McIntosh Grocery Co. v. Newman

114 S.E. 535, 184 N.C. 370, 1922 N.C. LEXIS 91

• Court: Supreme Court of North Carolina
• Decided: November 15, 1922
• Status: Published

Opinion

Hohe, J.

At common law choses in action were not subject to seizure and sale under final process of execution, and the principle still prevails except and to the extent that the same has been modified or changed by statute.

In this jurisdiction, and except in case of attachment proceedings wherein provision is made for exceptional and urgent cases, this kind of property can only be made available to the creditor by civil action in. the nature of an equitable fi. fa. or by the statutory method of supplemental proceedings, both of which remedies in proper instances are here still open to claimants. Boseman v. McGill, ante, 215; Bank v. Burns, 109 N. C., 105; Hancock v. Wooten, 107 N. C., 9; Monroe v. Lewald, 107 N. C., 655; 6 Pomeroy Equity, secs. 871-877.

On the facts presented, the property of the judgment debtor involved in this controversy are but choses in action as to which the bank has the general right of appropriation to claims held by it against said defendant, where such claims have matured and a right of set-off under recognized equitable principles when its debtor is insolvent, and to the extent required to protect its own interests, and with the additional right of application according to any contract it may hold which specifically affects the property. Moore v. Trust Co., 178 N. C., 118; S. c. (Moore v. Bank), 173 N. C., 180; Hodgin v. Bank, 124 N. C., 540; Hawes v. Blackwell, 107 N. C., 196; 5 Cyc., 553; 3 A. & E., 827.

In the instant case the judgment creditor is pursuing the statutory remedy of supplemental proceedings, C. S., eh. 12, art. 30, sec. 711 et seq., and a perusal of this legislation and the authorities apposite will disclose that no lien arises to the creditor by the mere issuance of the notice. This will appear from the various provisions of the statute by which a lien may be secured and the remedy made effective for the application of this kind of property.

Thus, in section 714, on proper affidavit the judgment debtor may be arrested and a bond required providing for his continued attendance and against any disposition of his property meantime in fraud or hindrance of the proceedings. In section 717 it is provided that the court or judge may, by order and without arrest being had, forbid any transfer or other disposition or interference with the property of the judgment debtor not exempt from execution. And section 723 authorizes the appointment of a receiver in whom the title of the property shall vest from the date of the service of the restraining orders, if any have been made, and otherwise from the filing and recording of appointment of the receiver.

A proper application of the rules and principles stated is in full support of his Honor’s judgment setting aside the order of the clerk and directing that further evidence be had affecting the rights of these parties. It clearly appearing that no intelligent or satisfactory disposition of the cause can be made in the present condition of the record.

As to the collateral held by the bank under a specific contract, it has the undoubted right to hold and apply the proceeds to its debts whenever realized on and required for their payment. As to the deposit of $877.97, less $33.88 checked out on 17 July, leaving a balance on that date of $844.09, no lien having been acquired by the notice, the bank .had the lawful right to apply the deposit, or so much as required, to the payment of its debt of $475 maturing on 18 July, and this much of said fund is in no event available to the creditor. In reference to the remainder of the deposit, $844.09 minus $475, leaving a balance of $369.09, the creditor having procured a restraining order of date, 19 July, served same day, and the bank having no specific lien on said deposit and, so far as now appears, there being no further debt presently due the bank, tbe rights of tbe parties would seem to depend on tbe principles of equitable set-off, referred to and approved more especially in case of Moore v. Bank, 173 N. C., 180; Hodgin v. Bank, 124 N. C., 540. But further expression on this matter is reserved until a fuller disclosure of tbe pertinent facts is bad pursuant to bis Honor’s order.

While we have thus expressed our opinion on tbe exceptions presented in tbe record, a course sometimes pursued by tbe Court when tbe nature of tbe case renders it desirable, S. v. Yates, 183 N. C., 753-755; Gilbert v. Shingle Co., 167 N. C., 290; In re Sermons, 182 N. C., 122-129, we must not be understood as approving tbe plaintiff’s right of appeal from the order entered by bis Honor. It has been repeatedly held with us that except where otherwise expressly provided by statute, an appeal may be taken to this Court only in case of a final judgment, or one in its nature final, and under the principle upheld in these decisions, the judgment of bis Honor directing tbe taking of further testimony is clearly neither tbe one nor tbe other, and on authority, therefore, tbe appeal must be dismissed at tbe cost of appellant. Corporation Com. v. Trust Co., 183 N. C., 179; Cement Co. v. Phillips, 182 N. C., 437.

Appeal dismissed.