Court Opinion

ID: 5445254
Source: CourtListenerOpinion
Date Created: 2022-01-08 18:09:35.971524+00
Date Added: 2024-06-11T08:32:09.858421
License: Public Domain

Harrison, J., dissenting.—
I dissent. The right of a court to adjudicate an individual to be insolvent is purely of statutory creation, and can be exercised only in the terms and under the conditions prescribed by the statute. Any- attempt to confer the control and management of the estate of one person upon another against the will of the owner, even for the purpose of subjecting the same to the payment of his liabilities, is an extraordinary interference with the natural right of the individual to the management and control of his property, and can be upheld only by some positive statute authorizing such proceeding. Such power is not to be presumed to exist, nor is its exercise to be sustained by any forced or unusual construction of the terms of a statute, but must find its support in clear and explicit language.
Section 8 of the Insolvent Act of 1880 provides that “an adjudication of insolvency may be made on the petition of five or more creditors, residents of this state, whose debts or demands accrued in this state, and *108amount in the aggregate to not less than five hundred dollars.” And section 9 provides: “ Upon the filing of such, creditors’ petition, the court shall issue an order requiring such debtor to show cause, at a time and place to be fixed by the court, why he should not be adjudged an insolvent debtor, and at the same time, or thereafter, upon good cause shown therefor, said court may make an order forbidding the payment of any of the debts, and the delivery of any property belonging to such debtor, to him or for his use, or the transfer of any property by him.”
The court acquires no jurisdiction to take any step or make any order until after there shall have been filed with it “such” a petition as is prescribed by section 8. One of the essential requisites of this petition is, that it be made by five or more creditors “who are residents of this state.”
Although, for the purpose of making such petition, a partnership is a creditor within the meaning of this section, such “creditor” is not a resident of this state unless all the members of the partnership are residents of this state. Neither of the individual members of the partnership is a “creditor” of the insolvent within the meaning of this statute, but such “creditor” is the partnership made up of all its members. No action can be maintained against a debtor upon a partnership obligation, unless it be brought by all of the partners, and as the debtor is not liable to an action by either member of the partnership, such member is not his “creditor” for the purpose of making a petition that he be adjudicated an insolvent.
The insolvency laws of a state are enacted for the benefit of its own citizens, and are limited in their operation to the citizens of that state. It is in recognition of this principle that the statute above quoted requires that the petitioning creditors shall be residents of this state. But if it should be held that the petition can be *109made by partnerships of which some or any of the members are non-residents, this legislation would be for others than residents of this state. Such purpose of the legislature should be specifically declared, rather than that the court should so decide from any uncertain language found in the statute. The fact that the business of the partnership is carried on in this state does not make, or tend to make, the partnership itself a resident of this state, and whether one, or any number less than all, of its members are non-residents, is immaterial if once it be admitted that it is not essential that all of its members be residents here. It might be, and often is, the case that the non-resident is the chief member of the partnership, while the resident members, although a majority in number, have but a slight interest in the business, and consequently might not represent a sufficient amount of the debt to bring their interest within the minimum requirement of five hundred dollars.
In the present case the court finds that one of the petitioning creditors was the California Jewelry Company, a partnership consisting of four members, and doing business in this state; and that H. Levison, one of its members, was not a resident of this state at the time the petition was signed, but at “ all said times was, and is, a resident at Hamburg, Germany.” The California Jewelry Company was not therefore a creditor authorized to sign a petition for the adjudication of the debtor as an insolvent, and inasmuch as the petition was not signed by five creditors, “ residents of this state,” it was insufficient to confer any jurisdiction upon the court to adjudicate him an insolvent.