3 Wend. 618 | Court for the Trial of Impeachments and Correction of Errors | 1829
Lead Opinion
The following opinion was delivered by
I believe it was not controverted on the argument, that if any one of the exceptions to the answer was well taken, the chancellor’s order overruling the general exception to the master’s report was properly granted. The ground on which the appeal is placed is, that after the denial of all fraud, the answer is full to all those things concerning which the appellant could, by the authority of the court, be required to make an answer. The decision of this appeal involves, as the appellant supposes, a question as to the jurisdiction of the court of chancery to compel an answer to certain matters about which he is interrogated in the bills. If the powers of that court are as extensive as they are stated to be by Woodworth, J. in his opinion in the case
The relief asked for and granted in the case of Spader v. Hadden, (5 Johns. Ch. R. 280,) lay within the uncontested powers of the court; but the doctrine advanced by some of the judges when that case was reviewed in this court, went greatly beyond the principle necessarily involved in it, and is supposed by Chancellor Sanford not to have the sanction of the court. Nothing can be certainly said to be established as law by this court in a particular decision but what is necessarily involved in the case decided. The truth of this proposition is shewn by the case of Hadden v. Spader. Mr. Justice Woodworth held that a judgment creditor, after he had proceeded to the extent of the remedies given by a court of law without obtaining satisfaction, could reach the trust property of his debtor by invoking the aid ofa court of equity. He is understood to hold that the judgment creditor in such a case can resort to the debtor’s stocks and the debts due to him, even where the stock was not purchased or the debts creatad by means of the property fraudulently withdrawn from the judgment of the creditor. To these views Ch. J. Spencer gave his explicit sanction. Platt, justice, yielded his assent to the conclusion of Mr. Justice Woodworth, but qualified his opinion by saying that he was “ not prepared to extend the doctrine to any other cases than those wherein the trusteee received goods liable in themselves to execution, under circumstances which imply fraud in fact or in law as against creditors.” “ In an abstract view it may appear proper,” he says, “ to extend the remedy in favor of crediors to every chose in action; but, in my judgment, such power has not been conferred on our courts of justice.’ Al
Chancellor Sanford, in the case of Donovan v. Finn, examined with great care the doctrine advanced in the opinions given in the case of Hadden v. Spader, and he considers that “the cases of authority in which relief has been given to judgment creditors were in themselves cases of equitable jurisdiction, involving fraud or trust, or seeking to subject to the satisfaction of a judgment, property in itself liable to execution, by removing a conveyance which operated as a fraudulent impediment to the execution.” His conclusion is, that the court of chancery “ has no power to compel the debtor of a judgment debtor to make payment to the judgment creditor in satisfaction of the judgment.”
There is an obvious difference in the views of these learned judges as to the jurisdiction of courts of equity in granting aid and relief to judgment creditors which it would be our duty to adjust, however difficult it should prove to be, if the decision of this case required it; but in my view, it may be decided without attempting to settle this contested boundary of jurisdiction; and any labour, therefore, for this purpose would be not only unnecessary, but unprofitable, for the power to grant relief to the utmost extent it was pushed, by any remazks made in the case of Hadden v. Spader, will become in a very few days a part of our system of jurisprudence by legislative recognition or adoption.
It is contended on the part of the appellant, that relief in cases like this can only be afforded where fraud exists; that the answer having denied all manner of fraud, the gravamen of the bill is removed and po further answer can be required. It is undoubtedly correct, that where a defendant dezzies some substantive fact which, if true, would entitle the complainant to relief, and if not true would be a complete bar to it, no further answer can be compelled till the truth of that fact is established. The case1 put to illustrate this doctrine is that of a bill filed by a person representing himself
Confining the jurisdiction of the court of chancery to the narrowest limits that have ever been assigned to it, power it certainly has and exercises daily, of requiring answers to such allegations as the appellant in this case was wholly omitted to answer, or has answered imperfectly. He is charged with being the owner of real and personal property of some name or nature to a large amount; and that he has property which others hold by some secret trust, and under a colorable title. He is called on to answer to these charges. He denies having been possessed or seised of any real estate at the time or since the recovery of the judgments, but he omits to answer whether he had not personal property at the time
It will not be expected that a particular opinion should be given on each exception, because, as has been before observed, if a single one of the twenty-six is well taken, the decision of the court must be for the respondent.
In the particulars above specified as well as others, I think the exceptions to the answer are well taken, and I am therefore for affirming the order of the chancellor.
Concurrence Opinion
expressed his concurrence in 'the opinion delivered by Mr. Justice Marcy. He said he had not examined the main question, not deeming it necessary to the decision of this cause; his impressions however were, that under the existing law, a defendant is not bound to answer as to property which never was within’ the reach of an execution; that he could only be called on to respond as to such property which had been fraudulently withdrawn from the operation of an execution.
Mr. Justice Sutherland also concurred in the opinion delivered by Justice Marcy, but declined expressing an opinion as to the point alluded to by the Chief Justice.
The appellant insists that he has answered the points excepted to as far as he was bound and compelled to answer; and that he was not bound to disclose his interest in any public stock er stocks,
There are several cases in which the principle has been clearly recognized, that a court of chancery has the power to compel the discovery of personal property, placed by the debtor beyond the reach of legal process ; and I am unable to discover any good reason, and the counsel for the appellants has adduced none, why public stocks, notes of hand, bonds, or debts of any kind should be exempt from execution any more than other estate whether real or personal, or why the effect of a judgment should be defeated while the debtor may be in possession of a large property of the kind alluded to.
That the principle of-compelling a discovery and account of such property has been acted on by our equity courts, appears from the case of Hendricks v. Robinson, (1 Johns. Dig. 205,) where it was held, that chancery will lend its aid to a judgment creditor, by compelling a discovery and account against a debtor or third person, who had possession of the debtor’s property, and -placed it beyond the reach of legal process. The same is the case of Hadden v. Spader, and so important has the principle been deemed by the legislature that it has been incorporated in the revised statutes, which go into effect on the first of January, 1830.
The justice and equity of this rule appears to me indisputable, for what can be more reasonable than that every man possessing the means should pay his honest debts; and if he possess the means, and place them in a situation beyond the reach of legal process, is there any injustice in compelling him to render an account of the property thus fraudulently concealed 1 The provisions of the insolvent laws of this state, and the practice under them, gives good reason to fear that acts of concealment are by no means uncommon, and it is of importance to the morality of the community that our courts of equity should be sustained in their endeavor to arrest this growing evil. My opinion is, that the order of the chancellor was proper and ought to be affirmed.
This being the unanimous opinion of the court, the order of the chancellor appealed from was thereupon affirmed.