MR. JUSTICE WHITE delivered the opinion of the Court.
Under the statutes of the State of Georgia, plaintiffs in pending suits are "entitled to the process of garnishment."
On August 20, 1971, respondent filed suit against petitioner in the Superior Court of Whitfield County,
The Georgia court recognized that Sniadach v. Family Finance Corp., 395 U.S. 337 (1969), had invalidated a statute permitting the garnishment of wages without notice and opportunity for hearing, but considered that case to have done nothing more than to carve out an exception, in favor of wage earners, "to the general rule of legality of garnishment statutes." 231 Ga., at 264, 201 S. E. 2d, at 323. The garnishment of other assets or properties pending the outcome of the main action, although the effect was to " `impound [them] in the hands of the garnishee,' " id., at 263, 201 S. E. 2d, at 323, was apparently thought not to implicate the Due Process Clause.
This approach failed to take account of Fuentes v. Shevin, 407 U.S. 67 (1972), a case decided by this Court
The Georgia statute is vulnerable for the same reasons. Here, a bank account, surely a form of property, was impounded and, absent a bond, put totally beyond use during the pendency of the litigation on the alleged debt, all by a writ of garnishment issued by a court clerk without notice or opportunity for an early hearing and without participation by a judicial officer.
Nor is the statute saved by the more recent decision in Mitchell v. W. T. Grant Co., 416 U.S. 600 (1974). That case upheld the Louisiana sequestration statute which permitted
The Georgia garnishment statute has none of the saving characteristics of the Louisiana statute. The writ of garnishment is issuable on the affidavit of the creditor or his attorney, and the latter need not have personal knowledge of the facts. § 46-103. The affidavit, like the one filed in this case, need contain only conclusory allegations. The writ is issuable, as this one was, by the court clerk, without participation by a judge. Upon service of the writ, the debtor is deprived of the use of the property in the hands of the garnishee. Here a sizable bank account was frozen, and the only method discernible on the face of the statute to dissolve the garnishment was to file a bond to protect the plaintiff creditor. There is no provision for an early hearing at which the creditor would be required to demonstrate at least probable cause for the garnishment. Indeed, it would appear that without the filing of a bond the defendant debtor's challenge to the garnishment will not be entertained, whatever the grounds may be.
Enough has been said, we think, to require the reversal of the judgment of the Georgia Supreme Court. The case is remanded to that court for further proceedings not inconsistent with this opinion.
MR. JUSTICE STEWART, concurring.
It is gratifying to note that my report of the demise of Fuentes v. Shevin, 407 U.S. 67, see Mitchell v. W. T. Grant Co., 416 U.S. 600, 629-636 (dissenting opinion), seems to have been greatly exaggerated. Cf. S. Clemens, cable from Europe to the Associated Press, quoted in 2 A. Paine, Mark Twain: A Biography 1039 (1912).
I join in the Court's judgment, but I cannot concur in the opinion as I think it sweeps more broadly than is necessary and appears to resuscitate Fuentes v. Shevin, 407 U.S. 67 (1972). Only last term in Mitchell v. W. T. Grant, Co. 416 U.S. 600 (1974), the Court significantly narrowed the precedential scope of Fuentes. In my concurrence in Mitchell, I noted:
Three dissenting Justices, including the author of Fuentes, went further in their description of the impact of Mitchell:
The Court's opinion in this case, relying substantially on Fuentes, suggests that that decision will again be read as calling into question much of the previously settled law governing commercial transactions. I continue to doubt whether Fuentes strikes a proper balance, especially in cases where the creditor's interest in the property may be as significant or even greater than that of the debtor. Nor do I find it necessary to relegate Mitchell to its narrow factual setting in order to determine that the Georgia garnishment statutes fail to satisfy the requirements of procedural due process.
As we observed in Mitchell, the traditional view of procedural due process had been that " `[w]here only
Garnishment and attachment remedies afford the actual or potential judgment creditor a means of assuring, under appropriate circumstances, that the debtor will not remove from the jurisdiction, encumber, or otherwise dispose of certain assets then available to satisfy the creditor's claim.
In my view, procedural due process would be satisfied where state law requires that the garnishment be preceded by the garnishor's provision of adequate security and by his establishment before a neutral officer
The Georgia provisions fall short of these requirements. Garnishment may issue on the basis of a simple and conclusory affidavit that the garnishor has reason to apprehend the loss of money allegedly owed. See Ga. Code Ann. § 46-101, set forth in full in the Court's opinion, ante, at 602 n. 1. As shown by the affidavit filed in this case, see ante, at 604 n. 2, an unrevealing assertion of apprehension of loss suffices to invoke the issuance of garnishment.
I consider the combination of these deficiencies to be fatal to the Georgia statute. Quite simply, the Georgia
MR. JUSTICE BLACKMUN, with whom MR. JUSTICE REHNQUIST joins, dissenting.
The Court once again—for the third time in less than three years—struggles with what it regards as the due process aspects of a State's old and long-unattacked commercial statutes designed to afford a way for relief to a creditor against a delinquent debtor. On this third occasion, the Court, it seems to me, does little more than make very general and very sparse comparisons of the present case with Fuentes v. Shevin, 407 U.S. 67 (1972), on the one hand, and with Mitchell v. W. T. Grant Co., 416 U.S. 600 (1974), on the other; concludes that this case resembles Fuentes more than it does Mitchell; and then strikes down the Georgia statutory structure as offensive to due process. One gains the impression, particularly from the final paragraph of its opinion, that the Court is endeavoring to say as little as possible in explaining just why the Supreme Court of Georgia is being reversed. And, as a result, the corresponding commercial statutes of all other States, similar to but not exactly like those of Florida or Pennsylvania or Louisiana or Georgia, are left in questionable constitutional status, with little or no applicable standard by which to measure and determine their validity under the Fourteenth Amendment. This, it seems to me, is an undesirable state of affairs, and I dissent. I do so for a number of reasons:
1. Sniadach v. Family Finance Corp., 395 U.S. 337 (1969), mentioned in passing by the Court in its present opinion, ante, at 605-606, was correctly regarded by the Georgia Supreme Court, 231 Ga. 260, 263-264, 201 S.E.2d 321,
It goes on to speak of possible "tremendous hardship on wage earners with families to support," ibid., and the "enormous" leverage of the creditor "on the wage earner," id., at 341. Sniadach should be allowed to remain in its natural environment—wages—and not be expanded to arm's-length relationships between business enterprises of such financial consequence as North Georgia Finishing and Di-Chem.
2. The Court, ante, at 606, regards the narrow limitations of Sniadach as affected by Fuentes. It also bows to Morrow Electric Co. v. Cruse, 370 F.Supp. 639 (ND Ga. 1974), and the three-judge holding there that the Georgia statutes before us are unconstitutional. Ante, at 605 n. 4. Indeed, perhaps Sniadach for a time was so expanded (somewhat surprisingly, I am sure, to the Sniadach Court) by the implications and overtones of Fuentes. But Mitchell came along and Morrow was more than three months pre-Mitchell. Sniadach's expansion was surely less under Mitchell than it might have appeared to be under Fuentes.
3. I would have thought that, whatever Fuentes may have stood for in this area of debtor-creditor commercial relationships, with its 4-3 vote by a bobtailed Court, it was substantially cut back by Mitchell. Certainly, MR. JUSTICE STEWART, the author of Fuentes and the writer of the dissenting opinion in Mitchell, thought so:
Surely, MR. JUSTICE BRENNAN thought so when he asserted in dissent that he was "in agreement that Fuentes. . . requires reversal" of the Louisiana judgment. Id., at 636. And surely, MR. JUSTICE POWELL thought so, substantially, when, in his concurrence, he observed:
I accept the views of these dissenting and concurring Justices in Mitchell that Fuentes at least was severely limited by Mitchell, and I cannot regard Fuentes as of much influence or precedent for the present case.
4. Fuentes, a constitutional decision, obviously should not have been brought down and decided by a 4-3 vote when there were two vacancies on the Court at the time of argument. It particularly should not have been decided by a 4-3 vote when Justices filling the vacant seats had qualified and were on hand and available to participate on reargument.
The Court encountered the same situation a century ago with respect to the Legal Tender Cases; mishandled the decisional process similarly; and came to regret the error. Originally, in Hepburn v. Griswold, 8 Wall. 603 (1870),
A year later, with the two vacancies filled, the Court, by a 5-4 vote, overruled Hepburn and held the Legal Tender Act constitutional with respect to all debts. Legal Tender Cases, 12 Wall. 457 (1871). The Court said:
The failure in Hepburn to recall or adhere to the practice announced by the Marshall Court resulted in confusion, prompt reversal of position, embarrassment, and recrimination. See the opinion of Mr. Chief Justice Chase in dissent. 12 Wall., at 572.
Later, Mr. Justice Burton called attention to this lapse and heartily endorsed the practice of withholding decision on a constitutional issue by less than a majority of a full Court, that is, today, by less than five votes when vacancies exist and are waiting to be filled or have been filled. Burton, The Legal Tender Cases: A Celebrated Supreme Court Reversal, 42 A. B. A. J. 231 (1956), reprinted as Chapter IX in The Occasional Papers of Mr. Justice Burton (E. Hudon ed. 1969). We allowed his advice, as well as that of the Marshall Court, to go unheeded when we permitted Fuentes to come down with only four supporting votes when a nine-Justice Court already was available on any reargument.
The admonition of the Great Chief Justice, in my view, should override any natural, and perhaps understandable, eagerness to decide. Had we bowed to that wisdom when
5. Neither do I conclude that, because this is a garnishment case, rather than a lien or vendor-vendee case, it is automatically controlled by Sniadach. Sniadach, as has been noted, concerned and reeks of wages. North Georgia Finishing is no wage earner. It is a corporation engaged in business. It was protected (a) by the fact that the garnishment procedure may be instituted in Georgia only after the primary suit has been filed or judgment obtained by the creditor, thus placing on the creditor the obligation to initiate the proceedings and the burden of proof, and assuring a full hearing to the debtor; (b) by the respondent's statutorily required and deposited double bond; and (c) by the requirement of the respondent's affidavit of apprehension of loss. It was in a position to dissolve the garnishment by the filing of a single bond. These are transactions of a day-to-day type in the commercial world. They are not situations involving contracts of adhesion or basic unfairness, imbalance, or inequality. See D. H. Overmyer Co. v. Frick Co., 405 U.S. 174 (1972); Swarb v. Lennox, 405 U.S. 191 (1972). The clerk-judge distinction, relied on by the Court, surely is of little significance so long as the court officer is not an agent of the creditor. The Georgia system, for me, affords commercial entities all the protection
6. Despite its apparent disclaimer, the Court now has embarked on a case-by-case analysis (weighted heavily in favor of Fuentes and with little hope under Mitchell) of the respective state statutes in this area. That road is a long and unrewarding one, and provides no satisfactory answers to issues of constitutional magnitude.
I would affirm the judgment of the Supreme Court of Georgia.
MR. CHIEF JUSTICE BURGER dissents for the reasons stated in numbered paragraph 5 of the opinion of MR. JUSTICE BLACKMUN.
"Right to writ; wages exempt until after final judgment
"In cases where suit shall be pending, or where judgment shall have been obtained, the plaintiff shall be entitled to the process of garnishment under the following regulations: Provided, however, no garnishment shall issue against the daily, weekly or monthly wages of any person residing in this State until after final judgment shall have been had against said defendant: Provided, further, that the wages of a share cropper shall also be exempt from garnishment until after final judgment shall have been had against said share cropper: Provided, further, that nothing in this section shall be construed as abridging the right of garnishment in attachment before judgment is obtained."
"Affidavit; necessity and contents. Bond
"The plaintiff, his agent, or attorney at law shall make affidavit before some officer authorized to issue an attachment, or the clerk of any court of record in which the said garnishment is being filed or in which the main case is filed, stating the amount claimed to be due in such action, or on such judgment, and that he has reason to apprehend the loss of the same or some part thereof unless process of garnishment shall issue, and shall give bond, with good security, in a sum at least equal to double the amount sworn to be due, payable to the defendant in the suit or judgment, as the case may be, conditioned to pay said defendant all costs and damages that he may sustain in consequence of suing out said garnishment, in the event that the plaintiff shall fail to recover in the suit, or it shall appear that the amount sworn to be due on such judgment was not due, or that the property or money sought to be garnished was not subject to process of garnishment. No person shall be taken as security on the bond who is an attorney for the plaintiff or a nonresident unless the nonresident is possessed of real estate in the county where the garnishment issues of the value of the amount of such bond."
"Affidavit by agent or attorney
"When the affidavit shall be made by the agent or attorney at law of the plaintiff, he may swear according to the best of his knowledge and belief, and may sign the name of the plaintiff to the bond, who shall be bound thereby in the same manner as though he had signed it himself."
"Affidavit and bond by one of firm, etc.
"When the debt for recovery of which garnishment is sought shall be due to partners or several persons jointly, any one of said partners or joint creditors may make the affidavit and give bond in the name of the plaintiff, as prescribed in cases of attachment."
"Dissolution of garnishments; bond; judgment on bond
"When garnishment shall have been issued, the defendant may dissolve such garnishment upon filing in the clerk's office of the court, or with the justice of the peace, where suit is pending or judgment was obtained, a bond with good security, payable to the plaintiff, conditioned for the payment of any judgment that shall be rendered on said garnishment. The plaintiff may enter up judgment upon such bond against the principal and securities, as judgment may be entered against securities upon appeal, whenever said plaintiff shall obtain the judgment of the court against the property or funds against which garnishment shall have been issued."
"SUPERIOR COURT OF Whitfield COUNTY GEORGIA, Whitfield COUNTY.
"Personally appeared R. L. Foster, President of Di-Chem, Inc., who on oath says that he is President of Di-Chem, Inc., plaintiff herein and that North Georgia Finishing, Inc., defendant, is indebted to said plaintiff in the sum of $51,279.17 DOLLARS, principal, $.........., interest, $.......... attorney's fees, and $.......... cost and that said plaintiff has—a suit pending—returnable to the Superior Court of Whitfield County, and that affiant has reason to apprehend the loss of said sum or some part thereof unless process of Garnishment issues.
"Superior Court of Whitfield County." App. 3-4.
The facts of this case serve to illustrate the point. From the record and oral argument, it appears that the respondent feared that the only accessible and unencumbered assets of North Georgia Finishing were its bank accounts. At oral argument, counsel for petitioner indicated that North Georgia Finishing's holdings in real estate and tangible property in the State of Georgia were encumbered by mortgages and factoring contracts. It thus appears that respondent's apprehension of eventual inability to recover the debt may well have been entirely sufficient to justify the garnishment for the brief period required to conduct the post-garnishment hearing.
Bank accounts are readily susceptible to almost immediate transfer or dissipation, and this occurrence is often a likelihood where the debtor is a foreign corporation or a nonresident of the State. An affidavit in support of the garnishment or attachment of a nonresident's bank account would normally be sufficient for the writ if it averred that other less transitory assets were not available within the State to satisfy any prospective judgment.