National City Bank of St. Louis v. Stupp Bros. Bridge & Iron Co.

• Citation: 147 Miss. 747,113 So. 340
• Decision Date: 13 June 1927
• Docket Number: 26495
• Parties: NATIONAL CITY BANK OF ST. LOUIS et al. v. STUPP BROS. BRIDGE & IRON CO. [*]
• Court: Mississippi Supreme Court

113 So. 340

147 Miss. 747

NATIONAL CITY BANK OF ST. LOUIS et al. v. STUPP BROS. BRIDGE & IRON CO. ^[*]

No. 26495

Supreme Court of Mississippi

June 13, 1927

Division A

1. BANKS AND BANKING. Suit in attachment cannot be maintained against national bank to recover proceeds of warrant delivered to it (Hemingway's Code, section 293; U.S Compensation Statutes, section 9834).

Suit in attachment under Code 1906, section 536 (Hemingway's Code, section 293), against a national bank seeking to recover proceeds of warrant under assignment before its delivery to bank, held within Revised Statutes, U.S., section 5242 (U. S. Compensation Statutes, section 9834), providing that no attachment, injunction, or execution shall be issued against bank or property before final judgment.

2 APPEARANCE. National bank's appearance in suit in attachment before final judgment by motion to quash did not vest court with jurisdiction (Hemingway's Code, sections 293, 2953; U.S. Compensation Statutes, section 9834).

Appearance of national bank in suit in attachment under Code 1906 section 536 (Hemingway's Code, section 293), by motion to quash on ground of lack of jurisdiction, held not to vest court with jurisdiction to render personal decree against it; Code 1906, section 3946 (Hemingway's Code, section 2953), being inapplicable, in that motion to quash was based on want of power to proceed, against, national bank by attachment before judgment should be rendered as provided by Revised Statutes, U.S., section 5242 (U. S. Compensation Statutes, section 9834).

Suggestion of Error Overruled June 29, 1927.

APPEAL from chancery court of Hinds county, First district.

HON. V. J. STRICKER, Chancellor.

Suit by Stupp Bros. Bridge & Iron Company against the National City Bank of St. Louis and another. Decree for complainant, and defendants appeal. Reversed and judgment rendered.

Decree reversed and motion sustained.

Wells Stevens & Jones and Jeffries, Simpson & Plummer, for appellant.

I. This proceeding violates the Federal statute and the attachment is void and the court had no jurisdiction. Section 5242, Revised Statutes of the United States, U. S. Compiled Statutes 1901, page 3517. The supreme court of the United States construed this section of the Federal statute in Pac. Nat'l Bank v. Mixter, 124 U.S. 721, 31 L.Ed. 567. See, also, the later case of Van Reed v. Peoples Nat'l Bank, 198 U.S. , 49 L.Ed. 1161; and 7 C. J., page 836, paragraph 802. In 7 C. J., footnote 99, page 837, authorities are arrayed in support of the text, state and Federal. Searles v. Smith Grain Co., 80 Miss. 698, 32 So. 287, is the only case cited which is apparently contra. See, too, 6 Fed. Stat. Ann., page 910.

A petition to set aside a preference under this section was sustained in Lamb v. Ulrich (1923), 94 Okla. 240, 221 P. 741. See, also, American Nat'l Bank v. Dure, 148 Ga. 498, 97 S.E. 70; Merchants' Laclede Nat'l Bank of St. Louis v. Troy Gro. Co. (Ala.), 39 So. 478.

The foregoing authorities demonstrate without dispute that an attachment against a national bank contravenes the Federal statute and is, therefore, a nullity. The court has no jurisdiction. It is elementary that the Federal statute is paramount and the decisions of the supreme court of the United States construing the statute are binding upon all courts, state and Federal.

II. An attachment against a foreign national bank with the service of a writ of garnishment upon a resident bank, either state or national, is in fact an attachment condemned by the Federal statute.

Under the Mississippi statutes, and the decisions of our own state, the bill of complaint in this cause is essentially one in attachment and it makes no difference that there is no actual levy of a writ of attachment upon tangible property, such as real or personal property. An attachment can be maintained by serving a writ of garnishment upon a resident defendant, or under the statutes providing for an attachment in chancery by making the resident debtor a party defendant and serving him either with a copy of the bill or having summons state on its face the purpose of the suit. Section 294, Hemingway's Code.

A review of the Mississippi statutes on attachment in common-law actions and the statutes investing the chancery court with jurisdiction all show that nonresidency is a ground of attachment. Section 125, Hemingway's Code.

In the case at bar the National City Bank is a foreign corporation and in the absence of the Federal statute could be attached in Mississippi at the suit of any creditor here. Sections 129 and 130, Hemingway's Code, give the form of a writ of attachment. See, also, section 132, Hemingway's Code. These statutes have been in the Code of Mississippi from pioneer days. For construction of them, see the early case of Bryan v. Lashley, 13 S. & M. 284, in which it will be observed that our court says: "To garnishee is to summon or serve the attachment on the garnishee. It is in effect, also to attach the debt."

There is no question but that the service of the writ of garnishment binds the debt owing by the garnishee and that the attaching creditor by service of the writ acquires a lien from the date of the levy. This is the express holding of the Mississippi supreme court in Wells v. Brander, 10 S. & M. 348.

So we see that we have express authority in Mississippi to the effect that the lien acquired by the service of writ of garnishment takes precedence over a subsequent declaration of bankruptcy. See, too, Delta Ins. & Realty Co. v. Fire Ins. Co., 113 Miss. 542, where the court was called upon to pass upon an unusual state of facts. R. R. Co. v. Lyon, 99 Miss. 186, is directly in point and settles the proposition that the debt in the hands of the garnishee is bound by the service of the writ.

It will be seen from the foregoing that the service of a writ of garnishment in this state creates a lien on the debt and the garnishee is bound to answer or in default thereof a judgment can be taken against him. Sections 293, et seq., Hemingway's Code, conferring jurisdiction upon the chancery court of attachment against nonresidents, expressly provide that the effects or indebtedness shall be bound by the service of process.

The adjudications in Mississippi are in line with the adjudications in other jurisdictions: Northfield Knife Co. v. Sharpleigh, 24 Neb. 635, 39 N.W. 788, 8 A. S. R. 224; Williamson v. Bowie, 6 Munf. 176; Locket v. Child, 11 Ala. 640; State v. Linaweaver, 50 Tenn. (3 Head.) 51, 75 Am. Dec. 757; Stover v. Stover, 6 Pa. Co. Ct. R. 614; Brunswick-Balke-Collender Co. v. Brown, 45 Leg. Int. 4; Martin v. Foreman, 18 Ark. 249; Ryan v. Burkam, 42 Ind. 507; Judge v. Reinhart (Com. Pl.), 3 Pa. Dist. R. 202.

These decisions illustrate the rule that the garnishee is bound by the service to hold the funds or indebtedness in his hands and pay them over in accordance with the judgment or decree in the attachment suit. There is no question, therefore, but that the Jackson-State National Bank in this case is absolutely bound to hold the funds in its possession to abide the decree in this cause. We regard this question absolutely settled by the statutes of Mississippi and decisions of our court.

III. The case of Bank v. Searles, 81 Miss. 169, may be differentiated. This case is entirely different, involving as it does a bill of lading for the shipment of personal property and the doctrine of the continuing liability of the bank which purchases the bill of lading; and, also, if the case is authority it is certainly superseded by the decisions of the supreme court of the United States and must either be differentiated or overruled.

IV. The Federal statute is paramount and the statute itself and the Federal decisions construing it are absolutely binding on this court. Planters Nat'l Bank of Va. v. Wysong & Miles Co. of N. C., 12 A. L. R. 1412, wherein the decisions are reviewed.

Alexander & Alexander, for appellee.

I. There has been no attachment within the purview of section 5242 of the Revised Statutes. No attachment is sought against the bank. The prayer of the bill does not ask for attachment. There is no writ to be quashed. The only process in the cause is a summons to the Jackson-State National Bank and a nonresident summons by publication of the National City Bank; that is all. We have seized nothing; we have attached nothing; we hold nothing; the sheriff has nothing in his custody.

The Jackson-State National Bank has been served with notice of the suit. If it has funds to the credit of the nonresident, it is supposed to answer to that effect. Being a garnishee it is held to answer for, and decree against the nonresident to the extent of the funds in its possession. The court does not control them nor the sheriff.

Appellant's brief admits that a garnishment against a national bark is permitted by section 5242, Revised Statutes. If, standing alone, the garnishment in this case is lawful, how may it be tainted by designation as "attachment?" We have done nothing more than garnish a resident and made publication for the nonresident. If the garnishment is not prohibited, what else have appellants of which to complain?

Section 5242 of the Revised Statutes being in derogation of fundamental existing rights must be construed with strictness. Corn Exchange Bank v. Blye, 101 N.Y. 303.

The distinction between garnishment and attachment is clear and fundamental. There is abundant authority for the contention that section 5242, Revised Statutes, does not include garnishment. A typical case is Earle v. Pa., 178 U.S. 449, 44 L.Ed. 1146. See, also, Hower v. Weiss Co., 55 F. 356 (C. C. A.), to the effect that section 5242 does not prohibit a Federal court from issuing an injunction against a national...