Dean v. Grimes

McKinstry, J. The action was brought on a promissory note, the defense being a discharge under the [445]Insolvency Act of 1852. It is urged by plaintiff (respondent) that the County Court never acquired jurisdiction of the estate of the defendant, alleged insolvent, because there was no sufficient publication of a notice for the appearance of his creditors. By an amendment of the Insolvent Act of 1852, the county judge, on the filing of the insolvent’s petition, was required to order the clerk to issue notice calling the creditors to appear on a specified day, not less than thirty days from the first publication of the notice. (Stats. 1863, p. 750.) In Grimes v. His Creditors, the first publication was on December 7, 1878; the return day was January 6, 1879. The order of the judge and the publication thereunder were sufficient to bind the creditors of the insolvent. (Wilson v. His Creditors, 55 Cal. 476.)

The court below, as portion of its charge, read to the jury sections 2, 3, 4, 7, 27, 28, 29, and 32 of the Insolvent Law of 1852, and section 8 of the act of March 31, 1876 (Stats. 1875-76, p. 582); and then instructed the jury:—

“ If you believe from the evidence that the defendant, I. C. Grimes, violated any of this law, or failed in any manner to fully comply with all provisions and requirements of said law, your verdict must be for the plaintiff.

“ These insolvency proceedings are novel and extraordinary,, created by statute in derogation of the common law, and should be strictly enforced. The proceedings in insolvency are special, and no intendments can be made in favor of the jurisdiction. Everything bearing upon that question must appear affirmatively.” The defendant duly excepted.

The instructions were erroneous and misleading. They did not alone submit to the jury the issue whether the defendant had committed any of the frauds, or been guilty of the misconduct mentioned in section 32 of the act of 1852, and in section 8 of the act of 1876. But they also left to the jury to decide, and apparently informed them that their verdict should turn on the decision. [446]whether the defendant had literally complied with the requirements of sections 2, 3, and 4 of the act of 1852, which treat of the form and contents of the insolvent’s petition, his schedule, and his oath. But the petition, schedule, and affidavit were introduced as evidence in the present action, and were proved by record. Whether they were defective “ in any manner ” was a question of law for the court, and ought not to have been submitted to the jury. If such was not the intention of the instructions, but one other meaning can reasonably be given them. They must have been intended to inform the jury it was their duty to inquire whether the petition or schedule or oath contained any statement which was false, and, if they found such false statement, to render a verdict for the plaintiff. But if that interpretation can be given the instructions, they were clearly erroneous, since they eliminated from the conditions which would justify a verdict for plaintiff the element of fraud. (Tevis v. Hicks, 41 Cal. 128; Dean v. Baker, 64 Cal. 232.) Thus, for instance, the jury were told that the insolvency proceedings were “ novel 'and extraordinary,” in derogation of common law, and “special”; and if the defendant had failed in any manner to comply with section 4, their verdict must be for the plaintiff.