Present: All the Justices
FIRST VIRGINIA BANK
v. Record No. 950149 OPINION BY JUSTICE BARBARA MILANO KEENAN
March 1, 1996
FRANCIS X. O'LEARY,
ETC., ET AL.
FROM THE CIRCUIT COURT OF ARLINGTON COUNTY
Paul F. Sheridan, Judge
In this appeal, we determine whether state and local taxing
authorities are bound by Code § 6.1-125.3(D), which requires
creditors seeking funds from a joint bank account to obtain a
summons notifying nondelinquent owners of the account of "an
order of garnishment, attachment or other levy" addressed to that
1
account.
1
Code § 6.1-125.3(D) provides, in relevant part:
Upon an order of garnishment, attachment or other
levy addressed to a party to a joint account . . . the
financial institution shall file an answer setting
forth the form of account, whether it has funds
responsive to the process, and such information as it
has as to the names and addresses of the parties to the
account. The financial institution shall by first-
class mail send a copy of such answer to the
petitioning creditor or counsel of record. From the
time of service of such garnishment, attachment or
levy, the financial institution shall hold the amount
subject to such garnishment, attachment or levy, or
such lesser amount or sum as it may have, which amount
shall be set forth in its answer. . . . If the
petitioning creditor shall desire to pursue the
question of ownership of such funds held subject to the
claim of two or more parties to the deposit account, it
shall provide the clerk with a copy of the documents
originally served on the original defendants or
judgment defendants and request the clerk to issue a
summons accompanied by such copy with a copy of the
notice at the end of this subsection. Upon payment of
the appropriate fees, the clerk shall issue such
summons to be served on such other party having an
interest or apparent interest in such account. . . .
If such summons is received either by certified or
The facts before us are undisputed and arise from three
cases that were consolidated for purposes of this appeal. First
Virginia Bank (the Bank) appeals two judgments in favor of the
Commonwealth of Virginia, Department of Taxation (the
Department), and one judgment in favor of Francis X. O'Leary,
Arlington County Treasurer (the Treasurer).
The Department, pursuant to Code § 58.1-1804, issued a
"notice of tax lien and demand for payment" to the Bank to
satisfy unpaid taxes owed by two taxpayers. 2 The Deputy
(..continued)
registered mail or acknowledged in writing within
twenty-one days on or by such financial institution, it
shall continue to hold such funds pending further order
of the court. If such financial institution shall not
within twenty-one days from the filing of such answer
be served with or acknowledge such an order, it may
treat the garnishment, attachment or levy, insofar as
it relates to such joint . . . accounts, as terminated
on the twenty-second day and being of no further force
or effect. . . . The notice to the co-depositor
described in this subsection shall contain
substantially the following information: "Attached is
a copy of the documents served on a financial
institution to cause it to withhold money from an
account in which you may have an interest. If you wish
to protect your interests, you or your attorney should
take appropriate legal action promptly."
2
Code § 58.1-1804 provides, in relevant part:
The Tax Commissioner may apply in writing to any
person indebted to or having in his hands estate of a
taxpayer for payment of any taxes . . . more than
thirty days delinquent, out of such debt or
estate. . . .
The Tax Commissioner shall send a copy of the
application to the taxpayer, with a notice informing
him of the remedies provided in this chapter.
If the person applied to does not pay so much as
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Treasurer, pursuant to Code § 58.1-3952(A), issued a "notice of
tax lien and demand for payment" to the Bank to satisfy
delinquent personal property taxes owed by one holder of a joint
account. 3 Each of three delinquent taxpayers held an account at
the Bank jointly with a nondelinquent holder. Since the Bank did
not receive notice that the nondelinquent joint account holders
had been served with notice pursuant to Code § 6.1-125.3(D), the
Bank refused to comply with these demands for payment.
The Department and the Treasurer (collectively, the
Department) filed pleadings in the trial court alleging that the
Bank's refusal to release the funds violated Code §§ 58.1-1804
(..continued)
ought to be recovered out of such debt or estate, the
Tax Commissioner shall procure a summons directing such
person to appear before the appropriate court, where
the proper payment may be enforced. Any person so
summoned shall have the same rights of removal and
appeal as are applicable to disputes among individuals.
3
Code § 58.1-3952(A) provides, in relevant part:
The treasurer or other tax collector of any county
. . . may apply in writing to any person indebted to or
having in his hands estate of a taxpayer for payment of
taxes more than thirty days delinquent out of such debt
or estate. . . . The taxes, penalties and interest
shall constitute a lien on the debt or estate due the
taxpayer from the time the application is
received. . . . The treasurer or collector shall send
a copy of the application to the taxpayer, with a
notice informing him of the remedies provided in this
chapter.
If the person applied to does not pay so much as
ought to be recovered out of the debt or estate, the
treasurer or collector shall procure a summons
directing such person to appear before the appropriate
court, where proper payment may be enforced.
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and -3952, respectively. The trial court ruled that the notice
provisions of Code § 6.1-125.3(D) do not apply to tax liens
issued under Code §§ 58.1-1804 and -3952. The trial court also
ruled that there is a presumption that all joint account holders
own an account in equal shares, and that the Treasurer and the
Department had "a right to the funds in the account equal to that
of delinquent taxpayer joint depositor." Based on these rulings,
the trial court ordered the Bank to comply with the demands for
payment in the amount of the tax liens or 50% of the funds on
deposit, whichever amount was less. This appeal followed.
The issue before us is one of first impression. The Bank
argues that each tax lien at issue is an "other levy" within the
meaning of Code § 6.1-125.3(D). The Bank also asserts that,
since the taxing statutes do not specifically address the
imposition of a tax lien on a joint bank account, the notice
provisions of Code § 6.1-125.3(D) govern that procedure.
In response, the Department argues that Code § 6.1-125.3(D)
does not apply to a tax lien, which is a type of administrative
process. It asserts that the statute applies to judicial process
only, as demonstrated by the language "an order of garnishment,
attachment or other levy." We agree with the Department.
In determining whether the phrase "order of garnishment,
attachment or other levy" includes the tax liens at issue, we
consider the entire text of Code § 6.1-125.3(D). "A cardinal
rule of statutory construction is that a statute be construed
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from its four corners and not by singling out a particular word
or phrase." Commonwealth Natural Resources, Inc. v.
Commonwealth, 219 Va. 529, 536, 248 S.E.2d 791, 795 (1978).
Further, a legislative enactment "should be interpreted, if
possible, in a manner which gives meaning to every word."
Monument Assoc. v. Arlington County Bd., 242 Va. 145, 149, 408
S.E.2d 889, 891 (1991).
We also construe Code § 6.1-125.3(D) with reference to Code
§§ 58.1-1804 and -3952. We accord each statute, insofar as
possible, a meaning that does not conflict with the other
statutes. See Albemarle County v. Marshall, Clerk, 215 Va. 756,
761, 214 S.E.2d 146, 150 (1975).
The requirements of Code § 6.1-125.3(D) arise entirely
within the context of judicial proceedings. This section
requires a financial institution to "file an answer" on receipt
of "an order of garnishment, attachment or other levy." 4 The
4
The process that issues to a third party in a garnishment
proceeding is termed a "summons." See Code § 8.01-511. The
process which issues against specific property in an attachment
proceeding is termed an "attachment." See Code § 8.01-540. We
conclude that these types of process are covered by the language
of Code § 6.1-125.3(D), because the two phrases, "garnishment,
attachment or levy" and "order of garnishment, attachment or
other levy," are used interchangeably in Code § 6.1-125.3(D).
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institution must also mail a copy of its answer to the
petitioning creditor or "counsel of record."
The Bank's position would require us to find that the term
"file" means nothing more than "send." However, throughout the
Code and the Rules of Court, the term "file" is used to convey
the act of lodging pleadings and notices with the clerk of the
court. See, e.g., Code §§ 8.01-73, -229; Rule 1:4. The Bank's
argument also overlooks the fact that Code § 6.1-125.3(D)
requires the financial institution to send a copy of its answer
to the petitioning creditor or to counsel of record. The Bank's
position would make this requirement an unnecessary act, since
the Bank sent its answer directly to the petitioning creditor.
We also observe that the term "counsel of record" has a
specific meaning when used in the Code and the Rules of Court.
Rule 1:5 defines this term as including "a counsel or party who
has signed a pleading in the case or who has notified the other
parties and the clerk in writing that he appears in the case."
Thus, the use of the above terms in Code § 6.1-125.3(D) indicates
that a court action has been initiated, and that a response to
court-issued process is required.
Code § 6.1-125.3(D) also stipulates procedures which involve
action by the clerk of the court. If the petitioning creditor
wishes to pursue the question of ownership of jointly-held funds,
the creditor must request the clerk to issue a summons and a
notice to the co-depositor. Before a summons will be issued by
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the clerk, the creditor must also provide the clerk with a copy
of the documents "originally served on the original defendants or
judgment defendants." This language indicates that a prior
adjudication involving the account holder has occurred, forming
the basis for the garnishment, attachment or other levy.
If the financial institution receives or acknowledges within
21 days a copy of the summons issued by the clerk, the financial
institution is required to hold the funds requested pending
"further order of the court." (Emphasis added.) By implication,
this language presupposes that prior court process has issued.
In contrast, judicial action is not required for the
issuance of a "Notice of Tax Lien and Demand for Payment" under
Code §§ 58.1-1804 and -3952. These tax liens are administrative
process issued by authority of the Tax Commissioner, under Code
§ 58.1-1804, or by the "treasurer or other tax collector of any
county, city or town," under Code § 58.1-3952.
In these statutes, the person owing the tax is referred to
as the "taxpayer," not the "defendant." Thus, while Code
§ 6.1-125.3(D) requires the petitioning creditor to provide the
clerk with a copy of the documents originally served on "the
original defendants or judgment defendants," there is no party in
Code §§ 58.1-1804 and -3952 who can be identified by these terms.
Based on these distinctions, we conclude that the
legislature did not intend that Code § 6.1-125.3(D) apply to the
receipt of administrative process by a financial institution.
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Therefore, we hold that the Department is not subject to the
requirements of Code § 6.1-125.3(D) when it issues a notice of
tax lien and demand for payment to a financial institution which
has in its possession funds owned by a delinquent taxpayer in a
joint bank account.
Nevertheless, the Bank contends that the due process rights
of the nondelinquent co-depositors were violated by the taxing
statutes. We do not reach this issue, however, because the Bank
lacks standing to assert the due process rights of another. See
Valley Forge Christian College v. Americans United for Separation
of Church and State, Inc., 454 U.S. 464, 471-73 (1982).
Therefore, we do not decide here the question whether Code
§§ 58.1-1804 and -3952 provide nondelinquent joint account
holders remedies sufficient to protect their due process rights. 5
5
We also note that the parties agree the trial court erred
in ruling there is a presumption that all joint account holders
own an account in equal shares. See Code § 6.1-125.3(A). Based
on this ruling, the trial court limited the Bank's obligation to
comply with the demands for payment to the amount of the tax
liens or 50% of the funds in the account, whichever amount was
less. However, we do not further address this ruling, because
the Department has not assigned cross-error to the ruling and the
Bank lacks standing to assert the rights of the nondelinquent co-
depositors.
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For these reasons, we will affirm the trial court's
judgment.
Affirmed.
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