Kirkman v. Bird

• Decision Date: 14 May 1900
• Citation: 61 P. 338,22 Utah 100
• Court: Utah Supreme Court
• Parties: JOHN M. KIRKMAN, APPELLANT v. WILLIAM BIRD, JR., RESPONDENT, THE RIO GRANDE WESTERN RAILWAY CO., GARNISHEE AND RESPONDENT

61 P. 338

22 Utah 100

JOHN M. KIRKMAN, APPELLANT v. WILLIAM BIRD, JR., RESPONDENT, THE RIO GRANDE WESTERN RAILWAY CO., GARNISHEE AND RESPONDENT

Supreme Court of Utah

May 14, 1900

Appealed to the U. S. Supreme Court.

Appeal from the Third District Court Salt Lake County. Hon. A. N Cherry, Judge.

The facts in this case were undisputed, and the real controversy was as to the constitutionality of the exemption law of Utah section 7, page 99, Session Laws of 1899, exempting absolutely the wages of a married man for sixty days next preceding the levy of execution or garnishment. From a judgment determining the constitutionality of the exemption law, plaintiff appealed.

Affirmed.

Messrs Krebs & Hoppaugh, for appellant.

The exemption laws in force when the indebtedness herein accrued, are as follows:

Sec. 2439, Vol. 2, Compiled Laws of Utah, 1888, subdivision 7, which exempts: "One-half of the earnings of the judgment debtor for his personal services rendered at any time within sixty days next preceding the levy of execution or levy of attachment when it appears by the debtor's affidavit or otherwise that such earnings are necessary for the use of his family residing in this Territory, supported wholly or in part by his labor." And the amendment of 1896, Ch. 71, Sec. 7, which exempts "One-half of the earnings of the judgment debtor for his personal services rendered at any time within sixty days next preceding the levy of execution. Provided that in no case shall the amount exempt under this act be reduced to less than twenty-five dollars."

The present exemption law (the statute under discussion) is Chapter 66, Sec. 7, Laws of 1899:

The following property is exempt from execution except as herein otherwise especially provided:

The earnings of the judgment debtor for personal services rendered within sixty days next preceding the levy of execution by garnishment or otherwise if the judgment debtor be a married man, or with a family dependent upon him for support.

This chapter contains no express repealer.

That the court may see the full significance of this statute, we call attention to the judicial interpretation which has been given to the words, "earnings of the judgment debtor for personal services." McSkiman v. Knowlton, 14 N.Y.S. 284; Millington v. Laurer, 89 Iowa 322; Shelly v. Smith, 59 Iowa 453; Brown v. Hebard, 20 Wis. 326; McCoy v. Cornell, 40 Iowa 457; Sanford v. Goodwin, N.Y. Daily Register, March 11, 1881. (Cited in McSkiman v. Knowlton, 14 N.Y.S. 284). Miller v. Hooper, 19 Hun., (N.Y.) 394; Banks v. Rodenbach, 54 Iowa 695; Penn. Coal Co. v. Costello, 33 Penn. State, 241; Seider's Appeal, 46 Penn. State, P. 57.

The decision of the court involves necessarily, two propositions:

1st. That chapter 66, subdivision 7, should be construed to apply retrospectively, and to include contracts made prior to its passage.

2d. That when so applied it is constitutional, and does not impair the obligation of pre-existing contracts.

We believe the court is wrong upon both propositions.

1st. The enactment was not intended to be retrospective in its operation, not to be applied to contracts made prior to its passage. Shreveport v. Cole, 129 U.S. 36; Gunn v. Barry, 82 U.S. 610; Germania Sav. Bank v. Village Suspension Bridge, 54 N.E. 35; Singer Mfg. Co. v. McCollock, 24 F. 667.

2d. There is no question, however, that if the court gives to this statute a retrospective effect, the enactment violates the constitutional inhibition. It takes away all substantial remedy. It leaves a bare right which the creditor cannot enforce. It not only lessens the value of the contract, it utterly destroys its value.

The obligation of a contract is the power of its enforcement. The forms of its remedy may be changed at the will of the legislature, but when the change obstructs, delays, or lessens the compelling power theretofore existing, it impairs the obligation of the contract. It is immaterial how this is done, or in what particular the change affects the contract, if it takes away from the creditor his ability to collect, it impairs the obligation. Sturges v. Crowninshield, 4 Wheat. 118; Green v. Biddle, 8 Wheat. 1; Bronson v. Kinsey, 1 How. 310; McCracken v. Hayward, 2 How. 606; Gantly v. Ewing, 3 How. 706; Planter's Bank v. Sharp, 6 How. 327; Howard v. Bugbee, 24 How.; Curran v. Arkansas, 56 U.S. 304; 4 Wall, 535, United States v. Muscatine, 75 U.S. 575; Gunn v. Barry, 82 U.S. 610; Walker v. Whitehead, 83 U.S. 314; Rees v. Waterton, 19 Wall, 107; Edwards v. Kearzey, 96 U.S. 595; Tennessee v. Sneed, 96 U.S. 69; Brine v. Hartford Ins. Co., 96 U.S. 627; United States v. Memphis, 97 U.S. 284; Memphis v. U.S. 97 U.S. 293; Railroad Co. v. Tennessee, 101 U.S. 337; Louisiana v. New Orleans, 102 U.S. 203; Daniels v. Tearney, 102 U.S. 415; Vial v. Penniman, 103 U.S. 714; Wolff v. New Orleans, 103 U.S. 358; Louisiana v. Pillsbury, 105 U.S. 278; Kring v. Missouri, 107 U.S. 221; Nelson v. St. Martin's Parish, 111 U.S. 716; Poindexter v. Greenhow, 114 U.S. 270; Port Mobile v. Watson, 116 U.S. 289; Siebert v. United States, 122 U.S. 284; Denny v. Bennett, 128 U.S. 489; Shreveport v. Cole, 129 U.S. 36; McGahey v. Virginia, 135 U.S. 662; Morley v. Lake Shore & Mich. S. Ry. Co., 146 U.S. 162; Barnitz v. Beverly, 163 U.S. 118; Ford v. Delta & Pine Land Co. 164 U.S. 662.

The following changes in the remedy have been held to impair the obligation of the contract:

1. Insolvent laws discharging the debtor's future earnings and property from liability. Sturges v. Crowninshield, 4 Wheat. 118; Bank v. Smith, 6 Wheat. 131; Schwartz v. Drinkwater, 70 Me. 409.

2. State insolvent laws which stay all proceedings and exempt future acquisitions during the stay. Bank v. Squires, 58 Am. Dec. 682.

3. State insolvent laws depriving creditors of the right to attach. Denny v. Bennett, 48 U.S. 489; Wilson v. Brochon, 95 F. 82; Bank v. Schranck, 73 N.W. 31; P. L. & C. Works v. Paint Co., 76 N.W. 359; Health & Hilligan Mfg. Co. v. Paint Co., 83 F. 777.

4. Statutes extending the time for redemption. Bronson v. Kinzie, 1 How. 311; Howard v. Bugbee, 24 How. 46; Barnitz v. Beverly, 163 U.S. 118; Coddington v. Bispham, 36 N. J. Eq. 574.

5. Statutes providing that no property shall be sold under execution except upon appraisement, and for two-thirds of its value. McCracken v. Hayward, 43 U.S. 608; Gantley v. Ewing, 44 U.S. 707; United States v. Conway, Fed. Cas. No. 14, 849; Olmstead v. Kellogg, 47 Iowa 460.

6. Statutes providing for stay of execution. Jacobs v. Smallwood, 63 N.C. 112; Edward v. Kearzey, 96 U.S. 595; Bily v. Gentry, 1 Missouri, 164; Chadwick v. Moore, 8 Watts and S. 49 (49 Am. Dec. 267).

7. A law requiring the payment of taxes as a condition precedent to the suit. Walker v. Whitehead, 83 U.S.; Lathrop v. Brown, Fed. Cas. No. 8, 108; Mitchell v. Cothrans, 49 Ga. 125.

8. A statute requiring the production of the original State bond before paying coupons. McGahey v. Virginia, 135 U.S. 662.

9. Where the creditor relies upon a particular means of satisfaction, such as a definite tax levy or other dependable source, accruing in the future, the legislature cannot deprive him of his source of payment. Ford v. Land Co., 164 U.S. 622; Seibert v. U.S., 122 U.S. 284; Poindecker v. Greenhow, 114 U.S. 270; Nelson v. St. Martin's Parish, 111 U.S. 716; Wolf v. New Orleans, 103 U.S. 358; Van Hoffman v. Quincy, 4 Wall, 535.

10. A legal remedy, such as a right to foreclose in case the mortgagee deems himself insecure, which is incorporated in the contract, cannot be changed by legislation. Boice v. Boice, 27 Minn. 371; Billmeyer v. Evans, 40 Pa. 324.

11. Exemption laws increasing the amount of property exempt from execution. Edwards v. Kersey, 96 U.S. 595; 12 A. & E. Enc. Law, 2d Ed., 166 and cases cited.

From the above, it seems self evident that exemption laws which increase the property reserved to the debtor, enacted after the making of the contract, impair its obligation.

But are not the future earnings of the debtor, property? Is not this source of performance tangible, and could it not have been the subject of contract? In hundreds of cases railroad men, once employed, have permanent position for life and certainly their wages are fixed, and their employer known. Such unearned wages are susceptible of assignment. The debtor could have assigned them to the creditor as security for the debt. Hawley v. Bristol, 39 Conn. 26; Augur v. New York Belting, etc., Co., 39 Conn. 536; Harrop v. Landers, etc., Co., 45 Conn. 561; Metcalf v. Kincaid, 87 Iowa 443; Wade v. Bessey, 76 Me. 413; Pullen v. Monk, 82 Me. 412; Shaffer v. Union Min. Co. 55 Md. 74; Ouimit v. Sirois, 124 Mass. 162; Papineau v. Naumkeag Steam Cotton Co., 126 Mass. 372; Kane v. Clough, 36 Mich. 436, 24 Am. Rep. 599; Runnells v. Bosquet, 60 N.H. 479; Carter v. Nichols, 58 Vt. 553; State v. Hastings, 15 Wis. 76.

The new exemption law does not abolish merely a statutory remedy, it destroys all means of enforcement.

Messrs. Bennett, Harkness, Howat, Sutherland & Van Cott, for garnishee.

The garnishee, The Rio Grande Western Railway Co. has no interest in this case except to pay the amount it owes for the labor of the co-respondent Bird, to the party to whom, in law, it is due, and to protect itself from a double liability in case it pays to the wrong party. When notified by Bird of his claim of exemption, it was its duty to state the facts and submit the decision to the courts. As the statute law distinctly grants the exemption, it was not for the garnishee to declare the law unconstitutional. It stands as stakeholder, ready to pay the party entitled to receive the money. The case, on the merits, stands between the other parties.

Appellants cites cases to show what construction has...