Family Finance Corp. v. Sniadach

154 N.W.2d 259, 37 Wis. 2d 163, 1967 Wisc. LEXIS 957

• Court: Wisconsin Supreme Court
• Decided: December 8, 1967
• Status: Published

Opinions

Currie, C. J.

Appellant attacks the constitutionality of Wisconsin’s garnishment before judgment statutes, secs. 267.02(1) (a) 1, 267.05 (1), 267.07 (1), 267.16 (1), 267.18 (2), and 267.21, Stats., on a number of grounds based on injustices and deprivations which have been, or are likely to be, suffered by others, but which she has not personally experienced.

One such ground is that poor wage earners may have their wages garnished in a situation where there is no merit to the claim for which the principal action has been instituted. As a result such wage earners either are forced to settle with the plaintiff by assigning future wages, or are deprived of their wages for a long period of time until the principal action can be tried and probable cause determined. Here, appellant’s indebtedness is on a note, and her affidavit in support of the order to show cause contains no allegation that she is not indebted thereon to plaintiff.

Another alleged ground of unconstitutionality is that sec. 267.18 (2) (a), Stats.,¹ makes no accommodation for defendants with more than one dependent. However, appellant received the benefit of the maximum subsistence allowance of one half of the amount of her garnished wages, and her affidavit does not allege how many dependents, if any, she has.

Another alleged ground of unconstitutionality is that sec. 267.21, Stats., which permits a defendant to post a bond and secure the release of his garnished property, denies equal protection of the laws to persons of low income. Appellant has made no showing that she is a person of low income and unable to post a bond.

A further alleged ground of unconstitutionality is that the garnishment before judgment statutes threaten the gainful employment of many wage earners. It is claimed that many employers discharge garnished employees for being unreliable. Appellant, however, has made no showing that her own employer reacted in this manner.

Still a further ground of attack is the provision in sec. 267.07 (1), Stats., which affords ten days’ time to plaintiff to serve the garnishee summons and complaint on defendant after service of same on the garnishee. Here, appellant was served on the same day as the garnishee.

It is a long-accepted rule that a party may not urge the unconstitutionality of a statute upon a point not affecting his or her rights.² In State ex rel. Kellogg v. Currens ³ the challenging party presented 11 grounds of attack upon the constitutionality of a statute. The court discussed the one which affected the challenger but refused to discuss the other ten, stating:

“. . . Statutes are not to be declared unconstitutional at the suit of one who is not a sufferer from their unconstitutional provisions. . . . We cannot set aside the acts of the legislature at the suit of one who, suffering no wrong himself, merely assumes to champion the wrongs of others. ...” ⁴

Accordingly we will confine our consideration of appellant’s grounds of attack upon the garnishment before judgment statutes to those directly affecting her. The grounds of attack which will thus be considered are:

(1) These statutes deprive appellant of her property without due process of law.

(2) Appellant is denied due process of law, because the statutes afford her no right to an immediate hearing to challenge the validity of the garnishment.

(3) The legislature has assumed judicial powers in violation of art. VII, sec. 2, Wis. Const.

(4) The garnishment before judgment statutes deny appellant equal protection of the laws because they subject wage earners to harsher summary process than other classes of debtors.

Deprivation of Property Without Due Process.

The garnishment before judgment proceedings do not involve any final determination of the title to a defendant’s property, but merely preserve the status quo thereof pending determination of the principal action. The defendant receives notice and a hearing before being permanently deprived of his or her property.

In McInnes v. McKay 5 it was contended that Maine’s statute, which permitted attachment, without affidavit or bond, in advance of judgment, deprived the defendant of due process of law contrary to the fourteenth amendment of the United States Constitution. The relevant statute provided:

“All civil actions, except scire facias and other special writs shall be commenced by original writs; which, in the Supreme Judicial Court, may be issued by the clerk in term time or vacation, and framed to attach the goods and estate of the defendant, and for want thereof to take the body, or as an original summons, without an order to attach goods and estate.” ⁶

The court held that this was:

“. . . not a deprivation without ‘due process of law’ for it is part of a process, which during its proceeding gives notice and opportunity for hearing and judgment of some judicial or other authorized tribunal.” ⁷

It noted that the attachment merely created a temporary lien, which did not destroy the defendant’s title. The court also cited the United States Supreme Court’s statement in Rothschild v. Knight⁸ that to what actions the remedy of attachment may be given is for the legislature of a state to determine and its courts to decide.

McInnes v. McKay was affirmed under the title McKay v. Melnnes by the United States Supreme Court in a per curiam decision ⁹ on the authority of Ownbey v. Morgan ¹⁰ and Coffin Brothers v. Bennett.¹¹

Ownbey v. Morgan upheld the constitutionality of Delaware’s foreign attachment law as not being a denial of due process even though it harshly provided that before the defendant could appear and defend he had to give security in the amount of the value of the property attached. The court in its opinion declared:

“The due process clause does not impose upon the States a duty to establish ideal systems for the administration of justice, with every modern improvement and with provision against every possible hardship that may befall. It restrains state action, whether legislative, executive, or judicial, within bounds that are consistent with the fundamentals of individual liberty and private property, including the right to be heard where liberty or property is at stake in judicial proceedings. . . .” ¹²

Coffin Brothers v. Bennett involved a Georgia statute which authorized the superintendent of banks to issue an execution against the property of a stockholder of a defunct bank and upon whom a stock assessment had been levied. Mr. Justice Holmes wrote the unanimous opinion for the court and stated:

“The objection urged by the plaintiffs in error seems to be that this section purports to authorize an execution and the creation of a lien at the beginning, before and without any judicial proceeding. But the stockholders are allowed to raise and try every possible defense by an affidavit of illegality, which, as said by the Supreme Court of Georgia, makes the so called execution ‘a mode only of commencing against them suits to enforce their statutory liability to depositors.’ A reasonable opportunity to be heard and to present the defence is given and if a defence is presented the execution is the result of a trial in Court. The Fourteenth Amendment is not concerned with the form. Missouri ex rel. Hurwitz v. North, 271 U. S. 40, 42. The fact that the execution is issued in the first instance by an agent of the State but not from a Court, followed as it is by personal notice and a right to take the case into court, is a familiar method in Georgia and is open to no objection. . . .” ¹³

While neither Ownbey v. Morgan nor Coffin Brothers v. Bennett involved garnishment before judgment statutes, their rationale, when cited by the United States Supreme Court as authority for affirming Mclnnes v. McKay becomes clear. It is that the creditor’s remedies involved, though harsh, did not deprive a man of his property without notice and an opportunity to be heard.

The ability to place a lien upon a man’s property, such as to temporarily deprive him of its beneficial use, without any judicial determination of probable cause dates back not only to medieval England but also to Roman times.¹⁴ In regard to the constitutional relevance of antiquity, Mr. Justice Holmes has stated:

“The Fourteenth Amendment, itself a historical product, d1id not destroy history for the States and substitute mechanical compartments of law all exactly alike. If a thing has been practiced for two hundred years by common consent, it will need a strong case for the Fourteenth Amendment to affect it, as is well illustrated by Ownbey v. Morgan, 256 U. S. 94, 104, 112.” ¹⁵

We deem a West Virginia decision, which dealt with a before judgment garnishment, to be apposite. In Byrd v. Rector ¹⁶ the nonresident defendant, who had been garnished before judgment, argued that he had been denied due process because the plaintiff had not been required to post a bond before the garnishment. The court stated:

“We think the answer to these propositions is that a defendant is not deprived of his property by reason of the levy of a copy of the attachment upon a person who is indebted to him or who has effects in his custody belonging to the defendant. The most that such procedure does is to deprive defendant of the possession of his property temporarily by establishing a lien thereon. Whether the defendant shall be deprived of such property must depend of course upon the plaintiff’s subsequent ability to obtain a judgment in personam or in rem on his claim against the defendant. If, after having full opportunity to be heard in defense of such claim, a judgment is rendered thereon against the defendant or his property, there has been no lack of due process. In the meantime there has been no deprivation of property. The attachment, quasi rem in nature, has operated only to detain the property temporarily, to await final judgment on the merit’s [sic] of plaintiff’s claim. No constitutional right is impaired. McInnes v. McKay, (Me.) 141 Atl. 699. Until such judgment is obtained, the defendant’s property in the hands of a garnishee is immune from the plaintiff’s grasp. Under no circumstances could it be converted into cash and applied on the plaintiff’s demand prior to final adjudication of the merits of the controversy between plaintiff and defendant. Now, if pending such determination, the defendant is inconvenienced because he is temporarily deprived of the possession and use of his property in the hands of the garnishee, the defendant may acquire possession by giving bond, for which provision is made by Official Code, 38-7-20. We find no error under this point.” ¹⁷

In view of the aforecited authorities, we determine that Wisconsin’s garnishment before judgment statutes do not deprive appellant of her property without due process of law.

Failure of Garnishment Statutes to Afford Appellant an Immediate Hearing.

Sec. 267.16 (1), Stats., provides:

“No trial shall be had of the garnishment action until the plaintiff has judgment in the principal action and if the defendant has judgment the garnishment action shall be dismissed with costs.”

Appellant contends that the failure of the garnishment statutes to afford her an immediate hearing on the propriety of the garnishment constitutes a denial of due process. ¹

However, despite the fact that the garnishment statutes do not grant to appellant the right of judicial review of the propriety of the garnishment action prior to trial of the principal action, Wisconsin case law establishes that she can obtain such judicial review.

In Orton v. Noonan ¹⁸ the court stated in regard to garnishment before judgment:

“. . . the court, without the aid of any express statutory provision, has a general power to control and regulate the proceeding upon summary process of this nature, so as to correct or prevent any abuse or misuse of such process, and that the defendant may, in some proper form, contest the truth of the grounds alleged by the plaintiff for obtaining it.” ¹⁹

Thus the court’s power to control its process is inherent and requires no statutory authorization.

This court in Chernin v. International Oil Co.20 reaffirmed the right of a defendant to move to quash or dismiss the garnishment action to the point of a judicial ascertainment that a good-faith controversy exists. The procedure approved therein was a motion for summary judgment dismissing the garnishment action on the ground that the complaint in the principal action failed to state a cause of action “for damages founded upon contract” as required by then sec. 267.01 (3), Stats. Such requirement is now to be found in present sec. 267.02 (1) (a).

Thus potential abuses of garnishment before judgment are subject to judicial review before trial of the principal action. Moreover, a garnishment without probable cause can be the basis of a suit for malicious prosecution.²¹ We, therefore, find no denial of due process in the failure of the garnishment statutes to contain a provision for judicial review of the propriety of a garnishment action prior to trial of the principal action, inasmuch as such right exists independently of statute.

Assumption of Judicial Powers.

Sec. 267.04, Stats., provides in part as follows:

“(1) Upon payment to the clerk of court of a clerk’s fee of $2 and a suit tax of $1, the clerk shall issue a garnishee summons . . .

“(2) The garnishee summons shall be substantially in the following form:

“You are ordered to retain such property [belonging to the defendant] and make no payment, except for subsistence allowance if any, to the principal defendant pending the further order of the court.

((

“(3) A garnishment action shall be commenced by the service of a garnishee summons and annexed verified complaint.”

In regard to the complaint, sec. 267.05 (1), Stats., provides :

“The garnishee complaint in a garnishment action before judgment must allege the existence of one of the grounds for garnishment mentioned in s. 267.02 (1) (a), the amount of the plaintiff’s claim against the defendant, above all offsets, known to the plaintiff, and that plaintiff believes that the named garnishee is indebted to or has property in his possession or under his control belonging to the defendant (naming him) and that such indebtedness or property is, to the best of plaintiff’s knowledge and belief, not exempt from execution.”

The plaintiff must file with or mail to the clerk of court a copy of both the garnishee summons and complaint before serving the garnishee-defendant.²² We deem a more accurate statement of appellant’s position to be that the legislature has attempted to unconstitutionally vest judicial powers in an administrative officer.

This court in 1927 in State v. Van Brocklin ²³ upheld the constitutionality of a state statute which conferred power on a clerk of court to issue a search warrant upon determining probable cause against the contention that this violated art. VII, see. 2, Wis. Const. The court quoted with approval from the Alabama case of Kreulhaus v. Birmingham ²⁴ as follows:

“ ‘. . . it was not the intention of the framers of the Constitution to deny to the Legislature the power to confide to ministerial officers, who do not constitute a part of the judiciary, properly so called, many duties involving inquiries in their nature judicial.’ ” ²⁵

While some members of this court question some of the reasoning employed by the court to reach the result in State v. Van Broeklin, we approve of the holding that some duties involving inquiries judicial in their nature may be delegated to administrative officers where the acts of such officers are later subject to judicial review.

In Central Loan & Trust Co. v. Campbell²⁶ the United States Supreme Court considered the argument that a territorial statute of Oklahoma was void, because it allowed a probate judge to issue a writ of attachment, while the organic act of the territory vested all common law jurisdiction in the Supreme Court and District Courts of Oklahoma. The court rejected this argument, and stated:

“On the face of the Oklahoma statute it is apparent that it is required as a prerequisite to the issuance of an attachment that the affidavit, in support thereof, shall simply state the particular ground for attachment mentioned in the act, and therefore that the granting of an order for attachment does not involve the discharge of a judicial function, but merely the performance of a ministerial duty, that is, the comparison of the language of the affidavit with the terms of the statute ... It is elementary that where the ground of attachment may be alleged in the language of the statute, the authority to allow the writ need not be exercised by the judge of the court, but may be delegated by the legislature to an official, such as the clerk of the court.” ²⁷

As appears from the prior quotation herein from Coffin Brothers v. Bennett ²⁸ the United States Supreme Court also found unobjectionable the fact that the execution had been issued by the state superintendent of banks instead of a court. However, the court was there concerned with the due process clause of the fourteenth amendment rather than the issue of unconstitutional delegation of judicial power contrary to a state constitution.

We find no merit to appellant’s contention that sec. 267.04, Stats., violates art. VII, sec. 2, Wis. Const.

Denial of Equal Protection of the Laws.

Appellant’s brief asserts that the garnishment before judgment statutes subject wage earners to harsher summary process than other classes of debtors. However, any debtor, wage earner or not, is subject to these statutes. For example, bank accounts of businessmen and corporations are subject to garnishment before judgment. It may be argued generally that the effect of garnishment before judgment is harsher on wage earners than other classes of debtors. However, appellant has not set forth how these statutes, as applied to her own particular situation, have denied her equal protection of the laws. We decline to consider this argument of denial of equal protection in the absence of facts substantiating such contention.

Pending Legislation.

This court is fully cognizant of the fact that many undue hardships have resulted from the operation of Wisconsin’s before judgment garnishment statutes in the cases where wages and salaries of employees have been garnisheed. We are pleased that there is pending before the present legislature legislation that will remedy these abuses.

On November 14, 1967, the assembly passed by a vote of 89 to five Substitute Amendment No. 1, to Bill No. 454, which bars garnishment before judgment of the wages or salary of the principal defendant. The state senate now has this measure before it.

By the Court. — Order affirmed.

1 Sec. 267.18 (2) (a), Stats., provides: “When wages or salary are the subject of garnishment action, the garnishee shall pay over to the principal defendant on the date when such wages or salary would normally be payable a subsistence allowance, out of the wages or salary then owing, in the sum of $25 in the case of an individual without dependents or $40 in the case of an individual with dependents; but in no event in excess of 50% of the wages or salary owing. Said subsistence allowance shall be applied to the first wages or salary earned in the period subject to said garnishment action.”

2 Scharping v. Johnson (1966), 32 Wis. 2d 383, 395, 146 N. W. 2d 691; Joint School Dist. v. Boyd (1955), 270 Wis. 222, 226, 70 N. W. 2d 630; Milwaukee Boston Store Co. v. American Federation of Hosiery Workers (1955), 269 Wis. 338, 357, 69 N. W. 2d 762; Anderson v. State (1936), 221 Wis. 78, 89, 265 N. W. 210; State ex rel. Kellogg v. Currens (1901), 111 Wis. 431, 87 N. W. 561; 16 C. J. S., Constitutional Law, p. 226, sec. 76 (a).

3 Supra, footnote 2.

4 Id. at pages 442, 443.

5 (1928), 127 Me. 110, 141 Atl. 699.

6 Maine Rev. Stats. 1928, ch. 86, sec. 2.

7 Supra, footnote 6, at page 116.

8 (1902), 184 U. S. 334, 341, 22 Sup. Ct. 391, 46 L. Ed. 673.

9 (1928), 279 U. S. 820, 49 Sup. Ct. 344, 73 L. Ed. 975.

10 (1921), 256 U. S. 94, 41 Sup. Ct. 433, 65 L. Ed. 837.

11 (1928), 277 U. S. 29, 48 Sup. Ct. 422, 72 L. Ed. 768.

12 Supra, footnote 10, at pages 110, 111.

13 Supra, footnote 11, at page 81.

14 1 Wade, Attachment (1886), pp. 19-22, sec. 1.

15 Jackman v. Rosenbaum Co. (1922), 260 U. S. 22, 31, 43 Sup. Ct. 9, 67 L. Ed. 107. See also Frank v. Maryland (1969), 369 U. S. 360, 370, 79 Sup. Ct. 804, 3 L. Ed. 2d 877, in which Mr. Justice FRANKPURTER cites Jackman and Ownbey as to the legal significance of a long and consistent history of state practice.

16 (1932), 112 W. Va. 192, 163 S. E. 846.

17 Id. at page 198. See also 16 Am. Jur. 2d, Constitutional Law, p. 980, sec. 676.

18 (1871), 27 Wis. 672.

19 Id. at page 579.

20 (1952), 261 Wis. 308, 52 N. W. 2d 785.

21 Novick v. Becker (1958), 4 Wis. 2d 432, 90 N. W. 2d 620.

22 Sec. 267.10, Stats.

23 (1927), 194 Wis. 441, 217 N. W. 277.

24 (1909), 164 Ala. 623, 61 So. 297.

25 Id. at page 629.

26 (1899), 173 U. S. 84, 19 Sup. Ct. 346, 43 L. Ed. 623.

27 Id. at pages 96, 96.

28 Supra, footnote 11.

1 An earlier enactment, ch. 317, Laws of Wisconsin (1882), provided for an exemption of all wages for three months prior to the garnishment.