Banco Popular v. Wilcox , 10 P.R. Fed. 276 ( 1918 )

HamiltoN, Judge,

delivered tbe following opinion:

On August 2, 1917, upon tbe petition of tbe plaintiff, an order was made by tbis court that tbe defendant, Wilcox, appear before O. 33. Frazer as special referee to answer under oath in wbat are ordinarily called supplementary proceedings. Tbe basis of tbe order and tbe proceedings is § 269 of tbe Code of Civil Procedure. Tbe facts as' represented to tbe court by motion of tbe defendant, Wilcox, filed August 24, 1-917, to set aside tbe order, and wbicb are confirmed by tbe record are that tbe plaintiff recovered a judgment April 27, 1917, and execution tbereon bas not been returned satisfied, but plaintiff is seeking to enforce bis claim by a bill in equity against the defendant, praying that certain assignment of interest and the judgment in tbis court be set aside. Tbe court has held up tbe proceedings pending argument of tbe motion, and bas now an opportunity to consider tbe whole matter.

Tbe law under which tbe proceeding is bad is found in § 269 óf tbe Code of Civil Procedure, as follows: “When an execution against property of the judgment debtor, or of any of several debtors in tbe same judgment, issued to tbe marshal of tbe district where be resides, or if be do (does) not reside in said district, to the marshal of tbe district where tbe judgment roll is filed, is returned unsatisfied in whole or in part, tbe judgment creditor, at any time after such return is made, is entitled to an order from tbe judge of tbe court, requiring such judgment debtor to appear and answer lipón oath concerning bis property, before suck judge or a referee appointed by bim, at a time and place, specified in tbe order; but no judgment debtor must be required to attend before a judge or referee out of tbe district in wbicb be resides.” ' [Compilation 1911, § 5306.]

For tbe purposes of tbe present motion the proceedings in this court áre to be regarded as at common law except so far as modified by tbe Code of Civil Procedure, itsélf based upon common-law precedents. At common law property was originally liable to execution for debts only to a limited extent; the liability being gradually increased by statute and court practice until practically all property is liable to execution, with tbe exception of certain exemptions allowed by tbe policy of tbe law. Parallel with this process was tbe right of a judgment creditor to go into equity to set aside fraudulent conveyances and tbe like. This also has been modified in some jurisdictions by permitting tbe procedure to be bad by a creditor who has not reduced bis claim to judgment. In some jurisdictions, as in Porto Eico, there is further remedy given called supplementary proceedings. 17 Cyc. 1402. This is a stringent statutory remedy; and, while it is to be construed reasonably, it must be construed with some strictness so as not to run counter to constitutional provisions as to unreasonable searches and other personal rights.

’ Tbe basis of tbe remedy prescribed is indicated by its name. The proceeding is supplementary, not additional. It is not "an incident to an execution, but is to be used when tbe remedy by execution proves inefficacious. It does not seem allowable under tbe words of tbe statute itself to have recourse to this ■remedy until tbe execution, has been returned unsatisfied. Recourse against visible property being exhausted in' the eye of the law by the marshal’s return of there being no such property, the statute allows the examination of the debtor under oath with a view of discovering property which has not been discovered by the marshal. In the case at bar the petition alleged that the execution was “returned by the marshal wholly unsatisfied,” and that an alias execution was similarly returned. This seems to be incorrect. The executions have been levied upon a certain fund in court, and may or may not be productive. The executions cannot in any proper sense of the word be said to have been returned “unsatisfied in whole or in part,” and this is a prerequisite to the use of the extraordinary remedy sought. As in matters of this sort time may be important, the remedy was granted upon sworn petition without stopping to hear from the defendant, but ho should not now be denied the right to have the order vacated upon showing that the prerequisite did not exist.

Tinder Revised Statutes, § 916, Comp. Stat. 1916, § 1540, the remedies given by the local law' apply in the Federal court.

Sec. 916. “The party recovering a judgment in any common-law' cause in any circuit or district court, shall be entitled to similar remedies upon the same, by execution or otherwise, to reach the property of the judgment debtor, as are now provided in like causes by the laws of the state in which such court is held, or by any such laws hereafter enacted which may be adopted by general rules of such circuit or district court; and such courts may, from time to time, by general rules, adopt such state law's as may hereafter be in force in such state in relation to remedies upon judgments, as aforesaid, by execution or otherwise.”

This is not in conflict with § 2 of article 3 of'the Constitution, preserving the distinction' between relief at law and in equity. Ex parte Loyd, 105 U. S. 647, 26 L. ed. 1200. In a Federal court, as in a local court, the Recovery of a judgment, issue of execution, and return of nonsatisfaction are prerequisites. 17 Cyc, 1407, 1409 and 1421.

It would seem, therefore, that until a direct return of no property found the remedy does not lie, and the grant at this time was premature.

It follows that the order should be vacated and the proceedings had under it held for naught.

It is so ordered.