St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1895-04-06
FOR EUGENE UNDERWOOD.
Judge Kelly Issues the Order
With an interesting Mem
Orandum.
A GREAT MANY INjUMCTI0NS
Figure in the Proceedings, in
Which w. P. Merriam Is
Prominent.

Judge Kelly yesterday made an
order for the appointment OF a re-
| ceiver for Eugene Underwood Jr.,
| on the application of w. r. Merriam.
! The case is peculiar one, and in
wolves some nice questions of law,
! so the courts reason for making the
/ order is of more than usual interest.
| Martha NJ. Read and Phil B. Thomp-
/ son were about to secure judgment
! against Underwood, the former for
5000 and the latter for $500, but
/ Merriam, who has a claim of $1,000,
secured from Judge Egan a temper
airy injunction to restrain them from
| taking judgments. Read and Thomp-
son then secured counter injunctions
to prevent Merriam from taking
any advantage by getting judg-
ment while they were restrained
from doing SO. Then Merriam APP
piled for a receiver, and the case
came up before Judge Kelly. Judge
! Kelly attached the following mem
oranduTn to his order:
"In the case of Vanish VS.. the
Pioneer Fuel company, 81 Northwes-
tern Reporter, 3S7, the supreme court
has construed chapter 148. general
laws CT 1891, Familiarity known as the
insolvency law, and in particular,
Sections /, 2 and 5, as amended by
Chapter 80, general laws 1889. The
court says:
Constituting together the provisions
of Sections /, 2 and 8, above quoted
and referred to, and other provisions
of this statute we are of the opinion
that the legislature intended to i'm
pose on the
INSOLVENT DEBTOR,
the positive duty of preventing pre-
ference among his creditors If the
debt is due, and he has no bona fide
defense, it is his duty, under: the sta
tute, to prevent such a preference, by
making an assignment before the pro-
ceedings for the collection of the debt
have reached stage where he can
not prevent a preference. If he will
fully fails to preform this duty, it
must be held that he intended the
consequences of his own unlawful
emission; that he intended to per-
nit such creditors to take q prefer
ence; that he intended that such
creditor should have a preference.
''But it is claimed here that until the
time for answer had expired in the
Thompson and Read suits. the insol-
vent, Underwood. still had time to
assign, and could not be adjudged to
have omitted any legal duty until
clearly in default by lapse of this time.
When Underwood was served with the
order to. show cause in this matter.
he had clear notice that his creditor,
the petitioner, charged him specifical-
ly with being insolvent and to intend
to prefer ibis other creditors, Thomp-
son and Read, by failure to answer to
the complaint of each. -
''If these charges were not true, it was
his duty to answer in those actions and
| in this proceeding. He has done Meth
er. The petitioner was not obliged to
wait until Thompson and Read had
entered judgment, and sue to set it
aside so far as it should become a lien
on real estate. as in the Vanish case
supra. He had right to proceed as
he did and the court had clearly the
power, and did not in any wise abuse
it to stay the entry OF Judgment in
those cases until this order to show
cause could be heard.
ut is very ordinary exercise of the
restraining power of the court to pre-
vent the contamination of legal
wrongs. The manner of the notice
given to Thompson and Read is clear.
ly, by the law, left to the courts dis
erection, and the notice given was the
very best possible notice, to their at
terneys of record"
All the parties are to appear in court
this morning, when the receiver is to
be appointed and his bond fixed. The
attorneys for Read and Thompson will
appeal the case. They maintain that
Judge Kelly is in error in, deciding it
in accordance with the rule laid down
by the supreme court In the Vanish
case as the cases, they claim, are en-
tireiy different.