First Finance Co. v. Pellum

338 N.E.2d 876, 62 Ill. 2d 86, 1975 Ill. LEXIS 325
CourtIllinois Supreme Court
DecidedSeptember 26, 1975
Docket47570
StatusPublished
Cited by19 cases

This text of 338 N.E.2d 876 (First Finance Co. v. Pellum) is published on Counsel Stack Legal Research, covering Illinois Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
First Finance Co. v. Pellum, 338 N.E.2d 876, 62 Ill. 2d 86, 1975 Ill. LEXIS 325 (Ill. 1975).

Opinions

MR. JUSTICE GOLDENHERSH

delivered the opinion of the court:

Plaintiff First Finance Company, judgment creditor of defendant Donald L. Pellum, instituted this wage-deduction proceeding in the circuit court of Cook County against defendant’s employer, the Department of Mental Health of the State of Illinois, pursuant to “An Act relating to wage deductions for the benefit of creditors and regulating the issuance of deduction orders” (Ill. Rev. Stat. 1973, ch. 62, par. 71 et seq.). The Department moved to quash the wage-deduction summons and to dismiss the proceeding. The circuit court denied the motion, and in its order made findings in accordance with Rule 308. The appellate court allowed an appeal from the order, and we granted the Department’s motion for direct appeal to this court. Rule 302(b).

Prior to our decision in Henderson v. Foster, 59 Ill.2d 343, it was generally accepted that the wages of governmental employees were not subject to garnishment. (See 20 Ill. L. & Pr. Garnishment sec. 11 (1956); 1917-18 Ill. Att’y Gen. Biennial Rep. 739; 1933 Ill. Att’y Gen. Op. 712; Merwin v. City of Chicago, 45 Ill. 133; Badenoch v. City of Chicago, 222 Ill. 71.) In Henderson, which involved a wage-deduction, proceeding against the Urbana Park District, a municipal corporation, as employer of defendant Foster, this court said: “Neither our constitution nor our statutes have granted municipal corporations immunity from garnishment. Rather this immunity has in the past been a doctrine created by this court. In Merwin v. City of Chicago (1867), 45 Ill. 133, this court first held that municipal corporations were not subject to garnishment because of public policy. It was felt that a municipal corporation could not be properly turned into an instrument or agency for the collection of private debts because the efficiency of government would thus be impaired and inconvenienced.” 59 Ill.2d 343, 348.

We also said: “We agree with appellant’s final contention that there is simply no rational basis for distinguishing between a governmental employer and a private employer with respect to the operation of the Wage Deduction Act. The immunity from such actions is of judicial origin and can therefore be abolished by this court. We find little logic in allowing suits against governmental bodies in tort or contract, and yet still denying actions in garnishment or under the Wage Deduction Act. We find that the doctrine of wage-garnishment immunity is unsound and unjust under present conditions and consider that we must abolish that immunity.” (59 Ill.2d 343, 350.) Apparently inspired by this latter statement a number of wage-deduction proceedings have been filed against the State and have been stayed pending the decision of this case.

Although Henderson has resolved the question with respect to local government units, the parties have not cited, nor have we found, a case in which the State was a party, and the court-created doctrine of governmental immunity from garnishment was invoked. Our rejection in Henderson of the public policy argument as to governmental immunity from garnishment applies as well here and need not be repeated. This brings us to the question whether the grant of such immunity to the State is to be found in either the Constitution or any statute.

Citing Federal cases the Department contends that “A suit brought in circuit court which has as its object to compel action of a co-equal branch of government is not justiciable:” The rationale of those cases is that the funds still in possession of the sovereign are the property of the sovereign until paid, and absent the consent of the sovereign are not subject to garnishment. (See United States v. Krakover (10th Cir. 1967), 377 F.2d 104; Lawhorn v. Lawhorn (S.D.W. Va. 1972), 351 F. Supp. 1399.) We do not find those cases persuasive. Section 4 of article XIII of the 1970 Illinois Constitution provides: “Except as the General Assembly may provide by law, sovereign immunity in this State is abolished.” The question, therefore, is not whether the General Assembly has waived immunity, but whether it has statutorily granted such immunity. Henderson v. Foster, 59 Ill.2d 343, 349.

The Department contends that the State is immune from a wage-deduction proceeding under “An Act in relation to immunity for the State of Illinois,” effective January 1, 1972 (Ill. Rev. Stat. 1973, ch. 127, par. 801), which provides: “Except as provided in ‘An Act to create the Court of Claims, to prescribe its powers and duties, and to repeal An Act herein named,’ filed July 17, 1945, as amended, the State of Illinois shall not be made a defendant or party in any court.” It is plaintiff’s position that the word “person” as used in the Wage Deduction Act and as construed by this court in Henderson (59 Ill.2d 343, 347) includes the State of Illinois and that the Immunity Act does not apply to a wage-deduction proceeding. Citing Williams v. Medical Center Com., 60 Ill.2d 389, the Department responds that by enactment of the Immunity Act the State has chosen to assert its constitutionally authorized sovereign immunity and that “waiver of a constitutional right accorded the State of Illinois is not to be inferred in the absence of clear and unmistakable statutory language.”

In Henderson, we said: “ ‘Person’ is not defined in the Wage Deduction Act itself. However, in ‘An Act to revise the law in relation to the construction of the statutes’ (Ill. Rev. Stat. 1971, ch. 131, par. 1.05) it is stated that the word ‘person’ is to be applied ‘to bodies politic and corporate as well as individuals. ’ We are dealing with a statutory remedy and, unless expressly excluded, it would seem that park districts come within the terms of the statute as bodies politic. With reference to the Wage Deduction Act, we have said that ‘garnishment process is purely a creature of statute [citation] and the setting of its dimensions is a matter for the legislature.’ (Taylor v. Taylor (1969), 44 Ill.2d 139, 144.) The legislature has specifically exempted particular retirement and pension funds of public employees from garnishment and similar proceedings. (E.g., Ill. Rev. stat. 1971, ch. 108½, pars. 4 — 135, 18 — 161.) The General Assembly did not exempt local governmental units or park districts in particular from the operation of the Wage Deduction Act.” 59 Ill.2d 343, 347.

The General Assembly recently rejected an attempt to exempt the State, school districts and units of local government from the operation of the Wage Deduction Act. On May 18, 1975, after our decision in Henderson and while this case was pending, House Bill 940 was passed by the House of Representatives. This bill, styled “An Act to amend Section 13 of ‘An Act relating to wage deductions for the benefit of creditors and regulating the issuance of deduction orders’, approved.June 19, 1961, as amended,” provided inter alia, “All wages, salary amounts or other compensation paid by the State, any unit of local government or school district to any of its employees are exempt and not subject to collection under a deduction order.” On June 26, 1975, the Senate passed an amendment deleting this provision from House Bill 940. On June 28, 1975, the House of Representatives concurred in the Senate amendment, and on the same day House Bill 940 was passed by both houses of the General Assembly.

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First Finance Co. v. Pellum
338 N.E.2d 876 (Illinois Supreme Court, 1975)

Cite This Page — Counsel Stack

Bluebook (online)
338 N.E.2d 876, 62 Ill. 2d 86, 1975 Ill. LEXIS 325, Counsel Stack Legal Research, https://law.counselstack.com/opinion/first-finance-co-v-pellum-ill-1975.