Sperling v. Calfee

7 Mont. 514

• Court: Montana Supreme Court
• Decided: July 15, 1888
• Status: Published

Opinion

De Wolee, J.

The plaintiff sued the defendant in the district court of Gallatin County, and obtained judgment against him by default January 3,1887, for the sum' of $7,069.70, and costs. On March 14, 1887, execution was issued on this judgment, and a notice of garnishment or levy was served on T. J. Lynde for T. J. Lynde & Go., as debtors to White Calfee. On April 9th, T. J. Lynde, on behalf of his firm, made answer that they had no property in their hands belonging to Calfee, unless, upon a settlement, they were indebted to him, and that he could not state what, if anything, this would be. On April 12,1887, the court made an order requiring Lynde & Co. to answer to J. P. Martin, appointed by the court as referee in said cause, to ascertain the amount due, if any, from Lynde & Co. to Calfee. Afterwards, on April 22th, upon the report of the referee, the court found that, at the time the levy or garnishment was served on them, they were indebted to said plaintiff, as surviving partner of the late firm of Strasberger & Sperling, in the sum of four thousand five hundred dollars, which was the amount of the indebtedness of Lynde & Co. to White Calfee, and ordered said sum of four thousand five hundred dollars to be applied on the judgment obtained by plaintiff against defendant; and if not paid, the court ordered execution to issue against the property of Lynde & Co. for said amount, and if no joint property could be found to satisfy said indebtedness of four thousand five hundred dollars, then execution to issue against the separate property of T. J. Lynde. Execution was issued on said order on May 16, and returned May 31, 1887. The return of the sheriff showing that, by order of plaintiff’s attorney, he served a notice of levy or attachment on Frank J. Nesbitt, secretary and general manager of the Bozeman Lumber Company, and also upon said Nesbitt as secretary of the Gallatin Mill Company, notifying him that all right, title, and interest of T. J. Lynde and Howard M. Holden, copartners under the firm name of T. J. Lynde & Co., and all stocks and shares, and interest in stocks or shares, in either of the above-named companies or corporations, and all moneys, goods, credits, effects, debts due or owing, or any other property in the possession or under the control of either of said companies or corporations, and belonging to said defendants, or to the said T. J. Lynde individually, were levied upon or attached, and the said secretary notified not to pay over the same to any one but himself. He also demanded a statement from said Nesbitt as to the property of Lynde & Co. and T. J. Lynde, in the possession of said companies, but he failed to furnish such statement. Also, that he failed to find any property belonging to T. J. Lynde individually, to satisfy said judgment, and thereupon returned the same unsatisfied. On the day of the return of this execution, William A. Imes, as the receiver of the plaintiff, filed an affidavit, reciting consecutively the foregoing facts, and the successive steps taken to satisfy said judgment, and then alleged that the firm of T. J. Lynde & Co. had property not exempt by law from execution amounting to ten thousand dollars, and debts and accounts due and owing amounting to over fifty thousand dollars, and that they refused to apply said property to the satisfaction of the judgment; and also alleged that said property was in the hands of two companiés, being the Bozeman Lumber Company and the Gallatin Mill Company; that said property was, by T. J. Lynde & Co., placed in the hands of said companies for the purpose of defrauding creditors, and to defeat the judgment rendered in the proceedings in this action against them; and asked an order for the examination of T. J. Lynde, G. W. Flanders, and Frank Nesbitt concerning said property in the hands of the corporations mentioned, and also restraining the, agents of said coi’porations from transferring or interfering with said property, pending the investigatiom. This order the court made, and it cited said persons to appear on the second day of June to answer concerning the property. The parties appeared before the judge at chambers, at the date named in the order, and made a motion to vacate the order for examination, on several ground's: 1. Want of jurisdiction to determine the case at chambers; 2. The papers in the cause do not show that the plaintiff has exhausted his legal remedies in the collection of said judgment by execution; 3. T. J. Lynde and Lynde & Co. have been examined as garnishees in said cause; 4. F. Nesbit cannot properly be examined concerning his business relations personally, or as agent of said corporations, with T. J. Lynde, or Lynde & Co.; 5. F. Nesbitt has never been garnished or summoned to appear and answer concerning his liability, or the liability of any company or corporation with which he is connected, to White Calfee. The court overruled the motion to vacate the order, and on the same day, on the report of the referee, found that, at the date of the judgment, the Bozeman Lumber Company had in its hands, belonging to the firm of Lynde & Co., the sum of $3,334.20, which had not been paid to said firm, and ordered that said company pay to William A. Imes, the receiver of plaintiff, said sum owing by them to Lynde & Co. The court also found, by the report of the referee, that T. J. Lynde was the owner and holder of one fifth of the capital stock of the Bozeman Lumber Company, and the owner of eleven shares of the capital stock of the Gallatin Mill Company, which he offered in his testimony to turn over to whomsoever the judge of the court should direct. The court or judge further ordered that said T. J. Lynde transfer and deliver the same to the sheriff of Gallatin County, who should proceed to sell the same according to law of the sale of personal property on execution, and out of the proceeds thereof, after paying the costs and charges of such sale, pay to William A. Imes, the receiver of plaintiff, to the satisfaction of the judgment herein, the sum of four thousand five hundred dollars. From said order, and the order of said court made .May 80, 1887, requiring Frank Nesbitt, T. J. Lynde, and George W. Flanders to appear and answer concerning certain property, and the indebtedness of said corporations to T. J. Lynde and T. J. Lynde & Co., this appeal is prosecuted by T. J. Lynde & Co. and the Bozeman Lumber Company

Calfee.the judgment debtor, does not appeal; nor does the Gallatin Mill Company; nor does the appeal of Lynde & Co. or the Bozeman Lumber Company, in the notice of appeal contained in the record, appeal from the original judgment against Calfee; but counsel for appellants contend in their brief and in their argument that this judgment is void upon its face, having been entered by the clerk upon default in vacation; that he thereby performed a judicial act, which, under the organic act, he could not do. The organic act names the courts of the territory, and, to a limited extent, defines their jurisdiction; but the rules of procedure in the courts thus established are left nearly or entirely to the different territorial legislatures.

Speaking on this very question, the supreme court of the United States has said, in the case of Hornbuckle v. Toombs, 18 Wall. 656: “ From a review of the entire past legislation of Congress on the subject under consideration, our conclusion is, that the practice, pléadings, and forms, and modes of proceeding of the territorial courts, as well as their respective jurisdictions, subject, as before said, to a few express or implied conditions in the organic act itself, were intended to be left to the legislative action of the territorial assemblies, and to the regulations which might be adopted by the courts themselves. Of course, in case of any difficulties arising out of this state of things, Congress has it in its power at any time to establish such regulations, on this as well as on any other subject of legislation, as it shall deem expedient and proper.” The fact that Congress has never disallowed or disapproved the act conferring this power on the clerks of courts, and has not legislated directly on the subject, goes far to establish its validity as not inconsistent with the organic act. The statute under consideration was adopted from the code of California, and the courts of that state have held, as far as we have discovered, that the power conferred by it on clerks of courts was ministerial, and not judicial. Whatever might be our opinion if the question was an original one, too many rights have grown up under judgments entered in this manner for us now to question their validity. It is scarcely an exaggeration to say that a decision adverse to these judgments would operate as a public calamity by the contention and litigation it would produce. The appellants, by their brief, call in question the order of the court made April 22, 1887, directing T. J. Lynde and T. J. Lynde & Co. to pay to the judgment creditor the sum of four thousand five hundred dollars found to be owing by them to White Calfee; but the respondent objects to any consideration by this court of that order, as it was not an order appealed from. In this we think the counsel for respondent clearly correct. The notice of appeal nowhere refers to the order of that date, while it does mention other orders from which the appeal is taken. Section 422 of the Compiled Statutes defines what the notice of appeal shall contain, and is as follows: “ An appeal is taken by filing with the clerk of the court in which the judgment or order appealed from is entered, a notice stating the appeal from the same, or some specific part thereof.” This was not done; hence we think that order not properly reviewable in this court. But as we are obliged to consider it in connection with subsequent orders that were appealed from, we will state that the order was, in our judgment, authorized by the statute. The orders appealed from were those dated May 80, 1887, requiring Nesbitt, Lynde, and Flanders to appear and answer concerning the property of T. J. Lynde and Lynde & Co. in certain corporations, and the indebtedness of said corporations to them, the order made by the judge refusing to set aside and vacate the order just mentioned, and the order made by the judge August 1, 1887, requiring the Bozeman Lumber Company to pay to William A. Imes, the receiver of the plaintiff, the sum of $3,334.20, and requiring T. J. Lynde to deliver to the sheriff of the county one fifth of the capital stock of the Bozeman Lumber Company, and eleven shares of the capital stock of the Gallatin Mill Company. The report of the referee before whom the evidence was taken, on which these orders were based, is not contained in the record. The presumption therefore is, that all facts necessary to support the orders were duly found by the court or judge. Mining Co. v. Hayes, 6 Mont. 32; Chumasero v. Vial, 3 Mont. 378; Thompson v. O’Neil, 41 Cal. 683. The record shows plainly that neither Nesbitt, the Bozeman Lumber Company, nor the Gallatin Mill Company, was ever served with a copy of the execution against Calfee,.the original judgment debtor. The orders and proceedings against them were taken in order to reach the property of T. J. Lynde and Lynde & Co. in their hands. Lynde & Co. have neglected and failed to comply with the order of the court to pay over the four thousand five hundred dollars which the court or judge found they owed Calfee. The appellants contend that this proceeding was unauthorized and illegal. Section 486, division 1, Compiled Statutes, is as follows: “Whenever an order for the payment of a sum of money is made by a court, pursuant to the provision of this code, it may be enforced by execution in the same manner as if it were a judgment.” Now, such an order had been made in the case of Lynde & Co., and an execution issued against their property. This execution had precisely the same force and effect as an execution upon a judgment, and property and debts owing to them by other parties were subject to levy under it as under any other execution. The proceedings against the Bozeman Lumber Company and the Gallatin Mill Company, for the purpose of reaching assets in the hands of those corporations belonging to Lynde & Co., were authorized by the same law which subjected property and debts owing by Lynde & Co. to Calfee to an execution against the latter. The appellants claim that this could not be done, because the relation of debtor and creditor did not exist between Sperling and the Bozeman Lumber Company, and between Sperling and the Gallatin Mill Company, and that proceedings of this kind could go on without limit as long as you could find a debtor of a debtor against whom to proceed. And why not, if the law authorizes the pi’oceeding? — the end throughout being to subject property and debts in the hands of other parties belonging or owing to the first judgment debtor to the satisfaction of the judgment against him. Appellants claim that even in chancery you cannot attach the debt due debtor of defendant. Admitted. Yet it does not follow that you cannot reach the debt by proceedings on execution after judgment. The writ of execution, and the proceedings supplementary to execution, provided by our, statute, are more comprehensive and searching than the writ of attachment, and many things can he lawfully done under the former which cannot be done under the latter. By the law of this territory (sec. 319, div. 1, Comp. Stats.), all goods, moneys, chattels, and other property, both real and personal, or any interest therein of the judgment debtor not exempt by law, shares and interest in any corporation or company, and all other property, real and personal, are subject to execution; and if there be property which cannot be reached directly by execution, and which the judgment debtor refuses to apply, he may be compelled, in proceedings supplementary to execution, to deliver it up in satisfaction of the judgment (secs. 350-357, div. 1, Comp. Stats.); the principle and policy of the law being to subject all property of the judgment debtor not specially exempt to the payment of his debts. Under the former system, and before the adoption of the code, this was affected by a proceeding in chancery, known as a “ creditor’s hill”; but that method of reaching the concealed or remote property of a judgment debtor has been mainly or wholly superseded by proceedings supplementary to execution provided by the code. Adams v. Hackett, 7 Cal. 200. The proceedings taken and orders made by the court upon the judgment against Calfee appear to have been made in strict accordance with the provisions of the statute. The orders appealed from are therefore affirmed.

Judgment affirmed.

McConnell, C. J., and Bach, J., concur.