78 P. 848 | Kan. | 1904
The opinion of the court was delivered by
F. D. Wolcott recovered a judgment on January 20, 1902, against F. M. McConnell and Florence McConnell, his wife, for $2206.50. An execution was issued January 29,1902, which was returned Feb
It is claimed by the defendant in error that the service of the order for the judgment defendant to appear and submit to examination as to her property gave rise to a new status, and that from that moment no-transfer of her funds could be operative as between her and the judgment plaintiff; that the draft in her-hands was in effect impressed with a lien in his favor. This contention finds much support in the authorities. In volume 24 of the American and English Encyclopedia of Law, first edition, at page 656, it is said :
“The creditor, by instituting supplementary proceedings, acquires a lien upon the equitable assets of the debtor, which takes effect from the time of service-of the order.”
“The code is silent as to the time when the judgment creditor shall be deemed to have acquired a lien upon his debtor’s equitable effects; but I think the order for his examination, made under the 292d section [equivalent to section 483 of the Kansas code] , should be construed to give the creditor the same lien which he acquired under the former practice, by the commencement of a suit by creditor’s bill.”
In October, 1857, the question again arose, this time before the supreme court for the fifth judicial district. (Voorhees v. Seymour, 26 Barb. 569.) In the first paragraph of the syllabus (one judge out of four dissenting) it was held :
“A judgment creditor, by commencing supplementary proceedings against the judgment debtor under section 292 of the code, and obtaining an order-for the examination of the debtor, does not acquire a prior right to, or lien upon, the equitable assets of the debtor.”
The opinion presents the fullest discussion of the question under consideration to be found in any of the reports. The earlier case, so far as it bore upon this matter, is there disapproved, branded as dictum, and held to be unsound in principle, attention being called to the fact that the affirmation of the judgment was based upon other considerations. Nevertheless, in March, 1858, in the case of Edmonston v. McLoud, 16 N. Y. 543, when the court of appeals was first required to pass upon the question, it followed Porter v. Williams and Clark, supra, without any discussion and without referring to Voorhees v. Seymour, supra (which seems not to have been cited in the briefs, perhaps because then so recently announced), it apparently being assumed that the affirmance of the former case involved the adoption of all the views there expressed. It is therefore obvious that the construction placed upon the statute by an inferior court, through a misapprehension, and without independent examination
In view of this situation it is probable that the question might thereafter have received further investigation upon its merits by the New York court of appeals, except for a new condition affecting the matter, arising from subsequent legislation. In fact, a doubt of the soundness of the accepted doctrine was expressed in Becker v. Torrance, 31 N. Y. 631; but in 1862 it was decided,in Van Alstyne v. Cook, 25 N. Y. 489, that by the service of an order for the examination of a judgment defendant in supplementary proceedings no lien was acquired upon such personal property of the defendant as was subject to execution, the question as to the effect upon other personal property being explicitly left for future determination. In view of this decision the legislature in the same year amended the statute by adding provisions giving in express terms a lien, defining its extent, and specifying the time when it should take effect. In consequence of this amendment it became unnecessary to make any further judicial inquiry concerning the interpretation of the law as it was originally enacted.
A precedent so established has little force as an authority, and, unless justified by sound logic, it ought not to be followed. The argument offered in its support is this : The filing of a creditor’s bill gave the judgment creditor a lien upon the equitable assets of his debtor, and, inasmuch as the statutory remedy is a substitute for that in equity, the commencement of proceedings under it should be given the same effect. That such a lien results from the beginning of a creditor’s suit is well settled. (12 Cyc. 61.) It may also be granted that the statutory proceeding, although not a complete substitute for the equitable
But a more obvious consideration invites attention. The statute, while in a sense providing a substitute for the suit in chancery, purports to afford a complete remedy in itself. One of its provisions (Code, § 491; Gen. Stat. 1901, §4968) is that “the judge may also by order forbid a transfer or other disposition of the property of the judgment debtor not exempt by law, and any interference therewith.” Now, this right to an order which must have the effect of preserving the status of the defendant’s property is not an outside matter. To avail himself of it the plaintiff need not resort to equity, or begin any new action. It is afforded by a part of the very statute under which he is proceeding. He may procure an order for the examination of the defendant, with or without the further order forbidding the transfer of any property. If the mere order for such examination operates as a lien on the debtor’s assets it is difficult to see the purpose of the provision for an order against a disposition of his property, or the effect of such an order
“The supreme court of Ohio, in the case of. The Union Bank of Rochester v. The Union Bank of Sandusky, 6 Ohio St. 254, hold that where, at the instance of a judgment creditor, a third person had been cited to answer as to property and effects held by him belonging to the judgment debtor, the notice operated as Us pendens, and that the party, from the time of the service of the notice, could make no disposition of the property or effects in his hands. But clearly this principle does not apply to the case of a judgment debtor, as to 'whom there has been a mere order for his examination, without an order restraining him from disposing of his property.”
Cases may be imagined in which the judgment creditor, while desirous of investigating his debtor’s real condition, might not wish to tie his hands by impressing a lien upon his assets, and in which the interests of both might be jeopardized if such a result were the necessary consequence of taking the first step toward such an inquiry. Inasmuch as the statute by specific provision affords ample means by which
A further argument is made that in view of all the-circumstances of the case, irrespective of any question, of a specific lien, the property claimed as a homestead ought to-be subjected to the payment of the plaintiff’s, judgment for the reason that to refuse this is to allow the defendants to make the exemption given them by the law a means of defrauding the plaintiff. It appears that, prior to the term of court at which the judgment was rendered, the defendants sold some real estate which they owned,'for the express purpose of' placing their property beyond the reach of the expected judgment ;• that after the term began they sold another tract, which it is claimed was their homestead, and which, but for its homestead character,, would have been subject to the lien of the judgment; that the proceeds of these sales were squandered by defendant F. M. McConnell before his examination took place; that the $1500 draft'was not the proceeds of the sale of any of the tracts just referred to, or of any homestead, but was derived from the sale of' property belonging to defendant Florence McConnell, made several years before ; that the draft was used for-the purchase of the real estate in question for the;
We do not think that these facts make the investment of the wife’s funds in a homestead a fraud upon plaintiff. The prior sale of other real estate with a view to evade the enforcement of the judgment had no effect upon any question relating to the exemption of the homestead. The plaintiff had no peculiar claim upon the draft with wThich the homestead was purchased, such as, in the case of Long Brothers v. Murphy, 27 Kan. 375, was held to authorize a creditor to hold for the payment of his demand property otherwise exempt. The homestead exemption may be asserted even as to property purchased by an insolvent debtor with the proceeds of non-exempt property, in the absence of any special equity existing in favor of a creditor. (15 A. & E. Encycl. of L., 2d ed., 617.) The fact that the exchange may have been made for the very purpose of acquiring exempt property does not alter the rule. (Jacoby v. Parkland Distilling Co., 41 Minn. 227, 43 N. W. 52; Paxton v. Sutton, 53 Neb. 81, 73 N. W. 221, 68 Am. St. Rep. 589.) The fact that the defendants disposed of one homestead at a time when they were enabled to convey a good title only because it was exempt did not preclude their subsequently acquiring another. At the time of the purchase of the property in question they had no homestead. Nor was any claim of exemption asserted with regard to the proceeds of the former homestead on the theory that it was to be devoted to the purchase of a new one. The sale of the first homestead, so far from being a fraud upon plaintiff, was theoretically beneficial to him, as it converted exempt into nonexempt property. In this situation it was competent
The judgment is reversed, and the cause remanded for further proceedings in accordance herewith.