Dilling, Baker & Co. v. Foster

The opinion of the court was delivered by Mr. Justice McIver. On July 7, 1883, the plaintiffs obtained judgment against the defendant for the sum, including posts, of $86.75, and issued execution therefor. The sheriff, on July 16, 1883, endorsed upon this execution a levy “upon a lot — 336 — of merchandise, &c., a list of which is attached within.” By written endorsement on the execution the plaintiffs’ attorneys released this levy upon the ground that the property was claimed by another person, and then the sheriff, on July 20, 1883, made a return of nulla bona upon the execution. Upon the usual affidavit, Judge Wallace, at chambers, made an order requiring the defendant to appear before a referee named, on July 25, 1883, or on such other days as he might appoint, to be examined touching his property, and directed the referee to report the testimony and his conclusions of fact. He also directed a copy of the order to be served on the defendant, and that in the meantime, and until the further order of the judge in the premises, that the defendant be enjoined from disposing of his property. The copy of this order served upon the defendant was not certified under the seal of the court. At a reference held on August 2, 1883, the defendant made a motion to dismiss the proceedings, because of the want of the seal to the copy of the order served upon the defendant. The motion was refused, and the examination of the defendant was taken at length, all of which is set out in the “Case.” The facts as reported by the referee, so far as the questions involved in this case are concerned, are substantially as follows: That the stock of goods, wares, and merchandise, to the estimated value of about $600, which had been leviedupon by the sheriff, and the levy subsequently released, were covered by a mortgage to one Dreyer, dated February 8, 1883, given to secure a note for $500, payable February 9, 1883; that the merchandise levied upon, after it was released from the levy, was not returned directly to the defendant, but was taken charge of by the mortgagee Dreyer, who placed the defendant in charge of it to sell as his agent; that the goods levied upon were nearly sufficient to pay off both Dreyer’s mortgage and the judgment in favor of the plaintiffs; that the defendant was the owner and in possession of property, consisting of choses in action to the amount of $917, a considerable portion of which would not be due until November 1, 1883, and a portion not due for two years, and other personal property of the estimated value of $112, besides a crop of growing cotton, twenty-five acres, the value of which was not estimated. — 337 — On hearing the report of the referee, the judge ordered that a receiver be appointed of all the property of the defendant set forth in the report, “with power and authority to sell the same, including the proceeds of the crop above named, or so much thereof as may be necessary to satisfy the judgment in the above stated case, with interest thereon, and all the costs and disbursements of this action; * * * that the receiver above named have leave to bring action for the recovery of property of the defendant in execution in the hands of any other person; * * * that the defendant, W. C. Foster, deliver and turn over all of the said property to the said receiver immediately upon the service of this order, and that from the proceeds of said sale the said receiver shall pay all the costs of this action, including the costs of proceedings supplementary to judgment and dollars fee for attorneys of plaintiffs, to be taxed by the clerk of court, together with the judgment and interest thereon and disbursements.” After this order the clerk, without holding any reference or taking any testimony, made a taxation of costs, in which, amongst other items, was the following: “.Judgment-creditor, under section 321 of code (fixed sum), $15.00.” The defendant appeals upon sixteen grounds set out in the record, but which need not be repeated here, as several of them involve the same questions. We will therefore proceed to consider the various questions which we understand to be raised by the grounds of appeal. The first is whether there was error in refusing to dismiss the proceedings upon the ground that the copy of the order requiring the defendant to appear before the referee and answer touching his property had no seal to the clerk’s certificate. It is very clear that this defect in the copy served furnished no ground for dismissing the proceedings. It could, at most, only avail the defendant on a motion to set aside the service of the order as not a true copy of the original, or as not duly authenticated, so as to require a new service. But as the defendant appeared and was fully examined, and as the object of the service was to give the defendant notice, it is now too late to make even that objection. The second, eighth, and ninth grounds are based upon the proposition that the execution was satisfied by the levy on the — 338 — stock of goods. It is quite true that a levy is prima-facie satisfaction to the extent of the value of the property levied upon, but when it is shown that the levy has not produced satisfaction, and has been otherwise disposed of, the • presumption of satisfaction is rebutted. May v. Hancock, 1 Rice Dig., 303; Peay v. Fleming, 2 Hill Ch., 99; McElwee, v. Jeffreys, 7 S. C., 228. Here the levy had been properly disposed of, by being released upon the ground that the property levied upon belonged to another person, inasmuch as it was covered, by the mortgage in favor of Dreyer, the condition of which had been broken, whereby the legal title had become vested in the mortgagee. Reese v. Lyon, 20 S. C., 17, and cases there cited. The third, tenth, and sixteenth exceptions raise the question as to the right to appoint a receiver of all the property of the defendant. The position of the appellant seems to be, first, that a receiver could not be appointed without notice of a motion to that effect. We do not understand that defendant claims that he had no notice of the hearing before Judge Wallace of the report of the referee and the exception thereto; but simply that he had no notice that upon such hearing the appointment of a receiver would be asked for. It seems to us that the terms of the statute prescribing the course of proceeding in such cases, was sufficient notice that an application for a receiver would be made, as that was one of the legitimate, if not necessary, steps to be’taken, and, therefore, no specific notice that a receiver would be applied for was necessary. Secondly, the appellant contends that the judge could not appoint a receiver without first ascertaining whether any other supplementary proceedings were pending. Section 318 of the code prescribes that before the appointment of a receiver, “the judge shall ascertain, if practicable, by the oath of the party, or otherwise, whether any other supplementary proceedings are pending against the absent debtor.” The object of this provision is to prevent the appointment of two receivers for the same property, and although it does not, affirmatively, appear that inquiry rvas made as. to whether any other proceedings were pending against the debtor in this case, yet neither does the contrary appear, and in the absence of any evidence to the contrary we must presume — 339 — that the judge did his duty, and did ascertain (whether by the oath of the debtor, “or otherwise,” is immaterial) that no other proceedings were pending at the time. Thirdly, the appellant contends 'that the examination of the judgment debtor disclosed sufficient property, subject to levy and sale, to pay the plaintiff’s judgment, and therefore no receiver should have been appointed, or at least all of the property of the judgment debtor should not have been turned over to him. It is true that there are authorities cited by appellant which would seem to support this view, but these cases are based upon the analogy of proceedings in a creditor’s bill, for which supplementary proceedings are to some extent a substitute, but theyare not subject to all the rules governing the chancery practice under a creditor’s bill. Hence, while under that practice, where property was found subject to levy and sale under execution, the court of chancery would, at one time, have granted an order suspending the proceedings until the creditor could proceed to sell under his execution,, this was because of the fact that equity and law were administered by different tribunals, and as the powers of the court of equity were only invoked, in aid of the law court, such powers would not be exercised where such aid was not necessary. But since the same court now possesses the powers of both of the former courts, the former practice is inapplicable, and there is now no reason why property subject to levy and sale may not be reached under supplementary proceedings. Heroy v. Gibson, 10 Bosw., 591; Todd v. Crooke, 4 Sandf., 694; 1 Code Rep., N. S., 324. As to the objection that a receiver should not be appointed for all of the property, but only for so much thereof as may be necessary to pay the debt, we can only say that we know of no authority for such a proceeding, which would be somewhat anomalous in character, and involve unnecessary expense and delay, for it is difficult to understand how the court could, in advance and without an inquiry on the point, ascertain how much would be necessary; in fact, the only certain. means of ascertaining it would be by a sale. The fourth exception assigns as error the failure to require the receiver to give bond. The statute does not require that a bond — 340 — shall be exacted of the receiver, and although it is the usual and far better practice to require a bond, yet it is not essential. High Rec., §§118, et seq. We cannot, therefore, say that there was any error of law in failing to require the receiver to give bond. The fifth, sixth, and twelfth exceptions raise the question as to allowing a fee of $15 to the attorneys for the plaintiffs. Section 321 of the code provides: “The judge may allow to the judgment creditor, or to any party so examined, whether a party to the action or not, witness fees and disbursements, and a fixed sum in addition, not exceeding thirty dollars, as costs.” It will be observed that under this provision, “the judge may allow * * * a fixed sum * * * as costs.” And the allowance is “to the judgment creditor, or to any party so examined” — not as a fee, but as costs. We see no authority under this section for the allowance of any fee to the attorneys for plaintiffs; and even if it could be so construed, the sum must be a sum fixed by the judge, and not by the clerk, for the judge having heard the case, has better means as well as better capacity to determine the amount which should b'e allowed, than the clerk, and this is the express provision of the statute, doubtless for the reason above indicated. We think, therefore, that the judge erred in allowing a fee to the attorneys for the plaintiffs in an amount to be fixed by the clerk. The order appealed from should be modified in this respect. It is true, as held in Bradley v. Rodelsperger, 6 S. C., 291, that where it is desired to review a taxation of costs by the clerk, the proper practice is by motion, in the court below, to correct ‘such taxation, and the appeal should be from the decision on such motion; but where, as in this case, the clerk has undertaken to carry out an erroneous order of a Circuit judge, in reference to the taxation of costs, such erroneous order may be appealed from, and the taxation thereby corrected. We are not able to perceive the relevancy of the seventh exception;1 but as matter of fact, the referee did find that the levy was made subject to Dreyer’s mortgage, and the Circuit judge does not controvert such finding, so that we do not see upon what this exception rests. — 341 — The eleventh exception complains that the costs of the referee and of the plaintiffs were erroneously taxed. No specific errors are pointed out either in the exception or the argument, and the exception is too general to require notice. But in any event, under the case of Bradley v. Bodelsperger, supra, we could not inquire into the correctness of the taxation of costs, there having been no motion below to correct such taxation. The thirteenth exception claims that there could be no order disposing of the judgment debtor’s property without making Dreyer a party. As the order does not purport to interfere in any way with the property covered by Dreyer’s mortgage, we are unable to perceive what interest he could possibly have in the matter. ' The fourteenth exception assigns it as error that the order appealed from contains no provision for the return of such property as may not be necessary for the payment of plaintiffs’ debt and costs. The receiver being but “the hand’of the court,” we must assume that the proper disposition of what property may remain, after satisfying the claim of plaintiffs, will be made, and we cannot say that there Avas any error of law in failing to incorporate such a provision in the order. The fifteenth exception alleges error in ordering the receiver to sell the property mentioned in the order. The point of this exception, as developed in the argument, seems to be that there was error in ordering a sale of all of the property mentioned in the order, embracing choses in action, as well as other personal property. Bule 70 of the Circuit Court, in reference to the poAvers of receivers, clearly indicates that a receiver should not be authorized to sell choses in action, unless they represent “desperate debts;” but that his duties, in respect to that class of property, are to sue for and collect the same, or “to compromise and settle such as are unsafe and of a doubtful character.” We think, therefore, that the terms of the order appealed from, Avhich are broad enough to authorize the receiver to sell any or all of the choses in action, should be modified in this respect, so as not to authorize the sale of any of the choses in action, except those which represent “desperate debts.” The judgment of this court is that the order appealed from be — 342 — modified according to the views herein announced, and that in all other respects it be affirmed. Footnotes [1] “In not holding that tho sheriff’s levy was subject to Dreyer’s mortgage.”