LAWRENCE V. FORD MOTOR CREDIT CO , 247 Ark. 1125 ( 1970 )

ARR.] LAWRENCE V. FORD MOTOR CREDIT CO. 1125
M. T. LAWRENCE v. FORD MOTOR CREDIT
COMPANY AND BENTON STATE BANK
5-5166 449 S. W. 2d 695Opinion delivered February 2, 1970
1. JUDGMENT—FINAL JUDGMENT—STATUTORY REQUIREMENTS.—"Judg-
ment" entered against garnishee pertaining to disposition of
funds held by it which did not specify amount due was not
a final judgment under the statute which provides for judg-
ment against a garnishee after answer and determination of
issues made by the pleadings for the amount due from the
garnishee to the defendant in the original judgment or so much
thereof as will be sufficient to satisfy plaintiff's judgment
with costs. [Ark. Stat. Ann. § 31-509 (Repl. 1962)1
2. JUDGMENT—FORMAL REQUISITES.—A judgment must be tested by
substance and not form.
3. JUDGMENT—FINAL JUDGMENT—CERTAINTY OF DETERMINATION.—A
judgment for money must. be a final determination of the rights
of the parties in an action, must specify the amount the de-
fendant is required to pay, and must be capable of enforcement
by execution or other appropriate means.
4. GARNISH MENT—NATURE OF CAUSE OF ACTION.—A garnishment
is only a species of attachment and service of a writ of garnish-
ment upon a debtor is an attachment of the debt or a form
of levy thereupon.
5. GARNISH MENT—INTERVENTION—STATUTORY PROVISION S.—Interven-
tion by an adverse claimant of a debt owed by garnishee was
1126 LAWRENCE V. FORD MOTOR CREDIT Co. [247
permissible even though he could have sought a remedy against
the garnishee in an independent action. [Ark. Stat. Ann. §
31-157 (Repl. 1962).]
6. GARNISH M ENT—I NTERVENTION--RIGH TS OF PARTIES.—Once an in-
tervention was filed, as permitted by statute, garnishee could
have protected itself only by paying the funds into the court.
7. GARNISH MENT—DI SCH ARGE OF GARNISHEE —RIGH TS UNDER STAT-
uTE.—Under the statutes, when the amount due from a gar-
nishee is determined and surrendered he should be discharged.
[Ark. Stat. Ann. § 31-509, and § 31-511 (Repl. 1962).]
8. GARNISH MENT--OPFRATION & EFFECT. —An order made by the
court upon a garnishee to pay money is not a judgment against
him and does not determine his liability but only confers upon
the attaching creditor of the garnishee's creditor the same right
to collect what the garnishee may owe the attached creditor
that the latter had against the garnishee.
Appeal from Saline Circuit Court, Henry B. Means,
Judge; affirmed.
Langston & Langston, for appellant.
Griffin Smith., for appellees.
JOHN A. FOGLEMAN, Justice. M. T. Lawrence ap-
peals from judgments entered in an action on a promis-
sory note brought by him against one W. A. Williams,
who operated a Ford automobile dealership as Williams
Ford Company.' He asserts that there was error in per-
mitting Benton State Bank to intervene and in denying
his motion to strike and dismiss the intervention. He
also contends that the court erred in discharging the
garnishee, Ford Motor Credit Company. No other issue
is raised on this appeal. The major premise of both
points for reversal is that a "consent judgment" en-
tered relative to a garnishment issued against the credit
company in the original action constituted a final judg-
ment against the garnishee and was conclusive as to the
rights of Lawrence in funds later paid into court by the
garnishee.
'While it appears that this company was a corporation, allega-
tions by appellant that the corporation was the alter ego of Wil-
liams and that assets of the corporation should be applied to his
debts do not seem to be controverted.
ARK.] LAWRENCE V. FORD MOTOR CREDIT Co. 1127
Since we do not agree with appellant a review of
the history of the litigation is necessary. By a written
instrument dated August 11, 1965, Benton State Bank
was assigned all sums belonging or which might become
payable, to Williams Ford Company, from a reserve
account established by Ford Motor Credit Company.
Lawrence filed suit against Williams on August 30, 1965,
and caused the issuance of a garnishment against Ford
Motor Credit Company. The date of service of this writ
does not appear, but an answer denying the existence
of any indebtedness to Williams was verified on Septem-
ber 15, 1965, and filed two days later. Upon traverse of
• this answer by appellant, propounding additional inter-
rogatories, the garnishee on October 14 filed a supple-
mental answer. In this answer the credit company ad-
mitted that it held $20,353.15 to the credit of Williams
Ford Company representing dealer reserves and excise
tax refunds, an estimated $4,800 in factory credits from
Ford Motor Company and $1,997.12 in dealer funds, all
as security for contingent liabilities of Williams Ford
Company on paper hypothecated to garnishee with re-
course, and a continuing guaranty of the debts of Wil-
liams Ford Company by Williams.
In the meantime, judgment against Williams in fav-
or of Lawrence for $11,685.22 had been filed on October
5. On November 8, 1965, a court order labeled "judg-
ment" was made and filed. By its terms, the garnishee
was ordered to hold the funds described in its supple-
mental answer, apply them pursuant to agreements with
Williams Ford Company, and, when all its claims there-
against were liquidated to pay any excess first to Lawr-
ence, and then to Williams, when and if the claim of
Lawrence was satisfied.' On April 16, 1966, appellant
propounded additional interrogatories to the garnishee
asking an accounting for the funds it had held. The rec-
ord does not reflect any answer by the credit company.
2 This order recited that both Williams and Williams Ford Com-
pany authorized the action there taken by letter attached to the
supplemental answer. The letter does not appear in the record.
1128 LAWRENCE V. FORD MOTOR CREDIT Co. (247
No other action was taken until March 19, 1969,
when Benton State Bank filed its complaint in inter-
vention, asserting ownership of any balance of the funds
in question by reason of the assignment previously
mentioned. Its motion for intervention was granted the
following day. On May 21, 1969, Lawrence filed a mo-
tion to dismiss and strike the intervention. He asserted
that the intervention was untimely because filed 31/2
years after judgment had been entered against the
garnishee.
The garnishee then paid $4,078.70 into the registry
of the court and filed its motion for discharge on June
4, 196), which was granted by the court on the same day.
On June 19 the court denied appellant's motion to dis-
miss and strike the intervention. On August 13, 1969,
both parties moved for summary judgment. The motion
of Benton State Bank was granted.
We do not agree with appellant in his assumption
that the "judgment" entered on November 8, 1965, con-
stituted a final judgment against the garnishee! Arkan-
sas Statutes Annotated § 31-509 (Repl. 1962) provides
for judgment against a garnishee after answer and de-
termination of issues made by the pleadings "for the
amount due from the garnishee to the defendant in the
original judgment or so much thereof as will be suffi-
cient to satisfy the plaintiff 's judgment, with costs." It
is clear that the judgment must specify the amount to
be paid. The "judgment" entered was not a "final
judgment." In Thomas v. McElroy, 243 Ark. 465, 420
S. W. 2d 530, we said that a judgment must be tested
by substance and not form. We held that a judgment
for money must be a final determination of the rights
of the parties in an action, must specify the amount the
defendant is required to pay, and must be capable of
enforcement by execution or other appropriate means.
Here, there was never a time, prior to the intervention,
3 1n view of the disposition made of this case, we express no
opinion whether these funds, under the circumstances, were subject
to garnishment.
ARK.] LAWRENCE V. FORD MOTOR CREDIT Co. 1129
when the court could have specified the amount due, or
when an execution or other such writ could have been
issued.'
Arkansas Statutes Annotated § 31-157 (Repl. 1962)
permits any person disputing the validity of an attach-
ment, or stating a claim to, interest in, or lien upon at-
tached property to present his complaint at any time be-
fore the payment to the plaintiff of the proceeds of an
attached debt. There can be no doubt about the applica-
bility of this statute to this case. A garnishment is only
a species of attachment. Allen v. Stracener, 214 Ark.
688, 217 S. W. 2d 620. Service of a writ of garnishment
upon a debtor is an attachment of the debt or a form
of levy thereupon. Moore v. Kelley, 47 Ark. 219, 1 S. W.
97. Once the intervention was filed, as permitted by the
statute, the credit company could have protected itself
only by paying the fund into court.
What we have heretofore said also disposes of ap-
pellant's argument that the intervention was not per-
missible because the bank could have sought a remedy
against the credit company in an independent action.
The question is not whether it might have done so. It is
whether the intervention was erroneously permitted.
Arkansas Statutes Annotated § 31-509 (Repl. 1962)
provides that if issues made by a garnisher's pleading
controverting the garnishee's answer are found for the
garnishee he shall be discharged without further pro-
ceedings. Arkansas Statutes Annotated § 31-511 (Repl.
1962) provides that if the garnishee shall surrender the
entire amount due upon the return day, he shall be dis-
charged with costs. Until Williams Ford Company's
ultimate liability to Ford Motor Credit Company was
finally determined, the garnishee was under no obliga-
tion to pay over any funds. The clear implication of the
statutes is that when the amount due from the garnishee
is determined and surrendered, he should be discharged.
4At one time it was held that a personal judgment could not
be entered against a garnishee in the original proceeding. See
Nelson v. Blanks, 67 Ark. 347, 56 S. W. 867.
1130 [247
We cannot say that the garnishee was not entitled
to be discharged upon paying the fund into court con-
sidering the circumstances existing here and the lan-
guage of the court order of November 8, 1965. An order
made by the court upon a garnishee to pay money is
not a judgment against him and does not determine his
liability. It only confers upon the attaching creditor of
the garnishee's creditor the same right to collect what
the garnishee may owe the attached creditor that the
latter had against the garnishee. Penyan v. Berry, 52
Ark. 130, 12 S. W. 241. The "judgment" of November
8, 1965, cannot be anything more than an order to the
garnishee th pay over an indeterminate amount of
money.
In the judgment of August 13, there was a finding
by the circuit court that notice of the assignment was
given the garnishee on September 17, 1965. As to the
points raised, this finding is of no significance because
we find absolutely nothing in the record to support it,
because the bank was not a party to the action at that
time, and because no funds had been paid in or judg-
ment rendered against the garnishee.
The judgment is affirmed.