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Commonwealth Loan Co. v. Baker

MARCH 23, 1966.




Appeal from the Circuit Court of Third Judicial Circuit, Madison County; the Hon. MICHAEL J. KINNEY, Judge, presiding. Reversed and remanded.


Rehearing denied March 23, 1966.

February 4, 1966. Supplemental Opinion,

Commonwealth Loan Company, plaintiff-appellant, obtained judgment by confession against James W. Baker in the amount of $771.68 and costs of suit, and then served a garnishment summons upon garnishee-appellee, General Steel Industries, Inc. General Steel Industries, Inc. was indebted to Baker in an amount in excess of the judgment for money which came from a private group insurance plan.

Commonwealth Loan Company caused a citation writ to discover assets to be served upon General Steel Industries, Inc. Upon the hearing thereof, on July 9, 1964, Baker contended that the funds being held by General Steel Industries, Inc. were exempt from garnishment under provisions of Illinois Revised Statutes, chapter 52, section 13, Second which exempts from execution;

"For one year after the receipt thereof all money received by any person a resident of this State as a pension, adjusted or additional compensation or a bonus from the United States Government or from the State of Illinois on account of military or naval service, whether the same shall be in the actual possession of such person or deposited or loaned;".

The record shows that defendant-appellee Baker had, up until September 26, been an employee of the garnishee-appellee and had $800 credit there which he called "my retirement money" and testified that the money was from a group insurance plan, it being contributed by the employer and was to be held until six months before his retirement and to be paid over to him in October of 1964. At the close of the hearing, the court took the matter under advisement.

It is uncontroverted that both the file and the docket sheet were inadvertently kept in the Judge's Chambers until either November 5 or 6, 1964. Appellant's counsel's affidavit, attached to his petition for leave to appeal, states that he had on several occasions between July 22, 1964, and November 5, 1964 checked with the Clerk to ascertain as to whether there had been a ruling, and that on each such occasion he was advised that neither the file nor the docket sheet had been returned; further that on November 5, 1964 he contacted the court directly and asked if a ruling might be forthcoming in the near future, and that on the following day, November 6, 1964, the undersigned was advised that ruling had been made on July 22, 1964. The affidavit further stated that the Court inadvertently failed to instruct the Clerk previous to the November date to notify the parties of his ruling.

The record shows that on the 22nd day of July, 1964, the court had entered the following order:

"Now on this day the court having received the memorandum of authorities and being fully advised in the premises does hold that the defendant James W. Baker is entitled to the exemption provided by Chapter 52 Section 13 Paragraph 2 Illinois Revised Statutes and that it ordered that his employer General Steel Industries, Inc., a Corporation Granite City, Illinois turn over to the defendant James W. Baker such sums as are in their custody standing in his name or credited to his account without regard to any Garnishment proceedings now pending."

The facts stated in appellant's counsel's affidavit are not disputed.

The petition for leave to appeal was granted after the filing of a motion to dismiss on behalf of General Steel Industries, Inc., which stated that said appellee on or about the 22nd day of August, 1964, received notice of the order of the trial court and that pursuant to the said order General Steel Industries, Inc. had delivered the funds to Baker, the defendant-appellee, and that this appellee was thus acquitted and released from any further proceedings in this cause. Objections to the motion urge that the motion did not state grounds for which the petition for leave to appeal might be dismissed but only sought to respond to the petition, and that the motion failed to comply with Rule 21 of this court with reference to the printing of responses to petitions for leave to appeal. This court took the motion with the case and the garnishee-appellee subsequently filed a statement, brief, and argument.

Garnishee-appellee contends that after an order is entered upon a garnishee it is the duty of the garnishee to transfer the garnished fund to the person entitled thereto without regard to potential unperfected appeal rights, citing Genden v. Bailen, 275 Ill. App. 382, and Chicago Title & Trust Co. v. La Porte Bldg. Corp., 274 Ill. App. 335, and further argues that a garnishee who refuses or neglects to comply with the order of the court may be attached and punished for contempt, citing Illinois Revised Statutes 1963, chapter 62, sec 47 and Framheim v. Miller, 241 Ill. App. 328. He further argues that in each of those cases the appeal period had expired, and that the court had to determine the liability of a garnishee after expiration of appeal, but before the expiration of the writ of error period, and conceding that writ of error practice has been abolished and writ of appeal procedure has been substituted therefor, argues that the garnishment laws should not be unduly disrupted merely because the former writ of error practice has been supplanted by writ of appeal procedure, and suggests that should this Court grant relief to the appellant herein, garnishees throughout the State would be placed on notice to forbear from complying with trial court orders until expiration of the period within which a petition for appeal will lie. Appellee makes no pretense that the order of the trial court was correct.

Plaintiff-appellant contends that the plain language of the Statute cited above clearly grants an exemption to pensions, etc., received from the United States Government or the State of Illinois on account of military service and points out that the money which the garnishee held in this case came from a private group insurance plan and is not included among the exemptions granted by the Statute. Appellant further points out that the garnishee was a party to the litigation, having been duly served with process; that although the file and docket sheet were not in the Clerk's office, but were in the trial court's chambers, the defendant and garnishee somehow learned of the order and early in September 1964, without giving the plaintiff-appellant any notice, the garnishee paid the defendant Baker the money it held, pointing out that the payment was made within the sixty-day period, when it knew that plaintiff still had the right to ...

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