Eager v. Price, 2 Paige Ch. 333

Eager v. Price

2 Paige Ch. 333 | New York Court of Chancery | 1831

The Chancellor.

The objection that the supplemental bill was filed without a previous order does not appear to be a valid a nswer to the application. There was no necessity of filing it previous to the argument of the motion, unless the vice chancellor intended to direct an order to show cause why the injunction should not be granted; which does not appear to have been intended. But if there was sufficient in the bill to authorize the granting of the injunction, it would then have been filed as a matter of course; as the injunction could not issue until the bill was actually filed. If the injunction was proper, the fact that the complainants had through inadvertence, placed their bill on file a few days too soon, ■ would afford no ground for refusing the application then made. If they showed a case entitling them to an in junction on the supplemental bill, the order for leave to file the bill was a matter of course; and, if necessary, the complainants should have been permitted to re-file it, as of that time.

No reasons are stated for the refusal of the application; but I presume the vice chancellor did not suppose it was necessary for the complainants to get an order for leave, and actually file the supplemental bill, before notice of the motion could be given. The usual practice is to serve a copy óf the supplemental bill on the defendant who has appeared in the cause, together with a notice that the court will be applied to, upon such bill, for an order that an injunction issue .according to the prayer thereof. If the injunction is allowed, the leave to file the bill is always implied in the order, if it is not stated in express terms. Although a party may not file a supplemental bill without permission of the court, leave is usually granted on an ex parte application. If there is probable cause for filing it, the leave will be granted of course, and the court only examines the question so far as to see that the privilege is not abused for the purposes of delay and vexation to the defendant. And in a case of doubt, the court may direct notice of the application to be given to the defendants who have appeared.

The affidavit of the defendant Price that the stock which he had acquired in the canal company was partnership prop*336erty, in which .another person was interested, and that.- the stockholders are personally liable'for the debts of the com-' pany, could furnish no valid objections to the granting of -the injunction. If it is unsafe even for this insolvent defendant to continue to hold the stock in his own name, he may apply to the court for leave- to have it sold at auction, or otherwise, and to have the proceeds brought into court, of safely invested in some other way,,to abide the decision in the-cause, or until it shall be ascertained to whom the proceeds will eventually belong. .The provisions of-the revised- statutes for the protection of creditors would be rendered perfectly nugatory if an insolvent debtor could place his property beyond their reach, by' entering into a copartnership and vesting all his effects in that -concern. Where there is a bona fide copartnership, in which the' judgment debtor has' an interest, the claims of the creditors of the firm to priority of payment out of the partnership effects, and the equitable rights of the several partners, as betwen themselves, will all be preserved. But if there-is a Surplus belonging to the debtor, after satisfying all-prior equities, his separate creditors are entitled, to the aid of this court to reach that surplus; so that.it may be appropriated to the payment of their just claims against him as an individual. And he will not be permitted, under pre- ' tence of preserving the rights of his co-partners, or. of the creditors of the firm, to go on and appropriate the property to his own use. From another case recently before me, it is known . to the court that these same complainants are, also proceed: ing against the alleged partner of this defendant to obtain satisfaction of a separate debt against him. Add that he also makes the same objection that he is afraid the creditors of the firm maybe injured, or the-rights of his co-partner-viola- , ted, if he is restrained from disposing of his interest in this stock. The policy of. the law is to relieve the unfortunate debtor from imprisonment ;• but at the same time to compel him to surrender up his property and, effects of every description, or so much thereof as is necessary to satisfy the ■just claims of his 'creditors who may be equally unfortunate'with himself in having placed their property in his hands. And while I have the honor of a seat here, this court, will *337endeavor to carry the law into effect according to its spirit and intent. The court will, as far as possible, prevent the expense of useless litigation, and protect the really unfortunate against the oppression of their creditors under the forms of law; but will never permit the fraudulent debtor, by any shift or device, to place a part of his property beyond the reach of his creditors. When the man who has lived in ease or affluence becomes insolvent, either by the vicissitudes of fortune, or by his own improvidence, he must learn to recollect and to feel that the property in his possession belongs to his creditors in equity, and not to himself or to his family; and that it is his duty as an honest man to see that it is preserved and faithfully applied to the payment of his debts. If he suffers it to be Wasted in useless litigation it is generally his own fault; for he has a perfect right, before any one has acquired a priority of lien, to assign and deliver over the whole at once, either to the creditors themselves, if they will accept it, or to some faithful and responsible trustee for the payment of all his debts, rateable. He may even give a preference to favorite creditors if he chooses to waive the benefit of a discharge under the insolvent acts.

As it appeal's from the supplemental bill that the stock in question was acquired since the commencement of the suit, if the demurrer to the original bill was properly overruled by the vice chancellor, it seems to follow that this bill is necessary and proper; and that the injunction should have been granted as prayed for therein. If the original bill is defective in substance, so that no decree thereon could have been made at the hearing, the supplemental bill must necessarily fall with it, as the latter is but a continuation of the same suit. But if the complainants were right in filing the original bill, a supplemental bill seems to be the proper mode of reaching subsequently acquired property of the defendant; although in relation to its immediate object, and against the Harlsem Canal Company, it may in some respects be in the nature of an original bill, notwithstanding it is supplemental as to the former proceedings.

This species of bill is recognized by Lord Redesdale as a proper mode of bringing newly acquired interests of the par*338ties, but .relating,to the same subject before the court. (Mitf. Plead. Amer. ed. 49, 50; 4 Lond, ed. 63.) If the defend- ' ant at the commencement- of the suit, has property, of the value'of one hundred dollars and .upwards, which the com-, plainant has a right to have applied in satisfaction of his' judgment, by thé ai.d of this court, he has right to file his hilt for that purpose» He thereby acquires a specific lien on that, property, which entitles .him to a priority of payment out of that fund; subject however- to all prior equities which, existed against the same at the time of the commencement of his suit in this court. Although as against the. defendant himself he might, also Obtain a decree, which would give him the-■benefit of all other property- which belonged to the defendant, at the time the decree, was obtained, yet the original injunction does, .not- restrain the- ■ defendant from .using or disposing- of property which has been subsequently acquired, if it. is iidt the proceeds - or produce of that which belonged to the dependant.at the time the injunction was obta-inéd . If another . bill was filed by the second judgment creditor, the latter- would, obtain a priority as to the newly-acquired property» - So. also a bona fide purchaser, or another creditor, to whom it. has been assigned in payment of a debt, would be permitted to hold it' against the creditor who had filed his bill before the acquisition of that property. If therefore became • necessary for the complainants in this case, either, to file a supplemental-bill, to reach. this, stock and protect it by injunction, -or - to com-, menee a new suit for that' purpose» The expense of' a supplemental bill is but trifling, whén compared with, that of an " original suit. And this court certainly would not, except- id a' case of absolute necessity and to- prevent a failure of justice, allow two original suits,-to be commenced, and carried On áí "the. same-time, between the samé parties, to .obtain satisfaction of the sanie debt.; I think therefore, this was-a - proper case for a supplemental bill, and, that the. injunction .should have been granted as prayed for therein.. :

As the costs of the' complainants, both tin original and supplemental bills, aye entirely in. the discretion of the court, they would not be permitted,to abuse the privilege by‘harassing . an unfortunate debtor-with supplemental bills, having' no oth*339er object than to deprive the family of the defendant of the fruits of his daily earnings, or to multiply costs. And if a supplemental bill is unnecessarily or improperly filed, it may be dismissed at the hearing, although the complainant obtains a decree on the original bill.

The decision of the vice chancellor must be reversed, and an injunction must issue, according to the prayer of the supplemental bill; and Price, the respondent, must pay to the appellants their costs on this appeal, to be taxed. The proceedings must be remitted to the vice chancellor that the injunction may be issued accordingly; and that such further proceedings may be had before him as may be necessary to carry into effect this decision.