Mid-South Paving Co. v. Trinidad Asphalt Mfg. Co.

• Decision Date: 09 April 1945
• Docket Number: 35818.
• Citation: 197 Miss. 751,21 So.2d 646
• Court: Mississippi Supreme Court
• Parties: MID-SOUTH PAVING CO. v. TRINIDAD ASPHALT MFG. CO. et al.

21 So.2d 646

197 Miss. 751

MID-SOUTH PAVING CO. v. TRINIDAD ASPHALT MFG. CO. et al.

No. 35818.

Supreme Court of Mississippi

April 9, 1945

Wm. Harold Cox, of Jackson, for appellant.

Jas. Kendall, of Jackson, for appellees.

ROBERDS, Justice.

This is a non-resident attachment in chancery under Sec. 2729, Code 1942. Appellant, a co-partnership consisting of two resident citizens and three non-residents of Mississippi, filed a bill against Trinidad Asphalt Manufacturing Company, a non-resident corporation, domiciled at St. Louis, Missouri, and the Mississippi Highway Commission, (which we will hereafter call department) seeking to establish an indebtedness in its favor against Trinidad and for a personal decree therefor, and to have applied to such indebtedness money of Trinidad which Department has in its possession, or which it owes Trinidad. Citation for Trinidad was served upon its designated resident agent, but it did not appear. The Department made a motion to quash the proceeding as to it on the ground that it is an agency of the state, disbursing public money, and is not liable to attachment herein. The motion was sustained, and the correctness of that ruling is the only question for decision on this appeal. Appellant contends that while the Department is technically a government agency, its functions are not governmental within the rule heretofore announced by the Court rendering it immune, as a party to this proceeding but, if so, the rule ought not to apply under the peculiar facts of this case.

The bill and agreed stipulation disclose that Trinidad was the prime contractor with the Highway Department for the construction of 11.353 miles of hard-surfaced public highway on route No. 45 in Lowndes County, Mississippi, according to plans and specifications of such Department, and under the supervision of, and subject to final inspection and acceptance by, said Highway Department; that Trinidad entered into a sub-contract with Mid-South, under which Mid-South would furnish and properly lay the asphalt and concrete on said road as required by the prime contract, Trinidad to construct and prepare the road-bed therefor, which contract set out the compensation Mid-South should receive, as well as the respective duties and obligations of the parties thereunder. Both the prime and sub-contractor performed and completed their respective parts of the work under the supervision of the Highway Department and the completed job had been finally inspected, approved and accepted by the Department; that Trinidad had failed to pay Mid-South, and was indebted to it in the approximate sum of $80,000; that Trinidad was qualified to do business in Mississippi, and that 'The State Highway Commission has in its hands a substantial sum of money due the prime contractor, Trinidad, for this work * * *;' and that Trinidad has no assets whatever in this state other than such money.

The Department cites, in support of its contention, McBain v Rodgers, Miss., 29 So. 91; Dollman v. Moore, 70 Miss. 267, 12 So. 23, 19 L.R.A. 222; Dollar v. Allen-West Commission Co., 78 Miss. 274, 277, 28 So. 976; Clarksdale Compress Co. v. W. R. Caldwell Co., 80 Miss. 343, 31 So. 790; Howell v. Kersh, 152 Miss 266. 119 So. 186; and Smith v. Doehler Metal Furniture Co., 195 Miss. 538, 15 So.2d 421.

The McBain case was a garnishment at law. There are vital distinctions between the duties and liabilities of a garnishee at law and a defendant-garnishee in chancery. In a law garnishment a garnishee, in addition to being required to answer whether it owes, or has in its possession effects of, the non-resident defendant, must also answer whether it knows or believes that any other person is indebted to, or has in his possession effects of, such non-resident, and, if so, whom, in what amount, and where he resides. Sec. 2788, Code 1942. And if he fail to answer, the court shall enter judgment against him for the amount of plaintiff's demand and all costs. Sec. 2798, Code 1942. Such law-garnishee, to protect himself, is also under certain duties to raise the question of exemption of the debtor-defendant (Sec. 2799, Code 1942; City of Laurel v. Turner, 80 Miss. 530, 31 So. 965), as well as the validity of the judgment on which the garnishment is based. Sec. 2803, Code 1942.

And the tendency of the legislature has been to enlarge the right of garnishment against public bodies, even in law cases, as is shown by the enactment of Ch. 321, L.1936, Sec. 2783, Code 1942, permitting garnishments in such cases against the State, counties and municipalities, and policial subdivision thereof, where plaintiff has obtained a judgment upon which execution may issue, although no default judgment can be taken if such garnishee fails to answer. Sec. 2790, Code 1942. But in attachments in chancery the garnishee is simply made a defendant in the original cause against the nonresident debtor, and the only duty of the garnishee is to answer whether he is indebted to, or has in his possession effects of, such nonresident debtor; and if so, in either case, to deliver the same to the court in that cause, if the court so finally orders, for disposition by the court as it may adjudicate to be lawful and equitable.

In the Dollman v. Moore case the garnishee was the board of school trustees of Yazoo City. The trustees did not raise the question of whether they could be garnished, and the court held that the nonresident debtor could not do so, and that the question was not jurisdictional, and affirmed the case. Therefore, that case is not authority for the position of the Highway Department. However, Judge Cooper did say in the opinion that a municipality was not a 'person' within the meaning of that word as used in the then attachment statute. Code 1880, Sec. 1832. But he did not mention the definition of that word as it appears in Sec. 1512, Code 1892 (Sec. 689, Code 1942), which section added to Sec. 1832, Code 1880, these words, '* * * shall apply to artificial as well as natural persons * * *.' In fact, Ch. 31, Definitions, which includes Sec. 1512, went into effect November 1, 1892, and the Dollman case was decided in October previously. It might be noted, too, that the board of school trustees was not a corporation or legal entity subject to suit, had the right to garnish it been raised by that board. But the court, after sustaining the attachment as to the municipality, did make this observation, which is pertinent to the case under consideration [70 Miss. 267, 12 So. 25]: 'We are not to be understood to say that a court of chancery will, in the exercise of its jurisdiction, permit municipal corporations to be subjected to decrees in favor of creditors of those to whom it may be indebted in all cases and under all circumstances. Certainly this should not be done when the effect would be to hamper or restrict them in the performance of public functions, or impede the execution of any contract into which they have entered. The exercise of a proper judicial discretion may be safely left to the courts, to be exercised as occasion requires.'

In Dollar v. Allen-West Commission Co. the county supervisors were the garnishees, and the foundation of the judgment in favor of the complainant, on which the attachment proceeding was based, was a matter with which the supervisors had no concern whatever.

The Compress case was an attachment in chancery, joining as defendants a non-resident corporation as debtor, and the town of Indianola as garnishee indebted to such non-resident. The court sustained the objection of the town and dismissed the garnishment. There, also, the town had no concern, or interest, in the controversy between complainant and the non-resident. The court made this observation: 'If a municipality, in its private capacity, should contract debts, so as to be subject to the process of the courts as a private individual, and become thereby liable to garnishment on other principles, it would be for the party claiming such liability to show the nature of the debt, and the amenability of the municipality to suit arising from the nature of the debt sought to be garnished; but that purpose is not sought in this case. That a municipality, unless so subjected by legislative act, is not liable to suit, by garnishment or otherwise, for debts arising from the exercise of its governmental functions, is settled by many authorities.' It then quotes this statement from the American & English Encyclopedia of Law: 'This rule is generally placed on the ground that, as a public corporation is created for the public benefit, with political powers, to be exercised for purposes connected with the public good in the administration of civil government, public policy demands that such bodies should not be subjected to the serious interruptions in the prosecution of public business, the inconvenience and delay in the prompt and efficient discharge of official duties and the accomplishment of important works and measures, which might result from their subjection to such process.' It will be noted this rule refers to public corporations 'with political powers' exercised in the administration of 'civil government.'

The Howell v. Kersh case involved many persons, a number of suits and many questions, with none of which did the county have any concern. The garnishment feature undertook to attach in the...