R. & M. Tire Service Co., Inc. v. Deposit Guaranty Bank & Trust Co

• Citation: 160 So. 274,172 Miss. 436
• Decision Date: 18 March 1935
• Docket Number: 31624
• Parties: R. & M. TIRE SERVICE CO., INC., v. DEPOSIT GUARANTY BANK & TRUST CO
• Court: United States State Supreme Court of Mississippi

160 So. 274

172 Miss. 436

R. & M. TIRE SERVICE CO., INC., v. DEPOSIT GUARANTY BANK & TRUST CO

No. 31624

Supreme Court of Mississippi

March 18, 1935

Division A

1 GARNISHMENT.

Ordinarily garnishee must answer as of service of writ, giving amount owed defendant, and from that time garnishee is accountable to court for disposition of fund.

2 GARNISHMENT.

Bank served with garnishment against "J. S. Williams," whose name was not on bank's books, which disclosed fifty-three depositors named "Williams," six of whom had "J," as one of initials, held discharged by payment to S. J. Williams, even though officer told cashier that garnishment defendant worked for certain company and though bank knew that S. J. Williams should be addressed in care o such company.

3. BANKS AND BANKING.

Bank refuses at its peril to honor check of depositor having funds on deposit.

HON. W. H. POTTER, Judge.

APPEAL from the circuit court of Hinds county HON. W. H. POTTER, Judge.

Action by the R. & M. Tire Service Company, Inc., which sued out a writ of attachment describing the principal debtor as "J. S. Williams," and filed an affidavit naming the Deposit Guaranty Bank & Trust Company and others as garnishees. The court denied the contest of the answer of the garnishee named and dismissed the garnishment as to such garnishee, and plaintiff appeals. Affirmed.

Affirmed.

J. Morgan Stevens, Harry M. Bryan, and J. M. Stevens, Jr., all of Jackson, for appellant.

We find a uniform line of decisions which are to the effect that if the garnishee knows or should have known that the proceedings are intended to be against his creditor, the funds in its hands are bound by the service of the writ, irrespective of the manner in which the name of the principal defendant appears in the writ.

Nebhut v. Fourth National Bank, 116. So. 709.

The authorities even go further and hold that the garnishee would be liable if he had reason to suppose the proceedings are intended to be against his creditor.

Central of Ga. R. R. Co. v. Napier, 19 Ga.App. 483, 91 S.E. 1004; Citizens' Savings Bank v. Boswell, 127 Ky. 21, 104 S.W. 1014; 28 C. J. 220, par. 296.

The garnishee becomes liable to hold the property subject to the process where he has actual knowledge of the identity of the principal defendant, though the latter's name is not correctly given, or has reason to suppose the proceedings are intended to be against his creditor.

28 C. J. 321, sec. 296; Central of Ga. R. R. Co. v. Napier, 19 Ga.App. 483, 91 S.E. 1004; White v. Springfield Sav. Inst., 134 Mass. 232; 2 Paton's Digest, p. 1154; 28 C. J. 264.

Ricketts & Ricketts and Shaw & Pilgrim, all of Jackson, for appellee.

The opinion of this court in the case of Thompson v. Sturges, 32. Miss. 261, places squarely upon the plaintiff the burden of proof in the trial of a traverse of a garnishee's answer, denying indebtedness to the attachment debtor.

The responsibility for the error appearing in the writ rests upon the appellant.

20 Cyc., p. 1046.

In the absence of actual knowledge of the identity of the person whose funds the plaintiff seeks to bind, the garnishee is not liable under the facts of this case.

Hantman v. West Side Trust & Savings Bank, 249 Ill.App. 372; Kunde v. Prentice, 160 N.E. 193, 329 Ill. 82; German National Bank v. National State Bank, 5 Col. App. 427, 39 P. 71; William G. White v. Springfield Institution for Savings, 134 Mass. 232; Terry v. Sisson, 125 Mass. 560; Pure Oil Co. v. Walsh-Woldert Motor Co., 36 S.W.2d, 802; 5 Michie, Banks & Banking, p. 112, sec. 51; King v. McElroy, 55, A. 632, 25, R. I. 222; 28 C. J. 220, sec. 296.

The appellee bank was under a positive duty as to the exercise of care in disclosing information with respect to its depositors.

Section 3774, Code of 1930.

Argued orally by Harry M. Bryan, for appellant, and by M. A. Pilgrim, for appellee.

OPINION

McGowen, J.

On August 30, 1933, the R. & M. Tire Service Company, Inc., sued out a writ of attachment against J. S. Williams and a written suggestion of garnishment was filed with an affidavit wherein certain banks and corporations were named as garnishees, among which was the appellee, the Deposit Guaranty Bank & Trust Company. The affidavit, bond, and writ described the principal debtor as "J. S. Williams. " The writ commanded that the appellee, with others, be served as a garnishee.

Early in the morning on August 31, 1933, before business hours, one Hale, a deputy sheriff, served a writ of attachment and garnishment upon Swann, cashier of the Deposit Guaranty Bank & Trust Company, who turned it over to Mounger, a trust officer of the bank intrusted with the duty of handling garnishment writs. It was the custom of this officer, when he found on the books of the bank that it owed such a debtor, to make a red mark by the name, and that was notice to all its officers and employees to withhold payment of the money due to a debtor. Mounger found that the bank had fifty-three depositors by the surname of "Williams," six of whom had "J" as one of their initials. It was the custom of the appellee bank to arrange the initials alphabetically. He found no "J. S. Williams" on the books of the bank, and therefore did not place opposite any name a symbol indicating that the money should be withheld.

On August 30, 1933, "S. J. Williams" presented to a teller of the appellee bank a cashier's check of a Meridian bank, the signature on which was known by the officials of the appellee bank to be genuine. They therefore gave S. J. Williams credit on their books for the amount of the check, less cost of exchange, which was in excess of one thousand three hundred dollars. The account was entered on the books in the name of "S. J. Williams, 450, W. Cap. St., care of Montgomery Ward & Co., Jackson, Miss.," and this entry appeared upon the ledger of the bank. On August 31, 1933, subsequent to the service of the attachment and garnishment writ upon it, the bank paid "S. J. Williams" the full amount due him. At the time of payment there was some discussion among the bank officials as to whether there was a garnishment against "S. J. Williams," and it was decided that there was not; the initials being different from those on the writ.

The deputy sheriff, Hale, testified that, at the time he served the writ upon the bank's cashier he said: "They don't know whether his name is 'Jack' or 'S. J. Williams,' but it is one and the same one. . . . I told him that I had served it on Montgomery Ward, and that Mr. Williams was working down there." It is clear that he, at that time, did not remember whether he said "J. S." or "S. J.," as the initials of Williams. He had before him the amended writ, and was evidently confused thereby as to the initials. He said he gave this information to Swann at the direction of counsel for the attaching creditor. On cross-examination, Hale's evidence indicated that the first person on whom he served this writ was the appellee bank. One of the tellers of the bank knew the "Williams" who made and withdrew the deposit.

Upon these facts the bank answered the garnishment writ in statutory form that it was not indebted to "J. S. Williams," and the appellant, at a term of court subsequent to the service of the writ, was permitted to amend the writ and all pleadings so as to name the debtor defendant as "S. J. Williams."

In the contest of the answer to the garnishment writ, it is repeatedly alleged that the bank actually knew that S. J. Williams was the party intended to be named as debtor defendant. The officials of the bank testified that they had no knowledge as to the identity of the person. Swann testified that he did not recall the conversation with Hale, but would not deny it if Hale said so.

The case was tried before the circuit judge without the intervention of a jury, who denied the contest, and dismissed the garnishment as to the appellee bank, and from that judgment appeal is prosecuted here.

We are of the opinion that the circuit judge was well warranted in...