Bank of St. Louis v. Bridge Iron Co. , 147 Miss. 747 ( 1927 )

^* Corpus Juris-Cyc. References: Appearances, 4CJ, p. 1348, n. 92; Attachment, 6CJ, p. 477, n. 10; Banks and Banking, 7CJ, p. 836, n. 96; p. 837, n. 2. The appellee sued out an attachment in chancery under section 536, Code of 1906 (section 293, Hemingway's Code), making as defendants thereto the National City Bank of St. Louis, Mo., and the Jackson State National Bank of Jackson, Miss. The bill alleged, in substance, that S.J. Riley had a contract with the board of supervisors of Lowndes county and the state highway department, to do certain work, and executed to the appellee, for a valuable consideration, an assignment of all money to be paid to him thereunder; that subsequent thereto the state highway department issued to Riley a warrant on the state treasurer in the sum of two thousand two hundred six dollars and eleven cents as part payment on the work done by him, which warrant Riley delivered to the National City Bank of St. Louis, which forwarded it to the Federal Reserve Bank of St. Louis for collection, which bank credited the warrant to the National City Bank, and forwarded it through the regular channels to the Jackson State National Bank for collection, which bank now has the warrant or its proceeds; that the National City Bank, when it received and appropriated the warrant, knew that it had been assigned to the complainant, by reason whereof it is indebted to the complainant in the amount of the warrant.

The prayer of the bill is for a "decree adjudging the liability of the defendant National City Bank . . . to this complainant, and subjecting such effects or indebtedness in the hands of the Jackson State National Bank to complainant's demand."

The defendants appeared specially by motion to quash, challenged the jurisdiction of the court, and prayed that the bill be dismissed, the ground thereof being that, under section 5242 of the Revised Statutes of the United States (U.S. Compiled Statutes, section 9834), the court was without jurisdiction to proceed further with the case. That statute provides that — "No attachment, injunction or execution, shall be issued against such association [national bank] or its property before final judgment in any suit, action, or proceeding, in any state, county, or municipal court."

This motion was overruled, and an appeal to this court was granted.

Under the statute hereinbefore cited on which this suit is based, the local defendant, alleged to be indebted to the nonresident, absent, or absconding defendant, is in a position similar to that which he would have occupied had he been a garnishee in an attachment at law. As we understand the brief of counsel for the appellee, their contentions, in substance, are:

(1) That this suit is not an attachment within the meaning of the Federal statute, for the three reasons: (a) The Federal statute does not prohibit a garnishment against a national bank; (b) no property of the National City Bank of St. Louis has been seized; and (c) the appellee simply is trying to recover its own property, to which the National City Bank is a claimant.

(2) That, in event the attachment be discharged, the bill should not be dismissed, for the reason that the National City Bank has entered its appearance, thereby vesting the court below with jurisdiction to enter a personal decree against it.

It is true that the Federal statute does not prohibit a garnishment against a national bank, but the garnishee here is the Jackson State National Bank, and not the National City Bank of St. Louis.

Garnishment is a form of attachment by which property of a defendant in the hands of a garnishee, or a debt due a defendant by a garnishee, is seized and applied to the payment of the judgment recovered against the defendant.

The suit is not one for the recovery of specific property, and no such suit is authorized by the statute under which it was brought. The bill alleges, as it must have done to come within the terms of the statute, that the National City Bank is indebted to the complainant, the appellee here, in a certain amount, and that the Jackson State National Bank has in its hands effects of, or is indebted to, the National City Bank, and the object sought to be accomplished is the collection of this debt alleged to be due by the National City Bank to the appellee. The case, therefore, is clearly within the prohibition of the Federal statute. The case of Searles Bros. v. Smith Grain Co. et al.,80 Miss. 688, 32 So. 287, relied on by the appellee, is not in point. In that case the attachment was manifestly dealt with by the court as being primarily against Smith Grain Company; and the National Bank there involved was treated by the court, in the language of the opinion therein rendered, as "a mere claimant of the fund, intervening as such claimant, and preferring its claim." That case, therefore, did not come within the prohibition of the Federal statute. 7 C.J. 837, note 2.

This brings us to the appellee's contention, that the appearance of the National City Bank of St. Louis was a general appearance, and vested the court below with jurisdiction to render a personal decree against it. The motion to quash recites that the appearance of the two banks was "specially for the purpose of moving the court to quash the attachment and dismiss the suit for want of jurisdiction." No process was served on the National City Bank, and no personal jurisdiction over it was acquired by the court below by reason of the garnishment against the Jackson State National Bank. The National City Bank was in court solely because its property had been seized. It was not compelled to wait until final judgment and then contest the validity thereof, when its property should be attempted to be subjected to the payment of the debt alleged to be due the appellee by it; but it had the right to appear and object to the court's proceeding further with the condemnation of its property without thereby submitting itself to the jurisdiction of the court for any other purpose. 6 C.J. 477; Davis v. Cleveland, C., C. St. L.R.R. Co.,217 U.S. 157, 30 S.Ct. 463, 54 L.Ed. 708, 27 L.R.A. (N.S.) 823, 18 Ann. Cas. 907, and cases cited in note thereto at page 913.

Section 3946, Code of 1906 (section 2953, Hemingway's Code), has no application here. The motion to quash is not based on any defect in process or the service thereof, but is based on the want of power in the court below to proceed against the National City Bank by attachment before a judgment should be rendered against it.

The decree of the court below will be reversed, and the decree which it should have entered will be entered here; that is to say, the motion to quash will be sustained, and the bill of complaint will be dismissed. So ordered.

Sustained and dismissed.