Ridge Turnpike Co. v. Peddle

Gibson, C. J.

The statute law relating to executions, as it was enacted on the report of the commissioners, was a harmonious system of provisions distributed to particular subjects under different heads; for each of which everything necessary was thought *492to be supplied in its proper place. The details under the head of executions against corporations distinctly show that the property of an insolvent corporation was not, in any case, to be seized in execution for the separate benefit of a particular creditor; and, consequently, that an attachment execution was not to be sued out against it. By these, a corporation is not to be treated as an insolvent debtor till it has ceased to present tangible property to a creditor’s execution; and this, while it lasts, is subjected to seizure even to the money in its drawers. These provisions give a creditor every advantage, from superior activity, of which the case is susceptible, •except execution of the corporation’s choses in action; and why should we resort for that to the provision for execution against natural persons, which is a distinct subject? 'When a corporation has become ostensibly unable to pay its debts, by presenting no visible property to an execution, it was not intended, before the act of 1845, that any of its creditors should gain a preference for himself; but that, on the return of an unsatisfied execution, the plaintiff should proceed no further than to sue out a writ of sequestration, and have the corporate revenue applied, in the first place, to the maintenance and repair of the works of a public nature; and, in the second, to pro rata payment of all the debts. The first object was to prevent the public interest from being trampled under foot in a scuffle between creditors; and the second was to produce equality of distribution, as in any other case of insolvency. In fact, the sequestration is no more nor less than a process of insolvency, and the sequestrator is expressly clothed with the attributes of an assignee under the insolvent laws. Now it is not pretended that an advantage could be gained by means of an attachment execution against an insolvent corporation; but if such an execution could be sued out against a corporation at all, in -what shape could the question of its insolvency be raised or determined ? The . garnishee would have no concern with it-; and though the corporation also would have its day in court at the return of the writ, it might not deem it prudent or convenient to set up such a defence, even though it might have the means of exhibiting the state of its affairs. The general creditors would be the actual parties in interest, and without something very like judi-. cial legislation, they would not be heard. • But there is no difficulty on that head, in proceeding according to the specific provisions for execution against corporations. They declare the test of insolvency to be simply a return of nulla bona; on the basis of which, thé process of pro rata distribution is constructed. In a proceeding by an attachment execution against a natural person, there is no such test, *493because, as there is no principle of public or private protection involved in it, the creditor is allowed to seize on whatever he can grasp, whether his debtor be solvent or not. But if the act of 1836 had allowed him to do what he can certainly do under the act of 1845, he might have taken an attachment execution in defiance of its principle of pro rata distribution whenever the corporation should be unwilling or unable to prove its own insolvency. The argument-might be rested here; but the interpretation which the legislature has since put on its own act before any judicial interpretation had been put on it, frees the question from every difficulty. There was no motive for interference but to alter the law; and there would have been no alteration had the law stood then as it stands now.

The judgment on the attachment, therefore, is reversed, and the attachment execution is quashed.