Knight v. Frost

• Decision Date: 20 November 1883
• Citation: 14 Mo.App. 331
• Parties: AUGUSTUS KNIGHT v. D. M. FROST, Respondent, AND JESSE HOLLIDAY, Appellant.
• Court: Missouri Court of Appeals

14 Mo.App. 331

AUGUSTUS KNIGHT

v.D. M. FROST, Respondent, AND JESSE HOLLIDAY, Appellant.

St. Louis Court of Appeals, Missouri.

Nov. 20, 1883.

APPEAL from the St. Louis Circuit Court, THAYER, J.

Reversed and remanded.

G. A. CASTLEMAN, for the appellant: All that is required of the creditor is to issue execution and to show that the corporation had no property.-- Turner v. Adams, 46 Mo. 95; Kent v. Curtis, 4 Mo. App. 121, 128, 130; Thompson on Liab. Stock., sect. 320; Marks v. Hardy, 12 Mo. App. 595.

JOHN M. DICKSON and H. I. D'ARCY for the respondent: The decree is correct, as the statute obviously requires not only an execution, but the sheriff's action thereunder, without which action it would be “the shadow of a shade.”-- Nixon v. Green, 11 Exch. 549; Skrainka v. Allen, 76 Mo. 384; Shermerhorn v. Conner, 41 Mich. 374; Jessups v. Carnegie, 80 N. Y. 643-653. The second motion of defendant Holliday, and his action thereon, estopped him to retreat to the first motion, it having been solemnly abandoned.-- Ramage v. Clements, 4 Bush (Ky.), 161; Turner v. Davis, 48 Conn. 397.

BAKEWELL, J., delivered the opinion of the court.

The statute provides (Rev. Stats., sect. 736) that: “If execution shall have been issued against any corporation, and there can not be found any property or effects whereon to levy the same, then such execution may be issued against any of the stockholders, to the extent of the amount of the unpaid balance of such stock by him or her owned; provided, always, that no execution shall issue against any stockholder, except upon an order of the court in which the action shall have been brought or instituted, made upon motion in open court, after sufficient notice in writing to the person sought to be charged.”

Defendants Frost and Holliday are judgment creditors of the Butchers and Drovers' Bank; they both moved for execution against Knight, a stockholder of that bank. Knight paid into court the amount unpaid on his shares, and, on his petition, the court required the two judgment creditors to interplead for this sum. On hearing, there was a decree in favor of Frost.

The facts are admitted, and, so far as material, they are as follows:--

The interpleader, Holliday, caused execution to be issued on March 8, 1881, returnable to the April term, and the execution was returned on the next day nulla bona, by order of plaintiff's attorney. Holliday gave notice to the stockholder on March 16th. Frost caused his execution to be issued on May 16, 1881, returnable to the June term. This execution was regularly returned nulla bona, on the first day of the June term; and Frost gave notice to the stockholder on June 6th, immediately after the return of his execution.

On the hearing, Holliday introduced in evidence a series of executions against the bank, to the April, June, October, and December terms, 1881, of the circuit court, all returned nulla bona. The trial judge found as a fact that the bank was shown to have no property subject to execution, at the time Holliday's execution was returned.

The statute does not, in terms, require a return of nulla bona upon the execution. Undoubtedly, the return of the sheriff will usually be the best evidence that the corporation has no goods. But it is not the only evidence. We held in Marks v. Hardy (12 Mo. App. 595), that, where execution had issued against the stockholder, though there was no positive return of nulla bona upon the execution, if the fact appears that there were no goods, there is sufficient basis for the motion.

We see no reason to depart from what was said in that case, that, “if the plaintiff, by any competent evidence satisfy the court of this condition, the law will be fulfilled.” Execution must undoubtedly issue, because the statute expressly prescribes this; but the law does not say, “if the execution be returned nulla bona,” but, “if there can not be found any property whereon to levy.” Appellant brought himself clearly within the letter of the law; and, as we think, also, within its spirit. If, before the return day, the sheriff becomes satisfied, after due search and inquiry, that he can discover no property, and returns his writ at once, and before the regular day, it is held in many States, that such a return will support supplemental proceedings, under statutes requiring a return. Freem. Ex., sect. 399. A fraudulent and collusive return, made at the instigation of plaintiff, would, of course, be set aside on proper application. But, when the return is shown to be in strict accordance with the fact, no reason appears why it should not be equally good, whether made by the sheriff proprio motu or at the direction of plaintiff. In Skrainka v. Allen (76 Mo. 389), the supreme court adopts the language of Baron Alderson as to this statute (which we adopted from England), that the fact that there are no goods “is ascertained the moment the sheriff has returned nulla bona.” But, neither the English nor the American court says, that the fact can only be ascertained by the return of the sheriff made of his own motion. There is no question, as is suggested by counsel for respondent, of any equitable dispensation from any positive requirement of the law. Equity is not in any way called upon to aid the execution of a statutory power; because, though the statute does say that the execution must issue, and that there must be no property of the corporation out of which it may be satisfied, it does not say that the fact that there are nulla bona of the corporation can be legally ascertained for the purpose of authorizing a recourse upon the stockholder, only by a return to that effect of the sheriff, made of his own motion, in the regular course of his duty.

The case, though not the same, derives illustration from those cases which are decided under statutes giving to a judgment creditor the right to proceed by scire facias against the sureties of the debtor, or to apply for equitable relief against the debtor. A debtor ought not to be harrassed by a suit in chancery where he has property that may be reached at law during the life of the execution; and when the plaintiff comes into chancery for relief, he must first have exhausted his legal remedy. Statutes giving this equitable relief, usually provide for a return of nulla bona upon the execution before the equitable relief can be had. But, even under these statutes, it is not uniformly held that the return must be made upon the return day of the execution. Nor is it held that a return before the day is an absolute nullity.

In New York, under the statutory provision that whenever an execution, issued upon a judgment at law, shall have been returned unsatisfied, in whole or in part, the plaintiff may file a bill of discovery, it was formerly held that the remedy could not be held exhausted so as to allow of the filing of a creditor's bill before the expiration of sixty days when the statute provided that the fieri facias was “returnable sixty days from the receipt thereof by the sheriff,” although the execution had been actually returned before the return day; and this was followed, as the undoubtedly true rule, in Michigan, Maine, and Massachusetts. Cassiday v. Meachum, 3 Paige Ch. 311; Steward v. Stevens, 1 Harr. Ch. 169; Adams v. Commiskey, 4 Cush. 420; Roberts v. Knight, 48 Me. 171. But, afterwards, when, by the New York code, the execution was made returnable “within sixty days after its receipt by the officer,” it was held that the sheriff may return the execution at any time within sixty days, and that when actually returned by him, it is a consummated official act, and any other proceedings may be based thereon.-- Forbes v. Walker, 25 N. Y. 430; Tyler v. Willis, 33 N. Y. 327. This interpretation of the language of the New York statute is contrary to that given to the same language in Massachusetts, where it is held ( Adams v. Commiskey, supra), that the words, “within sixty days,” as a direction to return an execution, mean, “at the end of sixty days.” The supreme court of New York says, in Tyler v. Willis ( supra): “Where there is no collusion or fraud shown, and no intent proved, on the part of plaintiff or his attorney, to prevent a levy on the property of the debtor, there is no law that requires the sheriff to keep an execution sixty days. He may do so; and if he can find property, he ought to make the amount out of the property, even if he requires sixty days for that purpose; but, where the sheriff knows the debtor to have nothing, where he has, on previous executions, exhausted all the property of the debtor, and where he has returned such executions unsatisfied, it would be idle to require him to retain such process in his hands for two months, for no other purpose than to prevent the plaintiff from resorting to other means of collecting this claim.” In Forbes v. Walker ( supra), the court of appeals says: “The request of plaintiff's attorney to the sheriff to return the execution sooner than sixty days, does not affect the question. It is his duty to enforce and collect the execution, to levy on the property of the judgment debtor, if he has any within his bailiwick. If he notoriously has no property liable to levy and sale on execution, the sheriff, as we have seen, may properly, at his risk, return the execution immediately upon its receipt. The request of the plaintiff or his attorney, can not affect or alter his duty, or change the force or validity of his official return. This is made upon his official responsibility, and must be so made, in all cases.”

The learned author of a well known treatise on Executions (Freem. Ex., sect. 353) uses this language: “In New York, the rule has been established by frequent adjudications, that the officer need not keep his writ until the return day. If he feels confident that the defendant has no property subject to execution, and is willing to assume the onus of establishing this fact, he may, before the return day, return the writ unsatisfied. ...