16. purpose of the law is to prevent people from being reduced to poverty. In such a condition they would be a charge to the corn- • munity. Hence laws have been passed which exempt certain property from seizure to satisfy debts. Usu ally such exemption applies to a small homestead, necessary clothing and home utensils, certain domestic animals and a low 17. Supplementary a judg ment is returned wholly or partly unsatisfied, the cred itor has the right to discover concealed property.
Generally it is useless for him to begin these proceed ings unless he has some grounds for believing that property has been sequestered. But if this has been done, a clever examiner can usually prove the fraud ulent concealment and can ferret out the property by means of a vigorous examination.
18. Setting aside fraudulent conveyances.—It may happen that the debtor has actually parted with title to his property, altho the transfer was made without adequate consideration and was effected for the pur pose of preventing creditors from collecting their debts. The facts in such a situation are frequently brought out in supplementary proceedings, and are then made the basis for a so-called judgment creditor's action, the purpose of which is to set aside the illegal transfer. If this is accomplished, the goods can be taken in satisfaction of the judgment and of the costs of the various legal proceedings.
The burden of proving fraud is on the creditor, and difficulties that tend to prevent proof always present themselves. The vigilant creditor will anticipate these difficulties by a little detective work in season, and the credit man who "has a nose" for fraud and who can present to his lawyer concrete evidences of underhand work on the part of the debtor, is a valu able factor in the recovery.
19. Bulk Sales Law.—In cases of litigation the burden ordinarily rests on the creditor to prove that the debtor is guilty of making a fraudulent transfer, but according to modern statutes conditions are re versed if the debtor transfers his goods in bulk—i.e., not in the ordinary course of tiade.
20. there is question about the ownership of property, and there is danger that some person who may have a rightful claim upon it will suffer if the present owner continues in possession, a court will appoint a receiver to take charge of the property till all claims can be determined judicially. Suppose, for example, that the debtor has title to an apartment house that is heavily mortgaged. The debtor may be collecting the rents and squandering them, instead of paying the taxes and the mortgage interest, thus courting foreclosure instead of protect ing his equity for the benefit of his creditors. These
facts would move an equity court to take over the property thru the instrumentality of a receiver. In the Province of Quebec a sequestrator would be ap pointed by the court upon petition.
21. term garnishment applies to the legal process whereby property which belongs to a debtor, but which is in the hands of a third party, may be reached to satisfy the debtor's debts. By means of this process all forms of property may be reached, including even a part of the debtor's salary. Garnishment proceedings are generally governed by the statutes of the several states or provinces which must be consulted in order to find out how and to what extent each jurisdiction permits the use of this form of securing payment.
22. Attachment.—It has already been stated that the procuring of a judgment is merely one of the steps in the legal collection of a debt. Even when a suit is diligently prosecuted, from the serving of a summons to the entering of a judgment, so much time may elapse that a fraudulent debtor may have ample op portunity to make himself "judgment-proof" by mov ing his property to another jurisdiction or by giving it away. The law provides the creditor with a so called provisional remedy against this practice. The creditor may begin his action by attaching the debtor's property. In this case affidavits are submitted to the court which, on being satisfied that there is ground for applying the remedy, will order that the property of the debtor be seized and held before judgment. If after that the creditor gets a judgment, he is imme diately in a position to satisfy it. If, however, he fails to get a judgment, the property is released and the plaintiff is bound to pay all the costs and damages. To guarantee payment he is required to put up a bond when the attachment proceedings are instituted. Since the costs and damages are relatively heavy, at tachment proceedings must be very carefully begun and as carefully prosecuted. Any of the following conditions generally constitute grounds for an attach ment : (1) if the defendant is a foreign corporation or a non-resident individual; (2) if the defendant has evaded the service of the summons; (3) if he has con cealed himself; (4) if he has disposed of his property with intent to defraud creditors; (5) if he has made a false statement in writing regarding his financial re sponsibility.