Case ID: njl_5/html/0498-01.html
Source: Caselaw Access Project
Author: {"author": "Kirkpatrick C. J. \n      Southard J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Isaac Stansbury against The Patent Cloth Manufacturing Company. 
       William Lawrence against the same. Isaac Marsh against the same.
    in case—Motion to amerce the sheriff of Essex county.
    
    Amercement of sheriff.
    Construction of the ai for relief of creditors against corporations.
    THE writs of summons, in these cases, were all returned “ not summoned” on the last Tuesday of February 1817. The necessary affidavit that the process could not ;be served, was made and filed ; and the court directed an order for the appearance of the defendants, to be entered upon its minutes at February term 1817, and published pursuant to the third section of the act passed 31st January 1817, for the relief of creditors against corporations. The defendants did not cause their appearance to be entered, and at tiie term of May 1817, the clerk by direction of the court, entered an appearance for them. The causes were regularly put at issue, and at the circuit in Essex, in September 1817, were tried. There was a verdict for Stansbury for 292 dollars, 37 cents, costs 90 dollars, 25 cents ; for Lawrence, for 550 dollars, 28 cents, costs 90 dollars, 38 cents; and for Marsh, for 97 dollars, costs 73 dollars, 60 cents. The whole of these verdicts amounted to 1193 dollars, 88 cents. Judgments were enter*ed on the 11th of November 1817, and executions were issued on the 18th of the same month, and on the same day delivered to the sheriff of Essex, and by him levied on real estate of the defendant, and advertisements for the sale immediately made: several adjournments took place, and the sheriff, at last, altogether refused to sell under the executions. Writs of venditioni exponas were also issued, returnable to May term 1818. The sheriff paid 600 dollars on these executions. '
    On the 7th of March 1817, the defendant confessed a judgment to Joseph Shotwell for 1013 dollars, 60 cents, and another to John Jacobs and Joseph Shotwell for 5234 dollars, 37 cents, which judgments were recorded in the Essex Pleas as of January term 1817. Executions were issued on these judgments and on the 8th of March 1817, delivered to the same sheriff of Essex; and the said real estate of the defendants’ sold, on the 3rd of October 1817, for the sum of 4200 dollars, subject to prior incumbrances. John F. Ooxe was the purchaser; received a deed from the sheriff, and has since sold to Abijah Weston. The sale, by the sheriff, was subsequent to the trials at the circuit, but previous to the judgments at bar. Coxe and Weston were present at the sale, and had notice that the first mentioned actions were depending, but that no judgments had been entered. The whole property, real and personal, of the defendants, in Essex, was sold under the executions in favour of Jacobs and Shotwell and of Shotwell. The real estate was bound by mortgages to an amount exceeding 11,000 dollars, which has since been paid by the purchaser, Weston, and he has also expended 1500 dollars, in necessary and useful repairs.
    The sales amounted to 7231 dollars, 75 cents, and the sheriff had dollars, cents, remaining in his hands, after paying the judgments of Shotwell and of Jacobs and Shotwell.
    
    The actions by Lawrence, Stansbury, and Marsh were the first which -were commenced against the defendant, and the orders for the appearance of the defendants, in those actions, were the first which were made.
    Several actions, against the defendant, were brought in the Common Pleas of Essex, and like orders made subsequent to those before mentioned, and judgments by default obtained previous to the time that Stansbury, Lawrence, and Marsh obtained their judgments. Executions on the judgments, in the Common *Pleas, were also issued and put into the sheriff’s hands before those in favour of Stansbury, Lcmrence, and Marsh.
    
    
      The sheriff paid, out of the proceeds of the sales, dollars, cents, on the executions from the Common Pleas of . Essex, in preference to tjnose out of the Supreme Court, on which there is yet due 61 3 dollars, 88 cents, with interest from the 11th of November 1817. He also paid the whole of the judgments in favour of Shot-well and of Jacobs and Shotwell.
    
    It was submitted to the court. Whether the first mentioned actions were not a lien upon the real estate of the defendant, from the time of obtaining the orders for appearance in February 1817 ? and whether the judgments confessed in March 1817, could be preferred to those entered in November 1817 ? Whether the judgments by default, in the Common Pleas, are also to be preferred to these last ?
    If the judgments in the Supreme Court are entitled to priority over all others, then it was agreed, that the sheriff be amerced in the sum of 613 dollars, 18 cents, with interest from the 11th of November 1817. If they have not priority over the judgments confessed to Shotwell and to Jacobs and Shotwell, but have priority over the judgments by default in the Common Pleas, then the sheriff to be amerced in dollars, cents, the sum which he paid on the last mentioned actions.
    
      Scudder, for thp plaintiffs,
    in support of the motion to amerce, contended, that the “ Act for the relief of creditors against corporations,” passed 31st of January 1817, created a lien on the property of the defendant after the entry of the order mentioned in the third and fourth sections. This act being in force from its passage, and the order of publication, in these suits, being entered on the last Tuesday in February, the lien was in force from that day, and the judgments which w'ere confessed subsequently, viz. on on the 7th of March, must hold the land subject to it. The sales which were made, were subject to all prior incumbrances; these actions were such, and the purchasers were fully informed of their existence, and could not, therefore, complain.
    When these executions came into. the hands of the sheriff, he advertised, and he ought to have sold, such right, as there remained to the defendant, after the previous sales, and which had been bound by these For not proceeding to sell he is subject to amercement.
    *Bufc iu another respect, this motion ought to be sustained. The law made these actions a lien on the land. The defendant could not sell until it was satisfied. But the confession of judgment to Shotwell and to Jacobs and Shotwell, was, in a liberal view of the law, and within its object, a sale. It, in effect, conveyed the title out of the defendant. It was therefore void,, and so were all the proceedings under it; and the proceeds of the sale ought to have boon devoted to these executions. Jacobs and Shotwell liad no claim to them. The legislature intended to give a full remedy against corporations; to secure their property from the commencement of the suit. And the judgments to Shotwell and to Jacobs and Shotwell must be viewed in the light of a sale made where there was a previous lien. Such sale is good, as between the parties, but the thing sold is subject to the lien. These executions ought, therefore, to have preference: and ho cited 2 Pen. 734.
    
      ITornblower for the sheriff.
    1. The construction contended for, by the plaintiff, would involve creditors of corporations in greater difficulties instead of relieving them. If every action commenced, before an actual sale under execution, was a lien in the sense contended for, the property could never be sold until judgment was entered in every action; or, if sold, would. inevitably be sacrificed, as no persons could purchase with safety subject to the contingent result of pending actions. For example: in the present instance the purchaser, Weston, had he been advised that the premises were liable to be resold on the judgments thereafter to be entered in the various actions then pending against the corporation, some of which "are yet undetermined, instead of bidding enough to pay the judgment creditors, at whose suit the property was sold, could not with any saiety have given more than a nominal price, or rather could not have purchased at all, not knowing how much the premises would cost in the end. Thus the first judgment creditor, whether his judgment should be obtained -by confession or by the ordinary course of the court, would be in a worse situation than the last, for he would have less chance of raising his demand out of the property. Besides, the commencement of an action, under the statute, after judgment entered in a former suit, but before a sale by execution, would be as much of a lien *as an action instituted before a judgment, consequently if the judgment creditor should be obliged to wait until every plaintiff had perfected his judgment, he might be delayed indefinitely. On the other hand, if he proceeded to a sale, he must encounter all the hazard of selling, subject to contingent and uncertain incumbrance; and generally a complete sacrifice of the property would be the result. But the counsel, aware of this absurdity, has attempted to assimilate a confession of judgment, by the defendants, to a grant, sale or conveyance, by them.
    It might be answered ; that a purchaser at sheriff’s sales is not bound to inquire into the regularity of the judgment, and it does not appear in the case stated, that either Coxe, the immediate purchaser, or Weston, his vendee, knew that .the judgments were by confession. But
    2. A confession of judgment is in no sense a grant or conveyance of lands, though a sale takes place under it. It might as well be said that a warrant of attorney to confess judgment is a bill of sale for a horse, because judgment may be entered thereon, execution issue, and the horse be sold under it. It is no answer to say that the intent of the legislature may be defeated if corporations may confess judgments, and thus effect a sale of their real estate. If such was their intent they have failed to express it. If corporations confess judgments fraudulently, the proceedings would be void without the aid of this statute. The question then occurs, did the legislature mean to say that corporations should not confess judgments to their honest creditors, for debts bona fide due to them? Did they mean to say that corporations, in such cases, should always stand it out and subject their creditors to the delays of a lawsuit, and themselves to a bill of costs ?
    3. The act prohibits “ a grant, sale, alienation or conveyance,” after the order for appearance entered, and it meant to do no more. It was to prevent the after suit brought, from turning their real estate into money, and thus withdrawing it from the reach of honest creditors. The action becomes a lien upon the property, as between the plaintiff and defendants, leaving other creditors to pursue their legal remedies. It would be extremely unreasonable that the action first commenced, however tardily prosecuted, however litigated, and however uncertain its event, should keep at bay other creditors whoso claims are indisputable.
    *Tho case of an attachment against an absconding debtor, cited from 2 Pen. Rep. 734, is wholly inapplicable. There the property attached is in the custody of the law, for the benefit of all applying creditors, pro rata. No priority or preference is given to the plaintiff or any other creditor. The law, in that case, looks forward to, and makes provision for the consummation of the whole proceeding, in a limited time.
    It is true the plaintiff had a lien upon this property; but a lien subject to be defeated by operation of law.
    Lands, in New-Jersey, are bound in the hands of the heir, after process served or suit instituted against him on the contract of his ancestor; so far, I apprehend, as that a sale made by him, after action commenced, would not protect the purchaser. Yet if two or more suits were brought against an heir, a sale under the judgment first obtained, though in the action last commenced, would be effectual.
    So the act authorising a sale of the testator’s or intestate’s lands, by decree of the Orphans’ Court, says, the deed shall convey all the estate &c. which the heir at law had at the time the decree for sale was made. This decree becomes a lien as against the heir so as to prevent his conveying. Yet if execution comes on judgment, against the heir, a sale under it subsequent to the decree, would be effectual.
    Lastly. It has been intimated, by the counsel, that the sheriff was bound to go on and sell; that he had no right to decide &c. The sheriff knew, as the case states, that he had already sold all the defendant’s property and estate. But the sheriff’s conduct is praiseworthy. He suspended his proceedings to give the parties an opportunity of getting the opinion of this court, and if the court are of opinion that nothing remained to be sold, on plaintiff’s execution, they will justify the sheriff and refuse the plaintiff’s motion.
    
      Attorney General, on the same side, remarked :
    that the act had been passed for the relief of creditors, not to embarrass and defraud, and the construction contended for would produce this result. The proper mode to arrive at the true intent and construction of the law, was, to inquire what was the evil which was complained of? and what the remedy? The evil here, was the conversion of the property of corporations and its removal out *of the state, or beyond the process of the court. The object was to prevent corporations from doing this. All, therefore, that the legislature had to do, was to bind the property, so that it should be subject to the claim of the creditor, when that claim should be finally decided. This was done by making the action a lien for this purpose, and no other, so that the debtor could not sell it. It never wTas designed to be carried so far as to give one creditor a preference over another.
    
      Scudder, in reply,
    supported the positions laid down in opening the case.
    The motion was argued at November term 1817. The opinion of the court was pronounced by the Chief Justice.
    
      
      
         Reversed on writ of error, post 861.
      
    
   Kirkpatrick C. J.

This is a motion to amerce the sheriff of the county of Essex, in these three actions, upon a case stated and submitted to the consideration of the court. The motion rests wholly upon the “ act for the relief of creditors against corporations,” passed the 31st of January 1817.

The act directs “ that the first process to be used against corporations shall be a summons; that if such summons shall be returned not summoned or not served, the court shall make an order directing the defendant to appear, &c.; and that after the entry of such order, it shall not be lawful for such corporation to grant, bargain, sell, alien or convey their lands, or any part thereof, until the plaintiff be satisfied his lawful demand ; that the said action shall he a lien upon such lands from the time of entry, and that the same may be sold on execution, in the same manner as if no conveyance thereof had been made by such corporation.”

Ifere these plaintiffs, in the term of February 1817, entered their respective rules upon the corporation to appear, and an appearance being entered for them, they so proceeded as to enter judgment in November term 1817, and to sue out executions and deliver the same to the sheriff on the 18th of the same month, returnable to February term following. The sheriff levied the said executions on the lands of the said corporation, on the same day, and immediately thereafter advertised the same for sale by virtue of the said execution, and after adjourning the said sale thereof, several times, now absolutely refuses to sell at all.

* While the plaintiffs were thus proceeding in their suits, to wit, on the 7th of March 1817, the said corporation confessed one judgment to Joseph Shotwell, and another to John Jacobs and Joseph Shotwell, for large sums of money upon which executions were sued out and put into the hands of the same sheriff, on the 8th of March 1817, by virtue of which he sold the said lands of the said corporation, on the 3rd of October following, subject to prior incumbrances, of which incumbrances and particularly of this action, and of the entry of those orders, the purchaser had notice. After the term of February, and before the term of November 1817, sundry judgments were entered by default under this act, against the said corporation, in the Court of Common Pleas of the county of Essex and executions thereupon issued, which said judgments and executions, as well as those of the ShotweUs, were preferred by the sheriff to the judgments and executions of those plaintiffs, and paid out of the proceeds of the said sale.

Upon this case, the counsel for the plaintiffs have stated certain questions about the priority of their lien and their judgments to those of the ShotweUs, entered by confession, and those in the Common Pleas entered by debut the real question is, whether the sheriff, upon the whole case, is liable to an amercement. I state the question in this form, because though I am n0£ willing to say that these judgments ought to be pre- ® J G ® r ferred to those, or indeed ought, at all, to be paid out of the avails of the sale, jret I think the sheriff ought to be amerced. For

1. The confession of judgment and a sale by the sheriff, in pursuance of that judgment, is in the strictest sense an alienation by the corporation, and therefore, as against these plaintiffs, is inoperative and leaves the land liable to be sold upon their' executions in the same manner as if no such conveyance had ever been made. I say it is in the strictest sense an alienation by the corporation, for it is wholly immaterial whether one actually make the conveyance himself, or constitute an agent or trustee to make it for him, or, in order to render the transaction still more solemn, go into a court of justice, and by certain forms of proceeding, procure it to be made by the officer of the law; still it is his own act. But if it be possible that I should be mistaken in this, yet I think, notwithstanding, the sheriff must be amerced. For

*?. Even if these judgments had been entered against the corporation, in invitum, and executions had been issued thereupon and-the land sold, as well it might, yet these orders, entered by the plaintiffs, gave them a lien upon it for their debts, and subjected it to their executions, as well in the hands of such purchaser as the corporation itself.

For what is a lien ? what is its nature and operation ? It is a French, word, and originally signifies a string, tie, or band, and in the metaphorical sense in which the law uses it, it signifies such hold or claim upon a thing, for the satisfaction of a debt, duty or demand, as that it cannot be taken away until the same be satisfied and paid. It is in this sense properly applicable, and I believe originally, in our books, only applied to chattels, things moveable and easily passing from hand to hand; and with respect to these, this claim which one has upon them, is metaphorically called a lien, a string, which binds them fast and holds them in his possession. In most instances in which one has such lien, if the debt or be not paid upon reasonable request and within reasonable time, the party himself may sell the chattel so held, without the intervention of any judicatory, as in the case of pledges &c.; but in this case, the act in expressly making the land liable to the plaintiff’s execution, impliedly directs that it shall be sold in that way and in no other; and this too is more analagous to the common course of this country, in selling lands for the payment of debts. In this hypothecated state then, or rather in this condition of being tied fast by this lien in the hands of the plaintiffs for the payment of their debts, this land was a proper subject to be taken in execution and sold for that purpose.

It seems to me that some confusion has arisen, in this case, from comparing this lien to a judgment. A judgment binds the land from the time of the entry, and it is in the nature of a lien upon it, in the hands of the plaintiff, for the payment of his debt; and yet if there be two or more consecutive judgments and the land be-sold upon the last, it cannot again be taken in execution and sold upon those that preceded or any of them; if they are to be satisfied at all, they must be satisfied out of the surplus of the monies arising upon such sale; and the land goes quit in the hands of the purchaser. But then it is to be remembered that this is a special provision created by statute, in case of judgments *only, and not according to the course of the common law, in the case of liens generally. For considering the judgment as a lien upon the land from the entry, if it were left as at common law, the sale upon the last judgment would not preclude another sale upon the preceding. In this case there is no such special provision, nay indeed it is, on the contrary, expressly directed that the land shall be sold to satisfy the lien, any other conveyance to the contrary notwithstanding.

For his refusal to proceed upon these executions, and to sell this land, therefore, for the benefit of the plaintiff, the sheriff must be amerced in the sum settled and agreed upon by the parties.

Southard J.

The case presented upon this motion, shews that the sheriff has performed his duty strictly, so far as relates to the levy upon,' and subsequent sale of the property of the defendant. It further shews that he has not improperly retained any part of the money, but has paid the whole to persons claiming it, under the executions in his hands, according to the dates of the judgments and executions; paying those first which were first obtained and issued. This, in ordinary cases, would have been correct, and what the law required him to do. It is supposed however, that these judgments and executions upon which the motion to amerce is made, were entitled to priority, notwithstanding they were the last; and this right to priority, is supposed to arise from the facts; that in these actions, an order for the appearance of the defendant, was made, under the third section of the “ Act for the relief of creditors against corporations,” passed 31st- of January 1817; that this order was made, before any other orders or judgments were entered, and thus the actions became a lien, which must first be satisfied. The motion therefore, will rest on the construction of this third section, and terminates in the inquiry : what kind of lien is created by the entry of this order ? Is it such a pure, unqualified lien, as will hold the property, against every claim of every kind, and give the plaintiff a preference to other judgment creditors? I cannot view it in this light. Let us look at it. The first section of this law, directs the mode in which, process shall be served on corporations. The second section, determines the effect of such service. The third section, directs the court, to enter an order for *the appearance of the defendant, where the sheriff cannot serve the summons. The fourth section, which governs this case enacts, “ That it shall not be lawful for any corporation against whom any such order shall be made, after the entry of such order in the minutes of the court, to grant, bargain, sell, alien or convey, any lands, tenements or real estate, cfec. of which such corporation shall be seized, or entitled to, at the time of making such order, until the plaintiff, in the action, shall be satisfied his legal demand, or until judgment shall be entered for defendant, and the said action shall be and remain a lien on such lands, tenements and real estate, from the time of entering the said order for publication, in the minutes of the court, and the said lands, tenements, and real estate> shall and may be sold on execution, as if no conveyance had been made by the said corporation.”

, It nas been supposed that there are two leading ideas, in this section. First, that the corporation shall not grant, bargain, sell, alien or convey, after the order is made. And second, that after this order, the action becomes a lien on the land, which follows it every wrhere.

The first of these propositions is unquestionably true. After the order for publication is made, the defendant has no longer the power to sell or transfer his estate, until the determination of the cause. He cannot sell or convey it away. It must remain subject to the just and legal demands of creditors. But I do not perceive that this will at all avail the plaintiff upon this motion. It has indeed been argued, that a confession of judgment was in effect, a conveyance of the land, as it occasioned its transfer. But this argument seems to me, to confound definitions and distinctions of words. It might as well be said, that a confession of judgment was a sale of personal goods and chattels, because they were sold under the execution. The statute takes away from the party, a portion of the ordinary right over, and use of his property, and ought not to be extended beyond the usual meaning of the terms. He may not sell or convoy, but he may confess judgment. A judgment may be entered against him. But the action is to be a lien on the lands; and they may be sold under the execution, as if no conveyance had been made; and it is argued, that this lien is unqualified and must first of all be satisfied. I apprehend, that an error on this part of the subject, arises from giving to the word lien, a force which it was never intended to possess. What *was the evil which the legislature intended to remedy, by this law ? Before its passage, various companies, designed to effect a great variety of objects, had sprung up in the state, with mushroom growth, and were incorporated. In some cases, not one member of the corporation, resided in the state, and when it became necessary to sue them, there was nobody upon whom process could be served ; and by a sale of the estate which they held) they altogether eluded the payment of their debts. It was an evil worthy of legislative interference ; and this act was passed, as well to provide a mode in which process should be served, as to retain the property in such way as to make it answerable to the just demands against the corporation. This last, was the sole and exclusive object of the fourth section. It was for this purpose, and this only, that the action was made a lien on the land. It was to be an effectual lien between the corporation and the creditors; so that the one could not part with it, to the injury and defrauding of the other. But it never was designed, to give a preference to one creditor over another, and by the mere entry of an order on the minutes of a court, in favour of one, to prevent another from obtaining that priority which the regular prosecution and speedy termination of his suit would give him. The sole object, was to keep the property unchanged, within the process of the court. This is manifest too, not only from. the reason and object of the law, but from its very words. It does not say that the action shall be a lien, and there stop ; it adds, that the lands may be sold on execution, as if no conveyance had been made. On what execution may it be sold ? Not alone on the execution in favour of the creditor who obtained the order, but on any execution, in favour of any creditor. After this order is entered, if the corporation sell the land, it shall nevertheless be subject to the claims of judgment creditors, so long as that action is depending.

A different construction, of the statute, would lead to consequences the most serious and unjust. There is in it, no provision to compel the plaintiff who has obtained the order, to progress with and terminate his suit. He can suspend it, and if it be an unqualified lien, no judgment creditor can have the land sold, except subject to his uncertain claim, which may swallow up the whole. If this be so, all that a corporation has to do, when it is in difficulty, is to induce a friend to commence a suit; get his *order; let the cause delay and laugh at honest creditors. But again. A claim which has regularly progressed until within an hour of judgment, may, by this construction, bo postponed to one, which, has only just been put in suit.

Nor does the evil rest here. If the doctrine contended for, be true, the lands of a corporation must be sold subject to as may lions of this kind, as either friendship or fraud may have been induced to create; and who could purchase under tlie uncertainty of their extent? A finer device to make property sell for nothing, and cheat creditors, could not have been contrived by legislative ingenuity. Such a construction of the law, never can be given.

In this case, I am of opinion, that the law effected its object by keeping this property within the process of the court and the reach of creditors: That the sheriff lias done right in paying the money arising from it, upon the judgments and executions, according to'their dates; and that the motion for amercement ought not to prevail.

Judgment of amercement entered.