Merrill, Lynch, Pierce, Fenner & Smith, Inc. v. Allied Bank of Texas

• Court: Texas Court of Appeals
• Writing for the Court: Before J. CURTISS BROWN; ELLIS
• Citation: Merrill, Lynch, Pierce, Fenner & Smith, Inc. v. Allied Bank of Texas, 704 S.W.2d 919 (Tex. App. 1986)
• Decision Date: 30 January 1986
• Docket Number: No. A14-85-570-CV,A14-85-570-CV
• Parties: MERRILL, LYNCH, PIERCE, FENNER & SMITH, INC., Appellant, v. ALLIED BANK OF TEXAS, Appellee. (14th Dist.)

Page 919

704 S.W.2d 919

MERRILL, LYNCH, PIERCE, FENNER & SMITH, INC., Appellant, v. ALLIED BANK OF TEXAS, Appellee.

No. A14-85-570-CV.

Court of Appeals of Texas Houston (14th Dist.).

Jan. 30, 1986.

Rehearing Denied Feb. 27, 1986.

W. Bruce Monning, Rebecca L. Burt, Dallas, for appellant.

Margaret Streeter, Houston, for appellee.

Before J. CURTISS BROWN, C.J., and SEARS and ELLIS, JJ.

OPINION

ELLIS, Justice.

This is an appeal from a default judgment in garnishment entered against Appellant.

Appellee filed an Application for Writ of Garnishment after Judgment to garnish all accounts in Appellant's possession in the name of its debtor, Patrick S. Martin, and/or Patricia Motlow Boyd Martin to collect a judgment obtained by the Bank of Texas against Patrick S. Martin on December 2, 1970. The Bank of Texas merged to become Continental Bank of Texas which became Allied Bank of Texas in 1975. The amount of that judgment was $25,738.89, together with interest at the rate of ten per cent per year from January 16, 1970 until the date of judgment, plus $2,573.89 in attorney's fees and interest on the total judgment until paid. Martin failed to pay any amount toward the satisfaction of the judgment. Appellant, Merrill Lynch, garnishee below, neither appeared nor answered, and a default judgment in garnishment was rendered against it on November 28, 1984. It is from this default judgment that Appellant seeks a writ of error from this court.

To obtain a writ of error, Appellant must meet three prerequisites. The writ must be filed within six months of the judgment appealed from; the error in the judgment must appear affirmatively on the face of the record; and the plaintiff in error cannot have participated either in person or through counsel in the actual trial of the case. Tex.Rev.Civ.Stat.Ann. art. 2255 (Vernon 1971) ¹; Tex.Rev.Civ.Stat.Ann. art 2249a (Vernon 1971) ²; Glenn W. Casey Constr., Inc. v. Citizen's Nat'l. Bank, 611 S.W.2d 695, 698 (Tex.Civ.App.--Tyler 1980, no writ); Lewis v. Beaver d/b/a Mid-State Indus., 588 S.W.2d 685, 686 (Tex.Civ.App.--Houston [14th Dist.] 1979, writ ref'd n.r.e.). Merrill Lynch did not answer or appear for the trial of this cause. Accordingly, it seeks a writ of error to correct errors of law which were made therein. We reverse the order of the trial court entering the default judgment and render judgment that the writ of error should be granted based on Appellant's first point of error.

In point of error one, Appellant contends the default judgment is reversible on writ of error because the garnishor/appellee, Allied Bank of Texas, failed to show that it owned the underlying judgment upon which the garnishment judgment is based. The writ of garnishment states that Allied Bank of Texas is entitled to the judgment. The application for writ of garnishment incorporates by reference the judgment referring to the Bank of Texas as owner of the judgment. The language in the writ of garnishment indicating ownership by Allied Bank of Texas is contradicted by the actual judgment which is in favor of Bank of Texas. Appellee did not explain anywhere in the record how the judgment passed from Bank of Texas to appellee. We know of no way of assuming, by judicial notice or otherwise, that the mergers forming Allied Bank of Texas served to transfer judgments belonging to Bank of Texas to appellee.

It has been stated that "the remedy of garnishment is summary and harsh and it follows that such proceedings cannot be sustained unless they are in strict conformity with statutory requirements." Casey Constr., 611 S.W.2d at 700. Article 4076(3) ³ set forth the requirements for obtaining post-judgment garnishment. The garnishor needs to show that he has a "valid, subsisting judgment...." Case law had interpreted this statute as requiring that the garnishor establish ownership of the underlying judgment. See, e.g., Weinstein v. Wilhide Equip. Co., 397 S.W.2d 94, 96 (Tex.Civ.App.--Tyler 1965, no writ); Bartex, Inc. v. Napier, 492 S.W.2d 285, 286 (Tex.Civ.App.--Dallas 1973, no writ). Therefore, unless error has been waived by appellant's failure to appear before default, the garnishment judgment must be reversed for noncompliance with 4076(3).

It has been held that the failure to substantially comply with the statutes and rules governing garnishment procedure renders the garnishment judgment void. 17 Tex.Jur.3d, § 374 (1982); Parker-Morgan Lumber Co. v. Parrish, 291 S.W. 266, 267 (Tex.Civ.App.--Beaumont 1927, no writ). Certain defects in the garnishment...