APPEAL from the Circuit Court of Cook County; the Hon. RAYMOND
S. SARNOW, Judge, presiding.
MR. JUSTICE MCGLOON DELIVERED THE OPINION OF THE COURT:
Plaintiff Gerald Shrader obtained a default judgment against defendant Leo Maultz for damages arising out of an automobile collision. Plaintiff successfully filed an affidavit of garnishment and summons on defendant's bank account for the amount of the judgment. The account consisted solely of funds derived from defendant's pension under the Railroad Retirement Act.
Defendant's motion to dismiss the garnishment was denied. Also dismissed was defendant's subsequent motion to reconsider. On appeal, defendant argues that the trial court erred in garnishing his pension inasmuch as it is exempt from garnishment under the provisions of the Railroad Retirement Act.
The facts are not disputed. On April 21, 1976, plaintiff Gerald Shrader obtained a default judgment against defendant Leo Maultz in the amount of $589.94 plus costs. The lawsuit arose out of an automobile collision between the parties. On October 1, 1976, plaintiff filed an affidavit of garnishment and summons on the garnishee Bridgeview Bank for $533.71. Judgment was entered in favor of plaintiff and defendant moved to dismiss the garnishment.
In his motion to dismiss, defendant argued that the funds held by the garnishee bank were exempt from garnishment since they consisted solely of a pension received by defendant under the Railroad Retirement Act of 1937 (45 U.S.C. § 228(a) et seq. (1970)) and that this was his only source of income. Nevertheless, relying on Commonwealth v. Berfield (1947), 160 Pa. Super. 438, 51 A.2d 523, the trial court held that the exemption did not apply to benefits actually paid to the recipient.
The Railroad Retirement Act of 1937, under which defendant receives his pension, provides in part:
"[N]o annuity or supplemental annuity shall be assignable or be subject to any tax or to garnishment, attachment or other legal process under any circumstances whatsoever * * *." (45 U.S.C. § 231 (m) (Supp. IV 1974).)
The sole question is whether the cited section affords protection to benefits that have been paid to the recipient. We believe that it does.
In 1974, Congress amended the Railroad Retirement Act so as to eliminate the possibility that a person might simultaneously receive benefits under the Railroad Retirement Act and the Social Security Act. (Act of October 16, 1974, Pub. Law 93-445, 88 Stat. 1305.) Scrutinizing the legislative history of the amendment, it is clear that the two systems are to be integrated. The Senate Report provides:
"A major purpose of the new Railroad Retirement Act is to eliminate with respect to future service the `windfall' element in cases where benefits are payable to a single individual under both the Railroad Retirement Act and the Social Security Act. To accomplish this purpose, subsection (m) of section 3 provides that the social security level component of an employee's annuity * * * will be reduced by the amount of any monthly insurance benefit which the employee actually receives under the Social Security Act. Thus railroad employees, like employees, like employees in other major private industries, will, in the future receive retirement benefits * * * supplemental to, rather than additional to, social security benefits." (3 U.S. Cong. & Adm. News 5738 (1974).)
With this in mind, the protection afforded recipients under the Railroad Retirement Act must be analyzed in terms of the protection afforded recipients under the Social Security Act.
In Philpott v. Essex County Welfare Board (1973), 409 U.S. 413, 34 L.Ed.2d 608, 93 S.Ct. 590, the Supreme Court held that the Social Security Act (42 U.S.C. § 301 et seq. (1970)) barred the State of New Jersey from garnishing Federal disability insurance paid to the plaintiff and deposited in his bank account. That case also involved the interpretation of a statute exempting pension benefits from garnishment:
"The right of any person to any future payment under this subchapter shall not be transferable or assignable, at law or in equity, and none of the moneys paid or payable or rights existing under this subchapter shall be subject to execution, levy, attachment, garnishment, or other legal process, or to the ...