Peoples Bank v. Gore
| Decision Date | 22 February 1937 |
| Docket Number | 32427 |
| Court | Mississippi Supreme Court |
| Parties | PEOPLES BANK v. GORE |
Garnishee held not entitled to set-off of debt due it from the defendant, its employee, where instead of applying such employee's salary to payment of such debt, garnishee paid the salary to employee in full.
Salary that is paid in advance under a good-faith contract, not being a debt, may not be garnished, even though contract for payment in advance was made after service of writ of garnishment, in absence of any fraud other than employer's compliance with employee's desire to avoid garnishment.
Where salary, under express contract, is payable in advance for a stipulated period but is not in fact paid until after the day fixed by such contract, the entire salary paid for such period, which should have been paid in advance, will be subject to garnishment.
Where at time of a payment neither payee nor payer makes any application of such payment as among several debts due to payee, and rights of third persons are not involved, court will apply such payment as would at time of payment have been most beneficial to payer; but if rights of third parties are involved, will apply such payment as justice to all parties demands.
Where employer contracted to pay employee's salary weekly in advance, but at such employee's request paid such salary in irregular amounts and intervals so that employer was sometimes behind in its payments and sometimes ahead, such payments will be construed, in garnishment proceedings against employer and employee, as if each payment had been applied wherever possible to payment in advance for subsequent weeks rather than to payment of arrears, so as to render garnished employer liable only to extent of salary accruing before payment thereof, since advance payments are exempt from garnishment and employer would presumably have so applied the payments in order to avoid garnishment.
In garnishment proceedings, where part of defendant's salary was exempt from garnishment because paid in advance in a larger amount than would, under statute exempting fifty dollars a month, have been exempt if none of the salary had been paid in advance, remainder of such salary held not subject to statutory exemption (Code 1930, sec. 1755, par. 10(a), Laws 1932, chap. 138).
HON. L. A. SMITH, SR., Chancellor.
APPEAL from chancery court of Yalobusha county HON. L. A. SMITH, SR., Chancellor.
Suit by the Peoples Bank in receivership, M. L. Thompson, receiver, against T, O. Gore and others, wherein the Merchants Grocery Company was made garnishee. From the decree, plaintiff appeals. Reversed and rendered.
Decree reversed.
Kermit R. Cofer, of Water Valley, for appellant.
A debt that may be sued upon by the judgment debtor is garnishable.
Salary, if not paid on the day agreed for payment thereof, becomes a garnishable debt, within the meaning of the statute.
Payment of garnisheed wages renders the garnishee liable to the judgment creditor, for all payments made above legal exemption, if any, of debtor.
Brondum v. Rosenblum, 117 So. 363.
And this is true though the judgment debtor be indebted to garnishee, if the salary be not actually applied to the liquidation of judgment debtor's debt.
Brondum v. Rosenblum, 117 So. 363.
And advance payment agreements must be adhered and complied with, in order to remove wages or salary from garnishment.
Brondum v. Rosenblum, 117 So. 363.
The court should have permitted appellant to show why Gore desired to change his salary to payable in advance, as being intended to circumvent the garnishment already lodged against him.
The court should have permitted the appellant to show what was Gore's attitude toward the liquidation of the bank, in order to throw light on his intention to circumvent the garnishment lodged against him.
The Supreme Court having requested argument on the exemption feature of this law suit, appellant submits that there has been a great deal of doubt in his mind as to the debtor in this case being entitled to any exemption at all in view of the fact that he is president of the company and his salary is as such, and because of the fact that it is not believed by appellant that the section of the code dealing with exemptions, to-wit, section 1755, Code of 1930, subsection 10, paragraph A, gives to him an exemption, it providing that "the wages of every laborer or person working for wages, being the head of a family, to the amount of fifty dollars per month" would be entitled to the exemption.
According to appellant's view of the exemption law, this portion of the section above quoted, to-wit, section 1755, was intended to guarantee everyone coming within its terms the sum of fifty dollars regardless of garnishments or anything else, and was intended by the Legislature to be a social good, therefore, when the person who has been garnisheed receives the sum of fifty dollars per month from his salary he has no further objection or will be heard to exert no further objection or claim against the salary garnisheed.
In further answer to the queries of the court it is submitted by appellant that the exemption should be applied separately to each month's salary as the exemption and the salary for each month are together, and separate and apart from each of the other months. The further queries therein as to whether or not the part of the month's salary should be charged against his exemption for that month has been answered herein-above in the affirmative because the person whose wages are garnisheed is entitled to fifty dollars under the exemption law and no more, and any other view of this situation would place him in the attitude of receiving under the exemption law more of his salary than the exemption law allows him.
Creekmore, Creekmore & Capers, of Jackson, for appellee.
Where wages are paid in advance under an express or implied agreement such wages are not subject to garnishment.
Garnishee had the right of set-off in this case.
Brondum v. Rosenblum, 117 So. 363; Hardware Co. v. Heidelberg, 91 Miss. 598; Archer v. Whiting, 7 So. 53; 28 C. J. 279.
We earnestly submit that when payments are made in advance they do not have to be made on the pay day stipulated at may be made two or three days before the pay day, or at any time since the last pay day. As the payments are bound to have some status, either they must be advance payments, or payments on a past due account. They cannot be the latter, because the garnishment would take care of that so that there would be no past due account.
It is our conception of the law that the exemption is to be figured at fifty dollars per month.
Smith, C. J., McGowen, J., did not participate in the consideration or decision of this case.
The appellant sued the appellee, Gore and others, in the court below and obtained a decree against Gore for the sum of $ 1,000. Thereafter, a writ of garnishment was issued and served on the Merchants Grocery Company on April 26, 1935, returnable on October 28, 1935. The garnishee answered, denying that it was indebted to Gore; that it had any of his effects in its possession, and that it knew of any person who was indebted to him, or had any of his effects in possession. This answer was contested, and Gore also appeared and claimed his exemption of $ 50 per month under paragraph 10 (a) of section 1755, Code 1930 ().
The evidence disclosed that prior to May 16, 1935, Gore was employed by the garnishee at a salary of $ 185 per month, and on May 16th, a new contract was entered into by him which sets forth that Gore was unwilling to continue in the garnishee 's employment "unless his salary is paid weekly in advance," and provides that "the same is hereby fixed at the sum of $ 46.25 per week, payable in advance weekly on Monday of each week, and the Secretary-Treasurer is hereby authorized and directed to pay the salary of said T. O. Gore in the said sum weekly in advance." The payments made to Gore by the garnishee under this contract will be hereafter set forth.
At the time the writ of garnishment was served, Gore was indebted to the garnishee in an amount exceeding the appellant's judgment against him, and was so indebted when the decree against the garnishee was rendered, which indebtedness the garnishee claims the right to set off against any indebtedness it may otherwise owe him. The only debt, if any, which the evidence discloses to be due by the garnishee to Gore was the salary which it owed Gore under his contract of employment. All of Gore's salary was paid by the garnishee to him, and none of it was applied to the indebtedness due it by Gore, consequently the claimed offset cannot be allowed. Brondura v. Rosenblum, 151 Miss. 91, 117 So. 363, and 28 C. J. 283.
The court below awarded a decree against the garnishee of $ 87, being for salary due to Gore by the garnishee prior to May 16th, less his statutory excretion. The appellant says that the decree should have been for the full amount of Gore's salary that accrued before the return day of the writ of garnishment.
This brings us to the payments made to Gore by the garnishee after the contract entered into between them on May 16th. The garnishee claims to have paid Gore's salary weekly in advance under the terms of its contract with him, and therefore, after May 16, 1935, it was not liable to account to the appellant therefor.
If the factual element of this contention is true, i. e., the payment to Gore of his...
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