Packard Motors Co. of Alabama v. Tally

• Decision Date: 19 March 1925
• Docket Number: 6 Div. 367
• Parties: PACKARD MOTORS CO. OF ALABAMA v. TALLY.
• Court: Alabama Supreme Court

103 So. 455

212 Ala. 487

PACKARD MOTORS CO. OF ALABAMA v. TALLY.

6 Div. 367

Supreme Court of Alabama

March 19, 1925

Appeal from Circuit Court, Jefferson County; C.B. Smith, Judge.

Garnishment suit by Zac. C. Tally against Val Freeman, with the Packard Motors Company of Alabama as garnishee. Judgment for plaintiff, and the garnishee appeals. Transferred from Court of Appeals under section 6, p. 449, Acts 1911. Reversed and rendered.

Stokely Scrivner, Dominick & Smith and Andrew J. Thomas, all of Birmingham, for appellant.

James J. Jackson, of Birmingham, for appellee.

BOULDIN J.

The plaintiff sued out a garnishment upon a judgment. The garnishee answered in writing denying indebtedness in due form under Code 1923, §§ 8055, 8067. Thereafter plaintiff obtained an order for an oral examination before the court. Code 1923, § 8067. On oral examination the court rendered judgment against the garnishee for the amount of the plaintiff's debt. The garnishee appeals.

The oral answer disclosed the following facts: The defendant in the judgment was employed by the garnishee as an automobile salesman. By the contract of employment he was to be allowed a commission on cars sold by him, but should have a drawing account up to $150 per month, and at the end of each month if he had drawn more than the amount of commissions earned during the month, the overdraft would be charged against his next month's account. The contract was to terminate at the will of the parties, or either of them.

At the time garnishment was served on the employer, the employee had overdrawn several hundred dollars. The employment continued during the pendency of the garnishment and to the time of oral examination, a period of several months. Meantime, the employee continued to draw each month to the amount of his drawing account, which was increased meantime to $175 per month, and during the entire time he continued to be indebted to his employer, the garnishee.

"It is perfectly competent for an employer to stipulate with an employee, by bona fide agreement, that he will pay his wages weekly, or monthly, or for any other reasonable time, in advance; and such agreement, when free from fraudulent collusion, will be upheld by the court. And so long as these payments are made in advance, no debt can accrue for wages or salary due to such employee; and hence the employer can not be held liable as garnishee, under such state of facts. Alexander v. Pollock & Co., 72 Ala 137; Callaghan v. Pocassett Mfg. Co., 119 Mass. 173; Worthington v. Jones, 23 Vt. 546." Archer v. People's Savings Bank, 88 Ala. 249, 254, 7 So. 53, 55.

The above case involved the employment of the president of a bank at an annual salary of $3,000, with the privilege of drawing such salary by the week, and each week in advance. It was declared that so long as the weekly allowance was drawn in advance, the lien of the garnishment could not attach, but if collection in advance was waived and any sum became due and unpaid, it would pass under the lien of the garnishment.

In Alexander v. Pollock, 72 Ala. 137, there was, at the time garnishment served, a contract of employment by the month, to be ended at will. Pending the garnishment, the contract was changed at the beginning of a new month making the wages payable weekly in advance, to end at will. The employee continued in the employment for a year pending the garnishment, receiving his wages weekly in advance. The employer was held not liable under the garnishment. See, also, Steiner Bros. v. Bank of Montgomery, 115 Ala. 575, 22 So. 72.

In Gray v. Perry Hardware Co., 111 Ala. 532, 20 So. 368, the employee had the privilege of drawing, not exceeding a month's salary, in advance. He drew only a part of his salary before it matured at the end of the month. Held, the balance for which the employer owed him at the end of the month was subject to the garnishment; and, if the advance payment is to be made on the first of the month, any portion not drawn at that time is subject to the garnishment.

Our statutes subject wages to become due pursuant to a contract existing or made pending the garnishment. This provision does not reach future installments of wages under a contract that may be terminated at the will of the employee. Henry v. McNamara, 124 Ala. 412, 26 So. 907, 82 Am.St.Rep. 183. But if wages are earned under such a contract, so that the employee has a right of action in assumpsit for wages earned, the lien of the garnishment attaches. Authorities supra.

If wages are payable under the contract at the end of a month or other period in which they are earned, they become subject to the lien of a pending garnishment, and the employer pays them at his peril. Lady Ensley Furnace Co. v. Rogan &amp Co., 95 Ala. 594, 11 So. 188; Montgomery Candy Co. v. Wertheimer-Swartz Shoe Co., 2 Ala.App. 403, 57 So. 54. And...