Court Opinion

ID: 6599222
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:06:14.427987+00
Date Added: 2024-06-11T15:57:57.501868
License: Public Domain

By the Court,

DixoN, 0. J.
The order is appealable. An order which discharges a person having property of the judgment debtor, or who is indebted to him, from process for contempt for refusing to answer questions properly put upon examination in supplementary proceedings, necessarily arrests such proceedings, and is a final order affecting a substantial right, within subdivision 2 of section 10 of the act regulating appeals. Laws of 1860, ch. 264. Such an order is appeala-ble under the laws of New York, as an order “ affecting a substantial right.” Livingston v. Swift, 23 How. Pr. R., 1.
The proceedings in which this appeal originates were instituted under sec. 91 of chapter 134, Revised Statutes-. That section and the preceding sec. 88 are identical with secs. 294 and 292 of the code of New York. It has there been held, and as we think for very satisfactory reasons, that the provisions *493of sec. 292 (sec. 88 of our statute) are not applicable to judgments against corporations. Hinds v. R. R. Co., 10 How. Pr. R., 487; Curtois v. Harrison, 12 id., 359; S. C., 3 Abb. Pr. R., 96; 1 Hilt., 109. But as to tbe applicability of sec. 294 (our see. 91) to such judgments, there is some contrariety of opinion. In Hinds v. Railroad Co., and Sherwood v. Railroad Co., 12 How. Pr. R., 136, it was held inapplicable. On the other hand the question has been thoroughly examined, and its applicability to such judgments maintained, in several cases. Curtois v. Harrison, supra; Lowber v. The Mayor &c. of New York, 5 Abb., 268; The Same v. The Same, 7 Abb., 248; McBride v. Farmers' Branch Bank, 28 Barb., 476; S. C., 7 Abb., 347. The grounds upon which these decisions proceed accord, with our own views of the statute, and we adopt them as a correct exposition of it. The remedy afforded by sec. 91 is cheap, easy and expeditious, and we see nothing to prevent its application against a corporation debtor.
The objection that Harris, being president'of the bank defendant, and holding whatever funds he had, the property of the bank, as its president, is not liable to this examination — that it is, in effect, not a proceeding against him, but against the bank — is fully met by some of the cases above cited. Lowber v. The Mayor &c., 5 and 7 Abb., and Curtois v. Harrison. There can be no doubt that the property of a private corporation is liable for its debts, and that, whether such property is found in-the hands of its president or any other person. The possession is immaterial so far as the liability is concerned; for neither the president nor any other officer of the corporation has any right to withhold its property when required to answer the just debts of the corporation. It would be easy indeed for such corporations to avoid the payment of their debts, if placing their property in the hands of their officers was placing it beyond the reach of creditors. For the purpose of this proceeding, Mr. Harris is regarded as an individual having in his hands property of the bank liable in law for the satisfaction of *494its debts; and the fact that be happens at the same time to be its president, constitutes no excuse whatever for his refusal to surrender such property or to answer questions properly propounded to him concerning it.
Another objection to the proceeding, and which is intimately connected with the first, is that sec. 91 is inconsistent with the provisions of chapter 148, Revised Statutes, secs. 21 to 32 inclusive, and is therefore repealed by them; that the remedies given by the latter sections are exclusive. There is no necessary conflict between the two statutes. Both are susceptible of a harmonious application. The creditor, having obtained his judgment and issued execution against the corporation, is not obliged to resort to the dilatory and more expensive measures authorized by chapter 148. He may have recourse to the cheaper and more expeditious remedy given by sec. 91, which may be regarded as cumulative, and operative until it has been superseded by proper steps taken under chapter 148. The remedies prescribed by chapter 148 are not given solely to creditors. Any stockholder may make complaint; and in case the creditor upon whose complaint proceedings have been institu-tuted, shall settle, the attorney general, under the direction of the governor, or any creditor, is entitled to appear and prosecute. Sec. 22. If, therefore, any other creditor, or any stockholder, feels himself agrieved by the proceedings of one or more creditors under sec. 91, such other creditor or stockholder has but to file his complaint, procure the inj unction prescribed by sec. 21, and proceed to a final settlement of the affairs of the corporation-under chapter 148.
It follows that the order appealed from must be reversed, and the cause remanded for further proceedings according to law.