Farmers State Bank v. Berglund

Johnson, J. The facts necessary to an understanding of the issues on this appeal are as follows: On the 13th day of February, 1922, judgment by default w?as entered in behalf of the plaintiff and against the defendant in the district court of Foster county in an action brought upon a promissory note executed by the defendant to the plaintiff. Thereafter, on the 30th day of July, 1923, an execution was issued and on that day delivered to the sheriff, commanding him to satisfy the judgment out of any personal property belonging to the judgment debtor in the county, and, if such personal property prove insufficient, out of the real property of the debtor; the sheriff who also in such execution directed to return the same within sixty .days to the clerk of the district court of Foster county. On the 7th of August, 1923, the sheriff delivered to O. B. Graven a notice to the effect that on that day he attached all personal property and real estate belonging to the judgment debtor in the possession of the said Craven. On the same day a notice of levy was served upon the judgment debtor advising him that the sheriff had on that day levied upon “all personal property, chattels, etc. and real estate belonging to A. Berglund and held in your possession.’' Thereafter, on the 15th day of October, 392-3, a notice was served on C. B. Craven “individually and as.attorney for defendant” in the following language: “Take notice that demand is hereby made of you to disclose any and all property of any kind whatsoever which you have in your possession or which you had in your possession at the time of levy of execution in this case, belonging to defendant A. Berglund. You wdll please make certificate as required by law in such cases.” Thereafter, on the first day of November, 1923, the said Craven, not having made any certificate as demanded, the attorney for the plaintiff applied to the Judge of the district court of Foster county for an order requiring C. B. Graven to appear for examination under .oath, pursuant to the provisions of § 7551, Comp. Laws, 1913, as a person holding property of the defendant; on that day the court made an order citing the said Craven to appear in person on October 28, 1923, to answer under oath questions propounded to him pursuant to [843] the provisions of §§ 7720 and 7751, Comp. Laws, 1913. Craven appeared, pursuant to the order, and “demurred to the proceeding.” The demurrer is not made a part of the record on appeal. The court sustained the demurrer and Craven was not required to answer any questions. According to the memorandum opinion, the trial court held that the execution, not having- been returned within sixty days, was functus officio and also that the statutes of the state were not complied with in this, that a proper notice of levy was not served upon the judgment debtor. The court, accordingly, made its order denying- the application, and from this order the judgment creditor prosecutes this appeal.. Iii the so called notice of levy served upon C. B. Craven, aforesaid, no property is described, nor is it alleged therein that there is any property of any character in the possession of Craven; in the return made by the sheriff, there is no allegation or statement to the effect that Craven ever had any property in his possession, belonging to the defendant, or that the sheriff believes or has reason to believe that he ever had any such property. In the affidavit of the attorney for the judgment- creditor, appellant herein, made and used in support of the application to the trial court for an order requiring Craven to answer questions, as heretofore stated, there is no allegation or statement that Craven has or ever had in his possession any property belonging to the defendant, or that the affiant 'believes or has reason to believe that Craven has or ever had any such property in his possession or under his control. In the demand served upon said Craven by the sheriff on the loth of October, heretofore referred to, there is no such allegation or statement. In short, there is -no allegation or statement in any paper or document in the record, pertaining to the attachment proceedings, in which it is alleged that Craven has, or ever had, or that any person believes, or has reason to believe, he has or ever had any property in his possession or under his control belonging to the judgment debtor. Craven says he is not now and never was attorney for the judgment debtor. He says he appears as amicus curias.. The proceeding is brought primarily under § 7551, Comp. Laws, 1913, altho § 7720 is also referred to in the affidavit in support of the-application for the order for examination. Section 7551 reads as follows: “Upon the application of the sheriff, holding a warrant of attach [844] ment, the president or other head of a corporation, or the secretary, cashier or managing agent thereof, or a debtor of the defendant, or a person holding property, including a bond, promissory note or other instrument for the payment of money belonging to the defendant, must furnish to the sheriff a certificate under his hand, specifying the rights or number of shares of the defendant in the stock of the corporation with all dividends declared or incumbrances thereon; or the amount, nature and description of the property held for the benefit of the defendant, or of the defendant’s interest in property so held, or of the debt or demand owing to the defendant, as the case requires. If such officer, debtor or individual refuses to furnish such certificate, or if it is made to appear by affidavit or otherwise to the satisfaction of the court or judge thereof, that there is reason to suspect that any certificate given by him is untrue or that' it fails to set forth fully the facts required to be shown thereby, he may be required by order of the court or judge to attend before him and be examined on oath concerning the same and obedience to such order may be enforced by proceedings as for a contempt.” This case was tried and presented in this court on the theory that § 1551, supra, was applicable in proceedings on execution, although this statute refers expressly to proceedings in attachment. We have grave doubts as to the propriety of the use of the remedy provided in this section, under the facts in this ease. Inasmuch as both sides, both in the trial court and on this appeal, have assumed that the remedy provided in this section is available in execution proceedings, we shall dispose of the case on that theory. It is clear that the legislature intended, by this provision, to enable a judgment creditor to obtain a certified statement from the official head of a corporation, or from a person holding property belonging to the debtor; it was, we believe, the intention of the legislature to give the court the power to require such a person to be examined under oath concerning the same in case the certificate were not issued on demand, or were insufficient or inaccurate as to the facts. We are satisfied, however, that this statute does not authorize the sheriff to make wholesale demands of this sort on any person or persons his fancy may suggest, regardless of whether or not such persons ever had [845] or are believed to have property in their possession or under their control subject to attachment and belonging to the judgment debtor. We are satisfied that before the judgment creditor was entitled to an order from the trial court requiring Craven to appear and be examined under oath, some showing should have been made by the judgment creditor indicating either that the person sought to be brought in had property of the judgment debtor in his possession or under his control, at the time demand was made for the certificate, or that the judgment creditor believes, or has reason to believe, that he had such property in his possession or under his control. We do not hold that the application or the moving papers must be drawn with the technical accuracy and completeness of pleadings in a civil action; what- we do nold is that there must be a prima facie showing, under this statute, upon the face of the moving papers' that the proceeding is not purely speculative and idly inquisitorial, before the trial court is authorized to order individuals to appear before it for examination under oath with respect to property belonging to the judgment debtor. It is not intended by this statute to authorize the sheriff and the trial court to institute dragnet proceedings by which individuals may be hailed into court by the simple device of serving a demand upon them without, at the same time, making an appropriate allegation in the moving papers before the court that the applicant, or some one properly acting in his behalf, believes, or has reason to believe, that the person to be brought in had some property of the judgment debtor, subject to execution, in his possession or under his control at the time of the demand. In Hong Kong & S. Bkg. Corp. v. Campbell, 35 N. Y. S. R. 637, 13 N. Y. Supp. 132, referring to proceedings under a statute substantially like § 7751, the court says: “The proceeding is collateral and despotic, inasmuch as the person proceeded against, when the statute is enforced, is to be interrogated about the claim, subject to all the machinery of the law in that regard in a proceeding in which he is neither plaintiff nor defendant, but in which his examination can be used against him.” The application was clearly insufficient and the court properly refused to order or permit an examination when the person sought to be examined objected thereto. It is true that the court assigns other reasons for its ruling. It is not necessary to inquire into the legal [846] questions suggested by the grounds on which the trial court puts its decision. The application was insufficient and, for reasons heretofore stated, the action of the trial court was clearly correct. The judgment of the trial court is affirmed. Bronson, Ch. J., and Nuessle, and Christianson, JJ., concur. Mr. Justice Birdzell did not participate.