Bank of Fayetteville v. Spurling

52 N.C. 398 | N.C. | 1860

The petition is as follows:

NORTH CAROLINA — Cumberland County.

Superior Court of Law — Spring Term, 1860.

To the Honorable, the Judge of the said Court:

The petition of James Dodd, humbly complaining, showeth unto your Honor that a writ of attachment has been issued at the instance of the Bank of Fayetteville against one George W. Spurling, which has been levied by the sheriff upon certain goods, wares, and merchandise and other property belonging to the said Spurling, and returned to the present term of this court. Your petitioner further shows that he himself is now, and was at the time of issuing and levying of the said attachment, a creditor of the said Spurling, and that as such he also sued out a writ of attachment against the said Spurling upon the debt then due to your petitioner, which was levied upon the same goods, wares, and merchandise, and returned to March Term, 1860, of the County Court of Cumberland.

Your petitioner further shows to your Honor that he is informed, and has good reason to believe, and does verily believe, that the said Bank of Fayetteville did not have, at the time of issuing and levying of its said writ of attachment, a legal and subsisting debt then due from the said George W. Spurling, and, therefore, was not entitled to the remedy by attachment against him, and this your petitioner avers he is prepared to prove whenever an opportunity is allowed him by this honorable court.

(399) Your petitioner further shows to your Honor that the said Spurling has not appeared and pleaded to the said suit of the Bank of Fayetteville against him, and that should judgment be entered therein, and the property levied on be subjected to the satisfaction of the claim alleged to be due from the said Spurling to the Bank of Fayetteville, that the entire amount and value thereof will be absorbed, leaving nothing to be applied to the satisfaction of your petitioner's just debt, and rendering your petitioner entirely remediless in the premises.

Your petitioner, therefore, prays your Honor to allow him to intervene and contest the existence and validity of the claim alleged to be due from the said Spurling to the said Bank of Fayetteville, and to contest the right of the said bank to the said writ of attachment issued thereon.

Upon hearing this petition, which was verified by affidavit, the court made an order that the petitioner be allowed to intervene in the cause and contest the existence and validity of plaintiff's debt, upon giving bond and security for the costs.

From this order the Bank of Fayetteville appealed. The proceeding which was allowed by his Honor in the court below is of the first impression in this State. We find nothing to warrant it, either according to the course of the common law or under our statute, giving the process of attachment as a substitute for the ordinary process where the latter cannot be served.

Suppose, pending an action commenced in the ordinary way, a third person should file a petition setting out that he was a creditor of the defendant; that should the plaintiff get judgment all of the defendant's property would be sold under execution, and any judgment that the petitioner might afterwards obtain would be fruitless; that there was nothing owing to the plaintiff, but the petitioner feared he would get judgment, either because the defendant would neglect to contest the claim or would act collusively, and thereupon pray that "he should be allowed to intervene and contest the existence and (400) validity of the alleged debt of the plaintiff," is it too much to say such an application would astonish every member of the legal profession in the State of North Carolina? The appeal of the petitioner: "Must I lose a just debt because of the negligence or fraud of my debtor?" "Will a court of justice lend its aid to one who, as I am ready to prove, has no subsisting debt," would be met by the reply, "If you are permitted to contest the plaintiff's debt, he must be permitted to do so in respect to your debt, and thus make a double suit, wholly at variance with the course of a court of law, and for which there is no precedent.

Is the case altered where the action is commenced by original attachment? If so it must be by force of some provision of the statute, for the proceeding is still in a court of law — a fact, by the bye, which there seems to be a strong disposition to overlook in a blind effort to dojustice, under the idea that the long established modes of proceeding at law are not calculated to effect it. This may be so; but while the matter is at law, "the course of the court" must be observed, except so far as it is changed by statute. So the question is narrowed to this: Does the statute contain a provision which authorizes the court to allow a third person to contest the debt of the plaintiff?

It is manifest that the case does not fall under sec. 10, ch. 7, Rev. Code: "When the property attached shall be claimed by any other person, the claimant may interplead," etc., for the petitioner does not claim the property; on the contrary, the proceeding assumes that the property belongs to the debtor. Indeed, the counsel for the petitioner did not insist that this section embraced the case, but referred us to the remarks of Drake on Attachments, and the cases there cited, in support of the proceeding.

There are some considerations which may tend to show the expediency of allowing, with proper restrictions, a junior attaching creditor to contest the debt of the plaintiff, but they addressed themselves to the lawmakers, and not to the courts, and we cannot yield our assent to the suggestion that the cases cited by Drake, "proceeding (401) upon principles of strict right and justice, and fulfilling the law's aversion to every species of fraud," are sufficient authority to induce the Court to put a strained construction upon our statute, so as to make it meet the case, however desirable it may be to have a uniform practice in the courts of the different States.

In respect to the cases cited, this general remark may be made: but little aid can be derived in the construction of a statute from the decisions of the courts of other States, because the provisions of the statutes are scarcely ever the same, and there is no telling how far the question of construction may be affected by the current of legislation on other subjects. The case cited from New Hampshire, Buckman v. Buckman, 4 N. H., 319, does not aid us, for it merely states the fact that it is the ordinary practice in that State to allow a creditor to intervene and defend in the name of the defendant on a suggestion of collusion between the plaintiff and defendant, but it does not account for the origin of this practice, or show how a court of law was authorized to adopt it; and it seems, in that State, "attachment" is the ordinary process, and the writ ofcapias ad respondendum and other mesne process known to the common law is not in use.

The case from South Carolina, Walker v. Roberts, 4 Rich., 561, does not aid us, for in that State the effect of a judgment rendered on attachment against an absconding debtor does not reach beyond the property attached, and the statutory provision is treated merely as a mode of distributing the money arising from the attachment, similar to a "creditor's bill in equity, for the distribution of the effects of a deceased debtor."

The case from Virginia, McClung v. Jackson, 6 Gratt., 96, tends to support the construction we give to our statute, for the right of a junior attaching creditor to intervene is not put in the section allowing a third person who claims the property attached to interplead (which provision is similar to that contained in our statute, but is (402) derived from the provision which allows the defendant to make defense without giving bail, whereas, by our statute, the defendantis not allowed to defend unless the property is replevied by giving bail, section 5).

Nor is the case from Georgia, Smith v. Gettinger, 3 Ga. 140, applicable to the question before us, for the decision that a judgment rendered on an attachment may be set aside in a court of law, at the instance of a creditor who has obtained a judgment, on the ground that the first judgment was obtained without consideration (that is, where there is no subsisting debt), is put on the ground that "in question of fraud the jurisdiction by express statute, and indeed by the general law in courts of law and equity, is concurrent." In this State there is no "express statute" to that effect. Nor is the jurisdiction in courts of law and courts of equity concurrent in all questions of fraud according to "the general law," as understood by our courts. On the contrary, there are many questions of fraud on which the courts of law do not assume jurisdiction — as one instance out of many: a woman in contemplation of marriage secretly conveys away all her property. This is a fraud upon the intended husband, and yet a court of law does not assume jurisdiction over it, because, in the absence of a statute, it has no jurisdiction except over frauds against existing rights. Logan v. Simmons, 18 N.C. 13; same parties, 38 N.C. 487.

Upon these four cases this additional general remark may be made: they do not establish any uniform practice. In South Carolina and Georgia the petitioning creditor is required to have reduced his debt to a judgment; in New Hampshire and Virginia he is allowed to intervene before he obtains judgment; and we are not informed what is the practice when the plaintiff, in the first attachment, in his turn, avers collusion between the petitioner and debtor, or that the petitioner has no subsisting debt; and certainly in "a proceeding according to the principles of strict right and justice" the right to charge fraud and impeach the alleged debt of the other must be mutual, so as to result in a double suit, which in a court of law is without precedent, except it be allowed by the express provisions of a statute. (403)

It was asked on the argument, Is a judgment conclusive on third persons, so that a creditor of an absconding debtor cannot be heard to aver that it was obtained without a subsisting debt? If so, is there no way for him to intervene, so as to prevent a judgment from being rendered? The reply is that there is no way, in a court of law, by which a third person, he being a creditor, can prevent a judgment from having its legal effect, unless there is a statute by which it is made void as against creditors. This is settled. Skinner v. Moore, 19 N.C. 138; Respass v. Pender, 44 N.C. 78. Where there is collusion between the alleged creditor and the absconding debtor, with an intent to defraud his true creditors, we suppose the case would come under the provisions of the statute, Rev. Code, ch. 50, sec. 1, which makes "every gift, grant, and conveyance of lands, goods and chattels, and every bond, suit, judgment and execution, made with an intent to hinder and defraud creditors, void as against creditors." But to bring the case within this statute it would not be sufficient to prove that the plaintiff in the attachment had no subsisting debt when the attachment issued; it would be necessary to connect the debtor with the fraud, as by showing that before absconding he executed a note for a feigned debt, for the purpose of being made the groundwork of the fraudulent attachment, by which his property was to be put beyond the reach of his creditors; and even in that case the proceeding would not be by intervening, so as to prevent the judgment, or by moving to set it aside, for there is no such mode of proceeding according to the course of the court, but by taking a judgment and having the property seized under execution — treating the first judgment and the proceedings under it as void, in the same way as is done in the case of a deed made to defraud creditors; the legal effect of which, a third person, by the statute, is allowed to avoid. But for the statute, the deed as well as the judgment would, as a matter of course, have its legal effect as well in reference to third (404) persons as to parties and privies.

The conclusion to which we have arrived is unavoidable unless, in an effort to do what seems to be "just and right," the Court should break through the long established distinction between the jurisdiction of a court of law and a court of equity, so as to confound the two. This can only be done by that department of our Government whose province is to makelaws.

The order in the court below will be reversed, and the petition be dismissed.

PER CURIAM. Reversed.