Holton v. Burton
| Decision Date | 16 December 1890 |
| Citation | 47 N.W. 624,78 Wis. 321 |
| Parties | HOLTON v. BURTON. |
| Court | Wisconsin Supreme Court |
OPINION TEXT STARTS HERE
Appeal from circuit court, Milwaukee county.
Sylvester & Scheiber, for appellant.
Quarles, Spence & Quarles, for respondent.
This was an appeal from an order of the circuit court of Milwaukee county, vacating and setting aside an order of J. F. LYON, court commissioner of Walworth county, appointing a receiver of the property and effects of the respondent in proceedings supplementaary to execution. The application of the respondent to the circuit court to set aside the order made by the court commissioner was founded upon the proceedings had before said commissioner, and upon the affidavit of T. W. Spence, one of the attorneys for the respondent. This affidavit shows, among other things, “that, on or about the 16th day of July, 1889, the said John E. Burton, to obtain his discharge under the insolvent laws of this state, made a voluntary assignment in due form of law, and in accordance with the statutes in such case made and provided, of all his property of every kind and nature not exempt by law from execution, to one Gage E. Tarbell, for the benefit of his creditors.” This affidavit shows that such assignment was made after the supplementary proceedings were commenced, and before the order appointing a receiver in such proceedings was made by the said commissioner. It also appears from the record that this fact was brought to the notice of the court commissioner before he made his order in the case. The counsel for the respondent insist that this assignment, made by the respondent pending the proceedings supplementary to execution, not having been specially enjoined by the court commissioner before whom such proceedings were pending, puts an end to such proceedings supplementary, and when that fact was made to appear, either to the commissioner or the court, it was the duty of the commissioner or the court to suspend all further supplementary proceedings, and the appellant should thereafter seek his rights in the assignment proceedings.
Having come to the conclusion that it was proper for the circuit court to vacate and set aside the order appointing a receiver in such supplementary proceedings, when such assignment by the respondent was shown to have been made in due form of law, we shall not discuss, at any length, the contention of the learned counsel for the respondent, that it appears on the face of the proceedings that the order of the court commissioner was void for want of jurisdiction, or for other cause. We will say, however, that we do not think that the want of a formal entry by the commissioner, that the proceeding was adjourned to a particular day and hour, divested the commissioner of all further power to proceed in the case, upon giving proper notice to the party of the time and place when he would so proceed to act. We do not see how the respondent was prejudiced by such want of an entry of adjournment when he was afterwards duly notified that the commissioner would proceed to act further in the case. We are also of the opinion that the making of an order appointing a receiver in such proceedings is a sufficient adjudication, if such adjudication be necessary, that the defendant has property or effects which he refuses to apply to the payment of his debts. The statute, under which these proceedings are had, expressly provides that, “if it appear that any person alleged to have property of the judgment debtor, or to be indebted to him, claims an interest in the property adverse to him, or denies the debt, such interest or debt shall be recoverable only in an action against such person by the receiver.” In the case at bar, the only property in which the judgment creditor claimed that his debtor had an interest was shown to have been claimed by other persons, and could only be made applicable to the payment of his judgment after, in an action by the receiver, it had been adjudged that such property should be subjected to the payment of his judgment. In such case, it would seem not only unnecessary that the court commissioner should adjudge that such property so claimed by a third party was subject to the payment of the plaintiff's judgment, but it would be improper to do so, as the judgment could not bind such third party, and might prejudice his defense in an action by the receiver.
We, however, place our decision in this case on the ground that it was the plain duty of the circuit court to set aside the order of the commissioner appointing a receiver, when it was made to appear that the debtor had made a lawful voluntary assignment of his property for the benefit of all his creditors. It is the policy of the law to uphold any lawful proceeding by which the assets of an insolvent debtor may be distributed in equal pro rata shares to his creditors, and to enforce such disposition of his property in every case when the particular creditor has not acquired a valid lien upon the property of such insolvent before proceedings for such distribution are instituted. Rule 28, § 4, (of the rules of the circuit courts,) which is a rule regulating creditors' actions, supplemental proceedings, and receivers, prescribes that “no injunction granted in such case or proceeding shall be construed to prevent the debtor from receiving and applying the proceeds of his subsequent earnings to the support of himself or his family, or to defray the expenses of the action, or to prevent him from complying with any order of the court, made in any other cause, to assign and deliver his property and effects to a receiver, or to restrain him from making the necessary assignment to obtain his discharge under the insolvent laws, unless an express provision to that effect is contained in the injunction.” In the case at bar, it is admitted that the injunction order in the supplementaryproceedings before the commissioner did not expressly prohibit an assignment for the benefit of creditors under the laws of this state. The question of importance, therefore, in this case is as to the effect of such assignment, when made, upon such supplementary proceedings. It is insisted by the learned counsel for the appellant that the words in the rule above quoted, “to restrain him from making the necessary assignment under the insolvent laws,” should not be construed to cover a voluntary assignment made under chapter 80, Rev. St., as amended by chapter 385, Laws 1889, because the only insolvent law in force in this state, at the time such rule was published, was chapter 161, Rev. St. 1858, and now chapter 179, Rev. St. 1878, as amended by subsequent acts, and, as it is clear that the assignment made in this case was not made under this last chapter, it was not protected by the rule quoted, and could therefore have no effect upon the supplementary proceedings. It was decided by this court, in the case of ...
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...the receiver had been appointed and levied more than four months before commencement of the bankruptcy. Id. ¶ 35 In Holton v. Burton, 78 Wis. 321, 47 N.W. 624 (1890),9 we reached a consistent result. Holton concerned a judgment creditor who had initiated supplemental proceedings, but had no......
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...statute provided a new right to judgment creditors that did not exist at common law, it is a statutory right.15 Holton v. Burton, 78 Wis. 321, 328, 47 N.W. 624 (1890) ( “[T]he right to institute and carry on supplementary proceedings is a mere statutory right, and may be taken away or modif......
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Adams v. Hartzell
... ... court to speak of our whole system relating to voluntary ... assignments as an insolvent law. Holton v. Burton, ... 78 Wis. 321, 47 N.W. 624; Bank v. Schranck, 97 Wis ... 250, 73 N.W. 31, 39 L. R. A. 569. In Binder v ... McDonald, 106 Wis ... ...
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...new features, which led this court to speak of our whole system relating to voluntary assignments as an insolvent law. Holton v. Burton, 78 Wis. 321, 47 N. W. 624;Bank v. Schranck, 97 Wis. 250, 73 N. W. 31. In Binder v. McDonald, 82 N. W. 156, this court criticised these statements, and lim......
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Turned Upside Down: The Wisconsin Supreme Court Reverses The Rule On Judgment Liens
...of its analysis, the Supreme Court reviewed the three very old cases (Kellogg v. Coller, 47 Wis. 649, 3 N.W. 433 (1879); Holton v. Burton, 78 Wis. 321, 47 N.W. 624 (1890); and Alexander v. Wald, 231 Wis. 550, 286 N.W. 6 In Holton, the court determined that a debtor could assign its property......