Ryan's Furniture Exchange, Inc. v. Mcnair

• Decision Date: 19 June 1935
• Citation: 120 Fla. 109,162 So. 483
• Parties: RYAN'S FURNITURE EXCHANGE, Inc. v. McNAIR et al.
• Court: Florida Supreme Court

162 So. 483

120 Fla. 109

RYAN'S FURNITURE EXCHANGE, Inc. v. McNAIR et al.

Florida Supreme Court

June 19, 1935

En Banc.

Certiorari to Circuit Court, Putnam County; George William Jackson Judge.

Certiorari proceeding by Ryan's Furniture Exchange, Inc., against M G. McNair, as receiver of the Putnam National Bank of Palatka, and the Clerk of the Circuit Court for Putnam County, to review an order of the Circuit Court rendered in a proceeding supplementary to execution.

Order quashed, and record remanded to the Circuit Court.

COUNSEL

J. V. Walton, of Palatka, for petitioner.

Julian C. Calhoun, of Palatka, W. A. MacWilliams and Frank D Upchurch, both of St. Augustine, and R. W. Ervin, of Jacksonville, for respondents.

OPINION

DAVIS Justice.

We have before us for consideration on its merits a controversy determinable on certiorari issued by this court pursuant to article 5, section 5, of the Constitution of Florida. The facts shown by the record before us are substantially as follows: On September 19, 1934, M. G. McNair, as receiver of the Putnam National Bank, filed his affidavit for proceeding supplementary to execution, stating therein that on March 13, 1934, he, as receiver, recovered judgment for $20,786.53, plus costs, against Ryan Bros., Inc.; that on July 13, 1934, execution issued on said judgment, but was, on August 15, 1934, returned unsatisfied.

On September 19, 1934, the circuit judge entered the following order:

'That the defendant in execution, Ryan Bros., Inc., a corporation, be, and it is hereby required to be and appear before P. B. Revels, Esq., a practicing attorney at the bar of this Court, who is hereby designated Commissioner by the Court, on the 5th day of October, A. D. 1934, at ten o'clock A. M. in the Circuit Court Room in the Court House, at Palatka, Putnam County, Florida, then and there to be examined concerning its property, as provided by law.'

On October 5, 1934, and subsequent dates thereafter, after notice given, witnesses were called in behalf of M. G. McNair, as receiver, and in addition documentary evidence was introduced. No evidence was introduced on behalf of Ryan Bros., Inc. Taking of testimony ended February 8, 1935.

On February 19, 1935, the commissioner filed his report showing that seven different hearings were had in taking the testimony. After setting forth the evidence taken, the report then gave the findings of the commissioner on both the facts and the law involved.

On March 15, 1935, the circuit judge made his order confirming in all respects the findings of the commissioner, in the following language:

'That Ryan's Furniture Exchange, Inc., a corporation, is a mere continuation of the business and affairs of the defendant, Ryan Brothers, Inc., a corporation, and that all the stock in trade, fixtures and equipment now held in the name of Ryan's Furniture Exchange, Inc., is the property of the defendant, Ryan Brothers, Inc., and that the transfers or assignment of the personal property as disclosed in and by the Commissioner's report and findings between the defendant, Ryan Brothers, Inc., and Ryan's Furniture Exchange, Inc., were made without consideration and were made or executed, contrived or devised by the defendant, Ryan Brothers, Inc., of fraud, covin, collusion or guile to the end, purpose and intent to delay, hinder or defraud its creditors, including the plaintiff, and said transfers or assignment of said stock in trade, furniture and equipment from said defendant, Ryan Brothers, Inc., to said Ryan's Furniture Exchange, Inc., be and the same are hereby decreed to be utterly void, frustrate and of non-effect, and the Clerk of this Court, be, and he is hereby directed to deliver to the Sheriff of this Court a certified copy of this order together with the execution which issued herein on the 13th day of July, A. D. 1934, and which was returned by the Sheriff of this Court 'nulla bona' on the 15th day of August, A. D. 1934, and the Sheriff of this Court, be and he is hereby directed to take all of the personal property acquired by H. C. Richard at Sheriff's sale held on the 3d day of September, A. D. 1934, and subsequently sold to Ryan's Furniture Exchange, Inc., and all of the stock in trade, fixtures and equipment, now held in the name of Ryan's Furniture Exchange, Inc., for the satisfaction of the execution issued herein on the 13th day of July, A. D. 1934.

'The Court finds that $93.65 is a reasonable amount to allow P. B. Revels, Commissioner, as his costs and fees for his services as Commissioner herein, and hereby allows same, and it is further

'Ordered and adjudged, That the defendant, Ryan Brothers, Inc., a corporation, be, and it is hereby required to pay all costs of the proceedings herein supplementary to execution, which costs are hereby taxed at the sum of $-----, together with the sum herein allowed as Commissioner's costs and fees.'

On March 16, 1935, the sheriff of Putnam county took possession of the stock in trade, fixtures, and equipment of Ryan's Furniture Exchange, Inc., locking up the store, records, and other property, taking the keys thereto, and barring therefrom all officers, directors, employees, and servants of Ryan's Furniture Exchange, Inc.

On March 29, 1935, Ryan's Furniture Exchange, Inc., filed its petition for writ of certiorari in the Supreme Court. The petition averred substantially that the circuit court exceeded its jurisdiction in declaring the judgment of Richard v. Ryan Brothers, Inc., void, because said judgment was not rendered at same term as supplemental proceedings were had, and Richard was not made a party to supplemental proceedings; that the circuit court exceeded its jurisdiction in adjudging Ryan's Furniture Exchange, Inc., a continuation of Ryan Bros., Inc., when petitioner was not made a party to supplemental proceedings; that circuit court was without jurisdiction to order the sheriff to seize the property of Richard and the petitioner; that the commissioner was without authority to hold any hearings after the first one because that is the extent to which authority was granted him under the order appointing him commissioner; that the commissioner was without authority to report any findings on either the law or the facts, because no such authority was given him in the order appointing him commissioner; that seizure of property of petitioner without its day in court has irreparably damaged petitioner.

The Supreme Court thereupon issued rule to show cause why said writ should not be granted, returnable April 3, 1935. On that date, the court, after hearing oral arguments, issued a writ of certiorari, directed to the clerk of the circuit court for Putnam county and to M. G. McNair, as receiver.

On April 20, 1935, this court entered its further and supplemental order that the writ of certiorari granted on April 3, 1935, operate as a supersedeas to the final order of the circuit court of March 15, 1935, until further order of this court.

On April 25, 1935, M. B. McNair, as receiver, filed his motion to quash the writ of certiorari. The motion stated substantially: (1) That statutory proceedings supplemental to execution permitted circuit court to order sheriff to take personal property of person not made party to such proceedings; (2) that those feeling aggrieved may file claim and bond under section 4545, C. G. L.; (3) that it appears from the record that the circuit court did not exceed its jurisdiction under the statutory proceedings supplementary to execution; (4) that record shows and circuit court found petitioner a mere continuation of judgment debtor, acquiring latter's assets without consideration and intending to defraud respondent; (5) same ground as second, except it refers to sections 4515 and 4516, C. G. L.; (6) that record shows circuit court has followed statutory procedure and petitioner has other remedies, thus making certiorari inapplicable as a remedy; (7) that petitioner seeks to have this court go outside record to consider matters not properly before the court, and to consider hypothetical questions.

The statutory proceeding supplemental to execution is embodied in sections 4540-4549, C. G. L. These statutes were designed to assist judgment creditors to discover any assets of the defendant that could be appropriated to satisfy the judgment, thereby furnishing additional means of satisfying executions after they have been returned unsatisfied. South Florida Trust Co. v. Miami Coliseum Corporation, 101 Fla. 1351, 133 So. 334. And this procedure is generally a substitute for creditor's bill. Sebring Co. v. O'Rouke, 101 Fla. 885, 134 So. 556; Florida Guaranteed Securities v. McAllister (D. C.) 47 F. (2d) 762.

The constitutionality of these statutes was questioned in two cases, and in both were ruled to be constitutional. In Reese v. Baker, 98 Fla. 52, 123 So. 3, it was held the provision authorizing imprisonment of debtor for contempt for failure to disclose location of property outside of state is constitutional; such imprisonment not being for the debt but for the contempt. In South Florida Trust Co. v. Miami Coliseum Corporation, 101 Fla. 1351, 133 So. 334, it was held not denial of due process to have debtor appear in proceeding by order of court as he had already been served with process upon the institution of the action. It was also held the title of the act was sufficient to cover the appointment of the commissioner. It was also held that the examination of a judgment debtor involved no equitable rights violative of section 11, article 5, of the Florida Constitution.

Under the statutory procedure supplemental to execution the court is under duty to summons all adverse claimants to real estate, and must provide such procedure as will give all...