garnishee answered, admitting the possession of funds belonging to the debtor, but asserting that they were for current wages for personal services and not subject to garnishment. The facts showed the money to be for accumulated monthly wages not drawn when due, but left with the employer, garnishee. The court held that, for the money to be exempt under the current wage exemption statutes, it must be at the time "current wages"; that the word "wages" was limited by the word "current," which meant present or running time; that under the law the employee's wages were exempt for the current...