Browning v. Bettis

| New York Court of Chancery | Jan 25, 1841

The Chancellor.

From the opinion of the vice chancellor in this case, it appears probable that he was misled by the supposed admission of the counsel for the complainants, that where there was an answer by the defendant in a creditor’s bill admitting the existence of certain property, but denying that there was any other, the receiver, as a general rule, was only to take into his possession the property thus- admitted to belong to the defendant; unless, upon special cause shown, the court should order other property to be taken into the possession of the receiver for the purpose of preserving it pending the litigation. If it was proper to restrict the order in this manner, as to the delivery of the property to the receiver, it follows of course that the examination of the defendant and of witnesses, before the master, must be limited in the same way. For the only object of the examination of the defendant or of a witness, in such a case, is to ascertain whether the defendant complies with the order of the court in delivering over his property to the receiver. Indeed, if the judgment debtor is only to be required to deliver over to the receiver such property as he admits by his answer to be within his power or control, the examination of himself or of any witness before the master would be an unmeaning ceremony, and would create unnecessary and entirely useless trouble and expense.

The proper form of the order in such a case was settled by this court in Hopkins v. Wemple and others, in October, 1838, upon appeal; which case, I believe, was not reported. There the vice chancellor had allowed an order, for the examination, as broad in its terms as that which is authorized, by the 191st rule of this court, where the defendant consents that his examination before the master shall be a substitute for the whole discovery sought for by the bill. But the order was modified so as to direct the judgment debtor to assign and deliver over to the receiver on oath, all his property, equitable interests, and things in action which he had at the time of the commencement of the suit, and which were in his possession or under his power or control; and he was required to submit to an examination before the master to the same extent. But this court decided in that case, as it had often before done, that the complainant had no right to examine the defendant as to matters which were not relevant to the subject of the reference, to wit, the assignment and delivery over of the property in his possession or under his control , although he might have been required to answer as to such matters, if charged in the bill, on an order of reference under the 191st rule. This also was in conformity with the opinions expressed in the cases of Fitzhugh v. Everingham, (6 Paige’s Rep. 30,) and of Gihon v. Albert & Shaw, (7 Idem, 278.) The object of the examination in such a case is not to obtain an answer to the bill, nor is it to elicit evidence to enable the complainant to sustain his suit; but merely to procure and compel a delivery to the receiver of all the property and effects, either legal or equitable, which the defendant has in his possession or in his power or control, to abide the final decree in the cause. The rights of the complainant to examine the defendant before the master as to such property, therefore, are the same, whether the defendant has answered the bill or has suffered it to be taken as confessed for want of an answer; except in the case of an examination as a substitute for an answer, under the provision of the 191st rule.

In the present case, the answer put in by the defendant on the same day the motion for a receiver was made, and where the complainants had no opportunity to except to the same for insufficiency, could only be used as an affidavit in opposition to the motion. And it has repeatedly been decided that the mere denial, by the defendant, that he has any property, is no answer to an application for the usual order to appoint a receiver in a creditor’s suit. The order in this case must therefore be modified accordingly.

But the complainant had no right to reach, by this bill, the compensation to which the judgment debtor might thereafter become entitled, under the laws of the United States, when he should have completed the census and made a return thereof to the marshal. In the case of Carr v. Kirby, which came before this court upon an appeal from a decision of the vice chancellor of the first circuit, and was decided here on the 7th of March, 1837, the complainant in a creditor’s suit was permitted to reach the salary of a school-master, which had been wholly and completely earned, by the performance of all the services required to entitle him to the same, before the filing of the bill; although by the terms of the agreement with his employers the salary was not payable until four days after-wards. In that case, the court decided that the quarter’s salary was an existing debt at the time of the filing of the bill, though payable in futuro. But in the subsequent case of Woodworth v. Gillespie, (In Ch. 7th May, 1839,) this court decided that a creditor’s bill could not reach a compensation to become due to the defendant at a future time, for the performance of services not yet completed, and where he would have no legal or equitable right to demand payment for the services performed at the time of filing of the bill, in case he should thereafter neglect to complete the services which had not then been rendered.

The present case comes directly within the principle of this last decision ; as the defendant Bettis would have no legal or equitable right to demand any compensation whatever for what he had already done towards taking the census, as an assistant to the marshal, if he should neglect to go on and complete his returns as directed by law. By the terms of the statute, under which Bettis was acting, he was required to post up copies of the schedules before he made his return to the marshal; and his compensation for his services in taking the census was made to depend upon the number of the persons returned by him. Until he had posted up such copies, and made his return of the census of his district to the marshal, he was not entitled to any compensation whatever for any thing he had previously done. The bill in this case, therefore, cannot reach the compensation to which Bettis may be entitled, if he completes the census as required by law. And by the provisions of the 195th rule, he will be entitled to receive such compensation and apply the same to the support of himself or his family, or to defray the expenses of this suit, notwithstanding the injunction ; as it is positively sworn, that the taking of the census was not completed at the time of the commencement of the suit. To prevent any possible doubt or misconstruction of the order appealed from, in this respect, it must be so modified as to exempt the compensation to which Bettis would be entitled for his services in taking the census, which had not been completed at the time of the commencement of this suit, from the operation of the order of assignment and from the injunction ; so that he may go on and earn such compensation, by completing the services, if any, which are yet to be performed in order to entitle to him to his pay.

As the mistake into which the vice chancellor fell in this case probably arose from the erroneous concessions of the counsel on both sides, as to the extent of the usual order for the delivery of the property to the receiver where an answer was put in, which necessarily led to a restriction of the right to examine the defendant and the witness to the same extent, it does not appear to be a proper case to charge the respondent with costs. No costs are therefore to be allowed to either party on this appeal. The order as modified is to be remitted to the vice chancellor and carried into effect in the court below.