Bugg v. Consolidated Grocery Co.

118 S.E. 56, 155 Ga. 550, 1923 Ga. LEXIS 121
CourtSupreme Court of Georgia
DecidedMay 15, 1923
DocketNo. 3375
StatusPublished
Cited by11 cases

This text of 118 S.E. 56 (Bugg v. Consolidated Grocery Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bugg v. Consolidated Grocery Co., 118 S.E. 56, 155 Ga. 550, 1923 Ga. LEXIS 121 (Ga. 1923).

Opinion

Russell, C. J.

The only question involved in this case is whether a receiver appointed by a court is subject to garnishment without the consent of the court by which he was appointed. Our learned brethern of the Court of Appeals held that Bugg, as receiver of the Atlanta, Birmingham & Atlantic Railway Company, appointed by the United States court, could be garnished, and that therefore the funds admitted to be in his hands were subject to garnishment. In the second headnote of the decision of the Court of Appeals it is held: An indebtedness due by a receiver, appointed by a United States district court for a railroad corporation, to an employee, for services rendered to the receiver in carrying on the business of the railroad, is a ’transaction of [551]*551[the receiver] in carrying on the business connected with’ the railroad property, and in respect of which he may be sued in a State court without the previous leave of the court in which he was appointed. It follows, therefore, that a garnishment proceeding instituted in a State court against such receiver, in so far as it subjects to process of garnishment any indebtedness due by the receiver to an employee for services rendered to the receiver during the receivership, in carrying on the business connected therewith, is such a suit as may, under the above-quoted act of Congress [United States Judicial Code, § 66], be instituted against the receiver.” The' decision of the Court of Appeals rests upon the proposition that under § 66 of the United States Judicial Code, the making of a debt to an employee is such an act or transaction as comes within that section contained in the act of Congress of March 3, 1887.

We are of the opinion that the Court of Appeals erred in holding that the garnishment could proceed for the reasons stated, or for any other reasons which rest within our knowledge. This court is of the opinion that no receiver can be made subject to the process of garnishment, except by leave of the court which appointed him; and it is admitted in the case at bar that no such leave had been obtained from the United States court by which Bugg was appointed as receiver. This conclusion may, we think, be properly reached by mere reference to § 5485 of our Civil Code, which declares that no receiver shall be subject to garnishment. This would seem to be sufficient authority to end any further discussion upon this point. Long before this code section was adopted, this court, speaking through Judge Nisbet in the ease of Fields v. Jones, 11 Ga. 413, held that funds or property in the hands of a receiver were virtually in the hands.of the court, and that garnishment could not be permitted to interfere with the administration of anything of any nature of which a court of equity had taken charge. However, since the decision of the Court of Appeals is based upon a construction of § 66 of the United States Judicial Code, it becomes necessary to consider whether the ruling of the Court of Appeals is sound under the statute above referred to, as corrected by the act of August 13, 1888 (known as the judiciary act) and the decisions of the courts of the United States construing 36 Stat. L. 1104, United States [552]*552Judicial Code, § 66, as it now appears in volume 5 of Federal Statutes Annotated 541. Section 66 is as follows: “ Every receiver or manager of any property appointed by any court of the United States may be sued in respect of any act or transaction of his in carrying on the business connected with such property, without the previous leave of the court in which such receiver or manager was appointed; but such suit shall be subject to the general equity jurisdiction of the court in which such manager or receiver was appointed, so far as the same may be necessary to the ends of justice.” The Court of Appeals, in quoting this section as a basis for its ruling, seems to have omitted consideration of the concluding sentence thereof, in which it is declared: “but such suit shall be subject to the general equity jurisdiction of the court in which such manager or receiver was appointed, so far as the same may be necessary to the ends of justice.”

We cannot concur in the construction placed on section 66 by the Court of Appeals. The “ act or transaction of his in carrying on the business connected with such property” can not include the mere holding of funds which may have accrued in the operation of the railroad or by borrowing money and which may be subject to be paid on indebtedness to employees serving under him, because these employees are in effect the servants of the court and in its employ; and of course a court of chancery can not be subject to garnishment, for garnishment is a legal proceeding, and the chancellor can not be required to appear and plead in a court of law. Even if this were not true, under the provisions of § 65 of United States Judicial Code, 36 Stat. L. 1104 (5 Fed. Stat. Ann. 541), all receivers in causes pending in a United States court, who are in possession of any property, shall manage the same according to the requirements of the valid law of the State; and in this State, under the provisions of the Civil Code, § 5485, supra, no receiver is subject to process of garnishment. Furthermore it is our duty to construe § 66 in accordance with the construction given it by the courts of the United States. It is a well-settled rule of jurisprudence which has been followed by this court since its earliest history, as pointed out by Chief Justice Jackson in Clark v. Turner, 73 Ga. 1, to construe all statutes of a sister State, as well as the statutes of the United States, in- accordance [553]*553with the meaning and construction placed upon them by the courts of these foreign jurisdictions. Following this rule, ,we have endeavored to ascertain the construction placed upon the language of § 66, supra, by the United States courts. . We have been unable to find where the precise question has been passed upon by the Supreme Court of the United States, but in a number of cases in the Federal district courts it has been held that garnishment proceedings are not actions against the receiver for an act' or transaction of his, within the meaning of § 66, supra. Among such cases as may be cited are Central Trust Co. v. East Tennessee &c. Ry. Co., 59 Fed. 523; Central Trust Co. v. Chattanooga &c. R. Co., 68 Fed., 685; Central Trust Co. v. Wheeling &c. R. Co., 189 Fed. 82.

In the first the three cases just cited, in which the court was construing § 66, supra, it was held that: “ Garnishment proceedings are not suits against the receiver for any act or transaction of his/ within the meaning of the statute, and the appointing court may enjoin the bringing of such proceedings.” Circuit Judge Taft, now Chief Justice of the Supreme Court of the United States, participated in the decision and joined in the opinion. It was further held: “A proceeding for garnishment purposes is an equitable seizure of the funds and property within the custody of the court.” See also ex parte Tyler, 149 U. S. 164, 182 (13 Sup. Ct. 785, 37 L. ed. 689). In United States Trust Co. v. Omaha &c. Ry. Co., 61 Fed. 531, appears this syllabus: “Where a receiver appointed by a Federal court is brought into State courts through garnishment proceedings instituted by creditors of persons employed in the operation and maintenance of the railroad over which the receiver was appointed, the intent of such proceedings being to reach the wages, in the.

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Cite This Page — Counsel Stack

Bluebook (online)
118 S.E. 56, 155 Ga. 550, 1923 Ga. LEXIS 121, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bugg-v-consolidated-grocery-co-ga-1923.