Court Opinion

ID: 7965682
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:50:22.458883+00
Date Added: 2024-06-11T16:34:38.111017
License: Public Domain

Vanderburgh, J.
On the 3d day of August, 1887, the plaintiffs, who had previously obtained judgment against the defendants, Wilkins & Buxton, in the district court of Ramsey county, caused process of garnishment to be served upon Edwards, garnishee, and on the same day served the summons and the notice in such cases required upon the defendants, judgment debtors and alleged insolvents. Edwards at that (time held in his hands a large sum of money belonging to them, being the proceeds of their property. The garnishee summons was made returnable on the 15th day of October, 1887, at which time the garnishee appeared, and made disclosure, but the defendants *541did not appear. On the 9th day of November following, other creditors petitioned for and obtained the appointment of a receiver, under section 2 of the insolvent act of 1881. Upon that application there were other and subsequent acts of insolvency charged, in addition to suffering their property to be attached under the garnishee process.
The insolvent can only avoid the appointment of a receiver, on the application of his creditors, by the exercise of due diligence to prevent particular creditors from obtaining a preference. Under the insolvent law, (Laws 1881, c. 148, § 2,) he must not “omit to do any act which he might lawfully do to prevent any one of his creditors from obtaining preference over his other creditors.” Then follows a specification of certain acts or omissions, viz.: “Or if he shall not, within ten days after any levy by attachment, execution, or garnishment made against him, make an assignment of all his property, * * * or within such time, in good faith, institute proceedings to vacate the attachment and execution, or garnishment, or secure a release of such levy, and defend against the said garnishment at the first opportunity.” The dispute in this case is whether the 60 days allowed creditors to apply for the appointment of a receiver on - account of the alleged garnishment began to run at the expiration of 10 days thereafter, or upon the return-day of the garnishee summons, when the debtor was entitled to appear, and take part in the examination ; and the question involved depends upon the interpretation of the words, “and defend against the said garnishment.”
The general purpose of the statute is clear enough, though not expressed in concise and apt language, and the words last quoted do not qualify or detract from the force and effect of the preceding specific provisions, and are, perhaps, used in the same general sense as the clause first above quoted, as intended to require the prompt resort to any lawful proceeding necessary to defeat the garnishee proceedings. But, whatever may -have been the purpose of the legislature in the use of this language, it obviously has no application to the facts of this case. It is safe to say that the failure of the defendants, who are admitted to have been insolvent, to take any proceedings which they might lawfully take, within 10 days after the *542garnishment, for the purpose of securing a release of the levy, was an omission which, under the provisions of the statute, authorized the creditors to institute the insolvency proceedings. It cannot be that when property has thus been levied on, after judgment has been rendered in the principal action, the proceedings are to be held in abeyance, merely to give the defendant an opportunity to appear at the return-day of the garnishee summons. The statute, (Gen. St. 1878, c. 66, § 198,) as amended, (Laws 1881, o. 55,) provides that “when property, money, or effects has been garnished,” at any time, whether before or after judgment, the defendant may secure a release of the same, by executing the bond as therein provided. Unless the garnishment could have been “vacated,” or the defendants had paid the judgment, there was no other means which they could have resorted to in this case to defeat the levy and protect the property, “or defend against the garnishment,” except by giving the bond as provided in the statute last referred to. And therefore, under these circumstances, it was clearly the duty of the defendants, if they desired to avoid insolvency proceedings, to have proceeded promptly, and at least within 10 days after the garnishment, to procure a vacation or release of the levy. Upon their failure to do so, their creditors might immediately file their petition. The 60 days had therefore run when the petition in this case was filed, and the court could not take cognizance of the garnishment in question as a ground for its order appointing a receiver, nor was it subject to or vacated by the insolvency proceedings.
Order reversed.