Wanex v. Provident State Bank

Per Curiam. This appeal arises out of an attachmeAt proceeding by Provident State Bank, appellee, to garnish the assets of Richard and Beverly Wanex, appellants. The assets were held by the appellee bank in a checking account. The Circuit Court for Dorchester County (Edmondson, J.) refused to quash the writ of garnishment and directed entry of a judgment of condemnation on the attachment.

We shall affirm. ⁴¹¹ I Richard Wanex was engaged in the business of selling and repairing tractor trailers. He used various trade names in the business such as "Dick Wanex Truck and Trailer” and "Dick Wanex Trailer Sales and Repair.” In 1967, Richard Wanex opened a business checking account with Provident State Bank under the name of "Dick Wanex Truck and Trailer.” In April of 1980, this account was made subject to a signature card which authorized Richard Wanex, Beverly Wanex, or Renee Wanex to sign checks drawn on the account. Renee Wanex, who was twenty-one years old at the time of trial, is the daughter of Richard and Beverly Wanex. She was employed as a secretary 1 by her father in his business.

Because Renee Wanex received only a small salary of seventy-five dollars ($75) per week, she was allowed to make withdrawals from the account for her necessities. Although she deposited her 1980 personal income tax refund check in the account and had co-signed 2 a ten thousand dollar note, the proceeds of which were deposited in the account, in 1980 Renee Wanex did not deposit any personal funds in the Provident State Bank account. Dick Wanex Truck and Trailer was neither a corporation nor a partnership, but rather was a sole proprietorship owned by Richard Wanex. 3 The checks printed for the use of the bank account were in the name of Richard Wanex. In 1978, Richard and Beverly Wanex jointly signed a promissory note made payable to the appellee bank as a business loan.

A second note was executed that year by appellants for the same purpose. Subsequently appellants ⁴¹² were in default and a judgment was entered against them in favor of appellee. On November 21, 1980, appellee filed instructions to the clerk to issue a writ of attachment upon the judgment. Thereafter, on December 2,1980, a writ of garnishment was issued and on December 4 the appellee bank was served.

Between December 4 and December 8 Richard Wanex made four deposits into the subject account; the funds were generated from his business operation. The checks comprising the four deposits were made payable to "Dick Wanex” or "Dick Wanex Trailer Repair.” 4 On December 8, 1980, appellee notified Richard Wanex of the garnishment and that the account had been frozen. Beverly Wanex was served with process in the attachment proceeding on December 31, 1980 and Richard Wanex was served the following day. Renee Wanex was not served until November 17, 1981.

Appellants filed a motion to quash the attachment. The court below refused to grant appellants’ motion and entered a judgment of condemnation on the attachment. Appellants challenge the decision of the trial court on two grounds. First, they argue that the attachment was invalid in that it interfered with Renee Wanex’s vested rights of ownership in the subject account because she was not a judgment debtor in the original action against appellants.

Secondly, appellants claim that as "defendants” in the original action they were entitled to service of process in the post-judgment attachment proceeding prior to the actual garnishment. 5 ⁴¹³ II In addressing the first issue raised by appellants, we note that our review of the trial judge’s findings is governed by Rule 1086. "When an action has been tried by the lower court without a jury, this Court will review the case upon both the law and the evidence, but the judgment of the lower court will not be set aside on the evidence unless clearly erroneous and due regard will be given to the opportunity of the lower court to judge the credibility of the witnesses.” The lower court, in the case at bar, was not clearly erroneous in finding that Renee Wanex did not have an ownership interest in the Provident State Bank checking account. There was sufficient evidence before the court to conclude that it was an individual business account owned by Richard Wanex and maintained incident to the operation of his sole proprietorship, Dick Wanex Truck and Trailer. In merely permitting his daughter to withdraw money for her personal needs or authorizing her, as an employee, to sign checks drawn on the account, Richard Wanex did not relinquish his ownership rights in favor of Renee Wanex.

"Funds of defendant on deposit in a bank are subject to garnishment in the absence of special circumstances creating an exemption. However, the garnishing creditor can reach funds of the depositor only in cases where the depositor is the true owner thereof. For the purposes of garnishment a bank deposit prima facie belongs to the person in whose name it stands, the general test being whether, but for the garnishment, the deposit would be subject to defendant’s check, or whether defendant could sue the bank therefor in debt or assumpsit. These considerations, however, are not conclusive, and the fact that the depositor can withdraw or maintain an action for the deposit does not in all cases render the ⁴¹⁴ deposit subject to garnishment at the instance of a creditor of the depositor.” 38 C.J.S. Garnishment § 80 (1943) (footnotes omitted).

Furthermore, Renee Wanex did not deposit any personal funds in the account in 1980 as evidence of her ownership. The deposit of the proceeds of the promissory note which she co-signed did not necessarily mean that she held an ownership interest in the checking account. The note represented a business loan to the sole proprietorship owned by Richard Wanex. There was sufficient evidence that Dick Wanex Truck and Trailer was not a family partnership 6 nor ⁴¹⁵ a corporation with clearly defined percentages of ownership interest inuring to each partner or stockholder.

Accordingly, the trial court was not clearly erroneous in finding that the garnishment was proper because Renee Wanex had no vested rights of ownership in the Provident State Bank account. III Appellants argue that the Maryland Rules of Procedure require service of process upon the judgment debtor in a post-judgment garnishment proceeding. We disagree. Maryland Rule F 1 provides: RULE FI — Subsequent Procedure.

"Where an attachment on a judgment shall have been issued pursuant to this Subtitle, it shall be served pursuant to Rule G 47 (Service of Writ-Garnishment) and the procedure shall conform to the provisions of Section d of Rule G 42 (Documents to Be Filed — Instructions to the Sheriff) and Rules G 51 (Motion to Quash), G 52 (Appearance of Garnishee), G 56 (Interrogatories to Garnishee-Notice-Failure to Answer), G 57 (Dissolution of Attachment), G 58 (Claimant of Property Attached), and G 60 (Sale of Attached Property).” (Emphasis added.) Maryland Rule G 47 provides: "Rule G 47. Service of Writ-Garnishment. a. Service on Garnishee. A Writ of attachment by way of garnishment may be served upon a person having property or credits belonging to the defendant. ⁴¹⁶ b.

Notice to Garnishee. A Writ of attachment by way of garnishment shall comply substantially with section e (f) of Rule 103 (Process-Issuance-Return) and shall notify each person upon whom it is served to appear before the court within the time set forth in Rule 307 (Time for Defendant’s Initial Pleading) and show cause why the property or credits so attached should not be condemned.” Neither Rule F 1 nor Rule G 47 expressly require service of a writ of garnishment on the judgment debtor. Appellants suggest, however, that service upon the judgment debtor is constitutionally mandated and arises by direct implication under Rule G 51. The constitutionality of post-judgment attachment procedures without notice to the judgment debtor was addressed in Endicott Johnson Corp. v. Encyclopedia Press, Inc., 266 U.S. 285 (1924). 7 In that case, the Supreme Court held that a New York law which permitted a judgment creditor to garnish a debtor’s wages without affording him prior notice or an opportunity to be heard did not violate the Due Process Clause of the Fourteenth Amendment.

Justice Sanford, writing for the Court, stated, "[T]he established rules of our system of jurisprudence do not require that a defendant who has been granted an opportunity to be heard and has had his day in court, should, after a judgment has been rendered against him, have a further notice and hearing before supplemental proceedings are taken to reach his property in satisfaction of the judgment. Thus, in the absence of a statutory requirement, it is not essential that he be given notice before the issuance of an execution against his ⁴¹⁷ tangible property; after the rendition of the judgment he