Court Opinion

ID: 7966676
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:51:13.63628+00
Date Added: 2024-06-11T16:34:39.816782
License: Public Domain

Mitchell, J.
This action was brought to have the property anal effects of the defendant corporation sequestrated, and a receiver of th&-same appointed, pursuant to Gen. St; 1878, c. 76, § 9. The materiali allegations of the complaint are that the plaintiff bad obtained im Hennepin county a judgment against the corporation for ■$1,239.68*. which was adjudged a specific lien upon certain real estate in that, county, which the sheriff was directed to sell for the satisfaction of: the judgment; that pursuant to such judgment the sheriff sold the.* premikes, realizing therefrom the sum of $5; that this sale was duly-confirmed by the court, by whom it was further ordered that judgment be entered in favor of the plaintiff and against the defendants for the deficiency, -which was thereafter done, and the judgment. docketed in both Hennepin and Bamsey counties, in which latter-county was the defendant’s principal place of business; that thereafter executions on this judgment were issued and delivered to the - respective sheriffs of these counties, both of which had been by them*, returned wholly unsatisfied. The corporation, in its answer, admits.; all these allegations, but attempts to set up by way of defence: First *402“That the property subject to the lien referred to in the complaint was ■■of a value much more than ample to pay plaintiff’s judgment; that ithe sum of $5, for which it was sold, was grossly inadequate; and that the plaintiff could, if he had seen fit, have sold it for more than enough to satisfy his claim. Second. That the corporatien had and still has sufficient property not exempt from execution to pay plaintiff’s judgment; and “that the plaintiff, if he had seen fit, could have levied the execution upon property of the defendant situated in Hen-nepin county, and which was of record in said county in the name of the corporation, for more than enough to satisfy the judgment and «costs; and that during all of the times stated in the complaint, and mow, the defendant is the owner of real property in Hennepin county, •which is of record in its name, and subject to levy and sale on execution, worth far more than the amount of plaintiff’s judgment.” TJpon the pleadings, the court, on motion of plaintiff, made an order -appointing a receiver as prayed for in the complaint, and from this ■order the corporation appeals.
It would hardly be seriously contended but that the facts alleged in the complaint made at least a prima facie case entitling the plaintiff, under the statute, to have a receiver appointed. All these facts ■having been admitted by the defendant, the plaintiff was therefore entitled, on the pleadings, to the order, unless the answer stated a ■ defence. The first branch of the attempted defence, and which is the one principally discussed in the briefs, is clearly without merit. 'The adequacy of the price received by the sheriff on the sale of the ^property under the judgment or decree of the court cannot be questioned collaterally in this way. If the defendant had any ground of complaint as to the acts of the sheriff in making the sale, it had a remedy by objecting to its confirmation, or by application directly to rthe court on motion to vacate and set aside the sale.
The second branch of the proposed defence (which is very meagrely «discussed by counsel) presents the question whether, upon the facts ¡stated, the return of the execution unsatisfied was conclusive as to the ¡right of the judgment creditor to have a receiver of the corporate prop<erty and effects appointed, or whether, in opposition to the application, the corporation could show that it in fact had and has property subject *403to levy and sale on execution sufficient-to satisfy the plaintiff’s judgment. The current of the decisions is to the effect that, in the absence of express statutory authority, the general jurisdiction of equity over corporations did not extend to sequestrating corporate property, and appointing a receiver of the same, in aid of judgment creditors. This was probably for the reason that the effect of taking the property of a corporation out of the control of its own officers involved the virtual dissolution of the corporate body, and the probable loss of its franchises. The right of judgment creditors of a corporation to the appointment of a receiver of the corporate property and effects in' aid of their judgments, after execution returned unsatisfied, given by Gen. St. 1878, c. 76, § 9, may be regarded as an extension or enlargement of the power of the courts in that respect, so as to apply to corporations as well as natural persons, and to be governed by the same general principles in both cases. The fundamental principle upon which the appointment of receivers in behalf of judgment creditors for the enforcement of their judgments rests, is the inadequacy of the ordinary legal remedy by execution. This is so both under the chancery practice and under the reformed codes of procedure. And in cases like the present, where the object is to reach assets of the debtor which cannot be reached by execution, it is undoubtedly a leading principle that, to entitle a creditor to a receiver, he must have fully exhausted his remedy at law. But, when the aid of the court is invoked in such cases, it looks only to the execution and the return. The former shows that the remedy at law has been pursued, and the return shoits. whether theremedyhas proved effectual ornot; and, from the embatrassment which would result from any other rule, the return must be held conclusive, and the court will not entertain inquiries as to the diligence of the officer in endeavoring to find property upon which to levy. If there is any good ground for setting aside the return of the officer because of its falsity, the defendant in the execution should apply directly to the court on motion. The court before which the proceedings for the appointment of a receiver are pending, could and should, on proper showing, postpone such proceedings, in order to give time to make such a motion; but, so long as the return is suffered to remain of record in force, it is conclusive, *404and cannot be thus collaterally assailed by inquiries into the conduct of the officer imexecuting the writ, or into the existence of any property which he might have taken by virtue of it. To permit the return to be thus collaterally attacked, or its probative effect to be ré-butted in this way, would be not only against all precedent, but also, ás we think, attended with great practical embarrassment. Flint v. Webb, 25 Minn. 263; Jones v. Green, 1 Wall. 330. The proposed answer contained no defence, and therefore the order appealed from was properly made, and must be affirmed.