Clarke v. Neb. Nat. Bank

• Decision Date: 05 January 1899
• Citation: 77 N.W. 805,57 Neb. 314
• Parties: CLARKE v. NEBRASKA NAT. BANK.
• Court: Nebraska Supreme Court

57 Neb. 314

77 N.W. 805

CLARKE

v.NEBRASKA NAT. BANK.

Supreme Court of Nebraska.

Jan. 5, 1899.

Syllabus by the Court.

1. An order for the examination of a judgment debtor and his debtors in aid of execution, in pursuance of sections 534 and 538 of the Code of Civil Procedure, will be vacated when procured solely on an affidavit wherein the averments are upon information and belief, especially when the sources of the information and the grounds of the affiant's belief are not disclosed.

2. The facts in an affidavit for such an order should be set forth by positive averments, and not upon information and belief.

On the merits. Reversed.

For former opinion, see 69 N. W. 104.

NORVAL, J.

An opinion was filed herein at the September term, 1896, denying a motion to dismiss made on the ground that the order sought to be reviewed was not a final order within the meaning of section 581 of the Code of Civil Procedure. Clarke v. Bank, 49 Neb. 800, 69 N. W. 104. This submission is upon the merits. The Nebraska National Bank on April 10, 1896, obtained a judgment in the district court of Douglas county against Henry T. Clarke and William E. Clarke for $12,843.75, besides costs. On April 11, 1896, an execution was issued thereon, which was returned by the sheriff wholly unsatisfied. During the same month and year an alias execution was issued on said judgment, and, while the same remained in the hands of the sheriff wholly unsatisfied, there was filed with the clerk of the court below the affidavit of Lewis S. Reed, the cashier of said bank, to institute proceeding in aid of execution. This affidavit was entitled in the cause in which the judgment was entered, and, after setting forth the facts already narrated, continues thus: “Affiant further says that said defendants have not personal or real property subject to levy on execution sufficient to satisfy the said judgment. Affiant further says that the said defendants are residents of Douglas county, Nebraska, and that said defendant Henry T. Clarke has property, as affiant believes, and has reason to believe, which he unjustly refuses to apply upon said judgment. Affiant further says that he believes, and has reason to believe, that the First National Bank of Omaha, * * * John T. Clarke, and A. M. Clarke, and each of them, have property of the judgment debtor, Henry T. Clarke, and are indebted to said judgment debtor, Henry T. Clarke; and further affiant sayeth not.” The district court on the same day made an order requiring Henry T. Clarke and the persons and corporations named in the affidavit to appear at a time and place designated, and make answer under oath to all such questions as should be propounded to them relative to the property of said Henry T. Clarke. The latter moved to vacate the said order for examination on the ground that the affidavit therefor was insufficient to justify the said order, which motion was denied, and this ruling is now before us for review.

The affidavit of Lewis S. Reed is assailed upon three grounds, only one of which will be noticed, namely, that the averments therein having been made upon information and belief without disclosing the sources of the affiant's information or the grounds for his belief, renders the affidavit fatally defective. The proceeding below was instituted under sections 532-549 of the Code of Civil Procedure. Sections 533, 534, and 538 of said Code read as follows:

“Sec. 533. When an execution against the property of a judgment debtor, or one of the several debtors in the same judgment, is issued to the sheriff of a county where he resides, or if he does not reside in the state, to the sheriff of the county where the judgment was rendered, or a transcript of a justice's judgment has been filed, is returned unsatisfied in whole or in part the judgment creditor is entitled to an order from a probate judge or a judge of the district court of the county to which the execution was issued, requiring such debtor to appear and answer concerning his property, before such judge, or referee appointed by such judge, at a time and place specified in such order, within the county to which the execution was issued.

Sec. 534. After the issuing of an execution against property, and upon proof by affidavit of the judgment creditor or otherwise, to the satisfaction of the district court, or a judge thereof, or a probate judge of the county in which the order may be served, that the judgment debtor has property which he unjustly refuses to apply towards the satisfaction of the judgment such court or judge may, by order, require the judgment debtor to appear at a time and place in said county to answer concerning the same. And such proceedings may thereupon be had for the application of the property of the judgment debtor towards the satisfaction of the judgment as are prescribed in this chapter.”

“Sec. 538. After the issuing or return of an execution against property of the judgment debtor, or of any one of several debtors in the same judgment, and upon proof by affidavit or otherwise, to the satisfaction of the judge, that any person or corporation has property of such judgment debtor, or is indebted to him, the judge may, by an order, require such person or corporation or any officer or member thereof, to appear, at a specified time and place, within the county in which such person or corporation may be served with the order to answer; and answer concerning the same. The judge may also, in his discretion, require notice of such proceeding to be given to any party in the action in such manner as may seem to him proper.”

These sections were adopted by the territorial legislature of 1858, and have remained upon the statute book until the present time, although in the various published statutes section 534 has not always been printed the same. In the Revised Statutes of 1866 and the several editions of the Compiled Statutes said section is printed to read, “Such court or judge may by order require the judgment creditor to appear,” etc., while in the Session Laws of 1858 (page 188, § 474), the year said section was enacted as a law, and also in the General Statutes of 1873, the section is published precisely as quoted above. The original enrolled bill on file in the office of the secretary of state we have not examined. Manifestly, the legislature intended to provide for the examination of the judgment debtor, and not his creditor; and for the purpose of the present investigation we shall also construe the section.

It is insisted by counsel for the bank that no affidavit was necessary to obtain an order for the examination of Henry T. Clarke, since one execution which had been issued on the judgment had been returned unsatisfied. This argument is based upon the wording of section 533, which provides for the examination of a judgment debtor when an execution against his property has been returned unsatisfied in whole or in part, and contains no expression, as is found in sections 534 and 538, that an order for examination may be issued after satisfactory proof “by affidavit of the judgment creditor or otherwise” or “by affidavit [of the party], or otherwise.” In our view, it is unnecessary to determine in this cause whether the order requiring the debtor to appear and make disclosure must be based upon competent proof in the form of an affidavit or other testimony, because it is very evident that this proceeding was not instituted under said section, but under sections 534 and 538 of said Code. The last section, it will be observed, relates to the examination of the judgment debtor's debtor, and section 534 makes provision for the examination of the judgment debtor when execution has been issued, and no return thereof has been made. Section 533 authorizes the making of the order only after the return of the execution in whole or part unsatisfied, and section 534 allows the order to be issued where no return of the execution has been made. Had the bank desired to proceed under the former section, no alias execution should have been taken out, but, having caused it to issue, it must comply with the provisions contained in section 534, which in clear and unmistakable terms require that the order for examination must be made upon proof, by affidavit or otherwise to the satisfaction of the court or judge, that the judgment debtor has property which he unjustly refuses to apply on the judgment.

The order for examination refers to the affidavit of Lewis S. Reed, and makes the same a part thereof by such reference; and, it not being disclosed from the face of such order, or evidence aliunde, that it was predicated...