Opinion
February Term, 1891.
Damages — False Arrest — Nonresidents — Insolvent Debtors — Constitution — Imprisonment for Debt — Assignment — Discharge — Fraud — Tort — Trustee — The Code — Homestead.
1. In an action for damages for a false arrest, the plaintiff obtained an order for the arrest of the defendants, who were nonresidents. They, being unable to give bail, filed their petition to be allowed the benefits of this statute relating to insolvent debtors: Held, they were entitled to the benefits of such statute.
2. There is, under the Constitution, no imprisonment for debt in this State, except in cases of fraud, and in such cases the defendant in arrest may be discharged, either by giving bail or surrendering his property for the benefit of creditors, as provided by statute.
3. The statute entitled "Insolvent Debtors" protects from future arrest for the same such as have surrendered their property, though after-acquired property may be subject to execution and sale, in proper cases.
4. Every person taken or charged on any order of arrest for default of bail, or on surrender of bail in any action, and every person taken or charged in execution or arrest for any debt or damage rendered in any action whatsoever, is entitled to the benefits of the chapter entitled "Insolvent Debtors."
5. The benefits of the statute extend as well to those arrested for torts as for debt, and the debt growing out of one is no more a debt and no more entitled to extraordinary process for its collection than the other.
6. In order to prevent undue preference in favor of parties whose debts are already ascertained, the proper remedy of the party seeking to establish and secure his damages for tort is to have a trustee appointed, under The Code, secs. 2957, 2977, and 2981, to hold and distribute among creditors when and as soon as all debts are ascertained.
7. The benefits of the statute are not confined to the residents of this State, but nonresidents cannot take the benefits of the homestead and personal property exemptions; nor are they entitled here to any exemptions given by the laws of their own State.
(490) APPEAL from an order made by Whitaker, J., in an action pending in VANCE.
W. H. Cheek, A. C. Zollicoffer, and W. R. Henry for plaintiffs.
T. T. Hicks and Pittman Shaw for defendants.
DAVIS, J., and AVERY, J., dissented.
The plaintiff brought his action against the defendants, who are nonresidents of this State, to recover damages for an alleged injury to his person, done and procured to be done by them. In the course of the action he obtained an order for their arrest, and they were duly arrested, and, failing to give bail, as allowed by law, they are held in the common jail of the county of Vance, in which county the action was brought. The defendants filed their petition, therein alleging the material facts in the Superior Court of said county, in which the action mentioned is pending, praying that they may be allowed the benefit of the statute (The Code, ch. 27) entitled "Insolvent Debtors." The plaintiff opposes the application of the defendants, denies that they are insolvent, and insists that, inasmuch as it appears that they are nonresidents of this State, and the cause of action on account whereof they are arrested and held is a tort, they are not entitled to the benefits of the statute they invoke.
The court gave judgment denying the application of the defendants to be discharged from custody, and they appealed to this Court.
The Constitution (Art. I, sec. 16) provides that "There shall be no imprisonment for debt in this State, except in cases of fraud." The Legislature, observing this provision, has provided by statute (The Code, sec. 291) that in civil actions, founded upon particular causes of action specified, the defendant may, under an order of arrest duly obtained, be arrested and held in custody, unless he shall, as he may do in the way prescribed, give bail "by causing a written (491) undertaking, payable to the plaintiff, to be executed by sufficient surety, to the effect that the defendant shall at all times render himself amenable to the process of the court during the pendency of the action, and to such as may be issued to enforce the judgment therein"; and he may likewise be arrested in execution upon a judgment in the cases specified, as prescribed by the statute (The Code, secs. 442, 447, 448, par. 3); otherwise, parties in civil actions cannot be arrested unless for contempt.
But another statute, entitled "Insolvent Debtors" (The Code, secs. 2942, 2981), provides, generally, that every insolvent debtor may, in the way prescribed, "assign" — surrender — his estate for the benefit of all his creditors, and that his person may thereafter be exempt from arrest or imprisonment on account of any judgment previously rendered or of any debts previously contracted. It would seem that this statute is unnecessary as to honest debtors, because the constitutional provision above recited relieves such debtors from imprisonment. Such surrender of his property by an insolvent debtor for the benefit of his creditors, as to debts and judgments existing before such surrender, would relieve him from possible future annoyance and arrest on account of such debts, although property he might thereafter acquire might be liable to levy and sale to pay the same in proper cases. But the benefits of this chapter are not confined to simply insolvent debtors so designated; such benefits are extended to other classes of persons held in arrest in civil actions. The statute cited (The Code, sec. 2951) prescribes that "the following persons are entitled to the benefits of this chapter:
"1. Every person taken or charged on any order of arrest for default or bail, or on surrender of bail in any action.
"2. Every person taken or charged in execution of arrest for any debt or damages rendered in any action whatever."
It is to be observed that this provision enlarges the general purpose of the statute by extending the same to the classes of persons specified: First, to "every person taken or charged (not yet arrested) on any order of arrest for default of bail"; secondly, to every person (492) whose bail has surrendered him, as allowed by the statute; thirdly, to "every person taken or charged (but not yet taken) in execution of arrest for any debt or damages rendered in any action whatever," as allowed by the statute (The Code, secs. 442, 447, 448, par. 3). The terms — all of them — thus extending the purpose of the statute are as broad and sweeping as they well can be. They do not, in any view of them as to the purpose intended, imply limitation or discrimination. They plainly embrace "every person" taken or charged to be arrested by virtue of "any order of arrest" — not specially for a tort, or for fraud, or other particular cause of action as to which a person may be arrested, but for any cause of action, no matter what may be its nature, if the person is arrested in a case wherein he may lawfully be so. They, in plain, strong terms, embrace any such arrest made or ordered to be made in any action whatever, that is, any action in which a person — a party — may be so arrested. There is a total absence of words or phraseology of limitation or discrimination in the section of the statute just recited, or in the statute, or elsewhere, that confines its benefits to persons so arrested or to be arrested as fraudulent debtors. Nor is there anything in the nature or purpose of the statute that reasonably, much less necessarily, implies such limitation. Its general purpose is to relieve honest insolvent debtors from arrest on account of debts and judgments against them existing at and before the time they make a surrender of their property as prescribed. The purpose of the particular section of the statute under consideration is to relieve a party to an action arrested or presently subject to arrest, or "in execution of arrest for any debt or damage rendered in any action whatever," upon a surrender of his property in the way prescribed. In such case the party arrested and so seeking relief must notify the creditors or plaintiff at whose suit he is arrested, but (493) he may or may not notify other creditors of his application to surrender his property and be discharged from arrest, and only such creditors as may be so notified will be affected by his discharge. The Code, sec. 2955. The principal relief sought in such case by the party arrested is to be discharged from arrest in the action brought by the creditor at whose instance he was arrested. And he is entitled to such discharge upon the honest surrender of his property in the way prescribed, whether the cause of action on account of which he was arrested was a fraudulent debt, or a tort, or of other nature as to which he might be arrested. The statute (The Code, sec. 2952) so expressly provides. It, in broadest terms, embraces "every person taken or charged as in the preceding section (that above described) specified."
It is insisted, however, that the several sections of the statute pertinent to that (section 2951) above recited, mention and refer in terms only to debtors and creditors, and do not in like express terms mention or refer to persons arrested or to be arrested for causes of action other than a fraudulent debt, and, therefore, persons arrested or to be arrested for such other causes of action are not entitled to the benefits of this statute. The terms "debtor and creditor" are employed generally in varying connections throughout the statute to designate the classes of persons to be affected by it, and such terms are not modified so as to make them pertinently and expressly applicable to persons arrested seeking benefit of the statute. It seems that the Legislature, in enlarging and extending the purpose of the statute so as to embrace all persons arrested and to be arrested in civil actions, probably by inadvertence, failed to use the most appropriate terms to effectuate and harmonize the details of its purpose; but such failure, and the use of the not very precise words, debtor and creditor, in matters of detail, cannot be allowed to modify and abridge by mere implication the meaning and application of the plain, (494) strong and comprehensive words and phraseology employed in the section extending the benefit of the statute to all persons so arrested. As we have said, such purpose appears clearly by explicit and the most comprehensive terms; and, moreover, it appears from the nature of the matter. Why should a person guilty of fraud in contracting a debt on which an action is founded, when he shall be arrested on that account, as he may be, have the benefit of the statute under consideration, and another person arrested in an action brought to recover damages for an injury to person or character, or for injuring or for wrongfully taking, detaining or converting property, not have the like benefit? Can any just, or even plausible, reason be suggested for such distinction? Clearly, the Legislature had no intention to exclude any person arrested in a civil action for any of the causes specified in the statute (The Code, sec. 291) from such benefit. None appears from its terms or by reasonable inference or implication.
The term "debtor and creditor," employed generally and without precision in the statute as to persons arrested in civil actions, must be taken as meaning and applying to the plaintiff and defendant in the action in which the defendant shall be so arrested. They imply the plaintiff's claiming and suing for damages for which the defendant is liable to him. Such interpretation is allowable and reasonable, with a view to effectuate the intention of the statute as to persons so arrested.
When and as soon as the plaintiff obtains judgment for damages in such case, he at once becomes a judgment creditor of the defendant, and then he comes within the words of the section of the statute recited above. The second clause thereof expressly embraces "every person taken or charged in execution of arrest for any debt or damages rendered in any action whatever." Thus, persons "in execution of arrest" for fraudulent debts (they could not be arrested for or on account of honest debts) and for "damages rendered in any action whatever," (495) are expressly put on the same footing.
It is further said that the plaintiff in an action for injury to the person, before trial, has no debt and may never obtain judgment; and, it is asked, to what end shall the defendant, arrested in such action, surrender his property as contemplated by the statute and be discharged, and how shall his property so surrendered, or the proceeds of the sale thereof by the trustee, be distributed as between the plaintiff (who has no debt or judgment) and other creditors of the defendant? It is hence insisted that the defendant is not entitled to the benefit of the statute. In such case the statute contemplates that the defendant may surrender his property and be discharged, and thus he may have the benefit of the principal object to be attained. His property so surrendered will pass to a trustee, to be appointed as prescribed by the statute (The Code, secs. 2957, 2977, 2981), to be applied for the benefit of his creditors, including the plaintiff in the action, when he shall obtain judgment. The distribution of the assets of the defendant may, if need be, be stayed until plaintiff's action shall be tried. If he shall obtain judgment, he will share in the distribution of the assets; if he shall not, then the assets will be distributed to the defendant's creditors; and if there be any surplus, the same will be returned to him. The statute so intends.
The difficulty and objection suggested are no greater, or otherwise, substantially, than it would have been if the cause of action sued upon had been a fraudulent debt contracted by the defendant. Indeed, in any case or proceeding involving a distribution of the assets of an insolvent debtor, the distribution might be stayed until a disputed claim could be litigated and determined. Besides, provisions of a statute affecting its details, not altogether practicable, but not essential to its effectiveness, and the absence of like provisions, will not be allowed to defeat (496) or abridge its purpose clearly appearing. It is the duty of the court to give it full effect, if this be at all practicable, and, to that end, to interpret its terms and phraseology in the light of, and with a view to, its purpose.
We think it clear that the provisions of the statute under consideration extend to and embrace every person arrested or to be arrested in a civil action on account of any cause of action specified in the statute (The Code, sec. 291). If the contention of the plaintiff should be allowed to prevail, no person arrested before judgment in the action could have benefit of the statute, unless he should be arrested on account of a fraudulent debt. If the purpose had been to so limit its application, it would have so declared — it certainly would not have employed such explicit and comprehensive terms to express its narrow and exclusive meaning.
Nor are the benefits of the statute confined to residents of this State. There is no provision in it, or any other statute, within our knowledge, that in terms or by reasonable implication declares that a nonresident shall not be discharged from arrest in a civil action if he makes the complete surrender of his estate as prescribed.
The defendants, being nonresidents, are not entitled to homestead and personal property exemptions. Such exemptions are allowed only in favor of persons having residence in this State. Baker v. Legget, 98 N.C. 304; Finley v. Saunders, ib., 462. Nor are they entitled to such exemptions here, under any statute of the State of Georgia, they being citizens of that State. Such statute could not secure to them in this State exemptions of property against the rights of creditors. In some respects, the courts of this State, upon principles of comity, will administer the laws of another State in the distribution of the property of deceased persons who were citizens of the latter State, but they (497) will do so subject to the rights of citizens of this State. Medley v. Dunlap, 90 N.C. 527; Simpson v. Cureton, 97 N.C. 112.
The defendants are entitled to be discharged from arrest when they make surrender of their property as specified in their respective accounts of the same. To the end the same may be received and disposed of according to law, the court should appoint a trustee for that purpose, as prescribed by the statute (The Code, secs. 2957, 2977, 2980).
No harm can come from the construction we have given the statute, because it is always in the power of the plaintiff to suggest fraud and have an issue submitted and defendant held (in default of bail) till it is found that a full disclosure has been made.
There is error. The defendants are entitled to make surrender of their property and be discharged from arrest according to law.
Reversed.