White v. Geraerdt

1 Edw. Ch. 336 | New York Court of Chancery | 1832

The ViOB-CnANCELLon.

When this suit was instituted, the lime allowed for paying the money decreed had not elapsed, but Mrs. Geraerdt had submitted to an examination before the master; and from which it appears, she was insolvent and destitute of all means, except about four hundred dollars and the money payable by the bill of exchange in question. There was no disposition to apply these funds to the proper purpose; on the contrary, she afterwards sent to demand both bills of exchange and sought to get them into her possession against the notice which the complainant had previously given. There is reason to believe her intention was to withhold the whole from the substituted trustee.

The justice of the" case certainly requires the money should be applied towards discharging the debt established by the decree. If the money were-in her hands, the power of this court would be sufficient to reach it: for, besides the statutory mode enforc¡ng decrees of this court, by executions similar in all respects to executions upon judgments at law, there is no doubt but the ancient process of attachment and sequestration may still be resorted to. Although, in a great measure, superseded, this course of proceeding has not been prohibited or abolished. It remains to be pursued whenever it may be deemed necessary. After a decree for the payment of money or performance of a duty, the goods of the party, his money and the rents and profits of his lands may be applied, upon a sequestration, to the payment of the demand: 2 Brown’s Ch. Pr. 738; 2 Harr. (Newl.ed.) 334; and, although it has sometimes been questioned whether choses in action are liable to a sequestration, there can be no objection to it upon principle. It is analogous to the power which this court- now constantly exercises over the equitable interests and things in action of the debtor, where a judgment at law has been recovered and proves unavailing upon the writ of fieri facias. The same reason exists for aiding the creditor by decree; and, surely, this court will go as far in that case as in the other, in order to compel satisfaction out of a species of property which cannot be reached by ordinary execution.

There are cases to show how this has been done through the medium of a sequestration. Tothill mentions several, where money was decreed to be delivered to a plaintiff out of other men’s hands, in the nature of a sequestration; as well as, where, after a defendant was committed for non,-performance of a decree, the court ordered a sequestration in order to levy upon moneys of his in the hands of other men: see undér the head of “Money” and “SequestrationToth. 135 and Í75. And in Hyde v. Pettit, 1- Ch. Ca. 91, it was stated, that a sequestration had been extended so far of late as to sequester things in action, which no execution at common law could reach, and the consequence whereof, it was argued, would be destructive to trade and commerce; but the court entertained no such apprehension and held a sequestration to be a necessary process of the court. In Simmons v. Lord Kinnaird, 4 Ves. 735, these cases, and some others before Lords Macclesfield and Bathurst, were referred to in argument, and the effect of them, as binding authorities, was questioned. Lord Eldon, however, declined deciding any of the points which were there presented, and overruled the demurrer upon technical grounds; at the same time intimating, pretty clearly, the strong inclination of his mind to favor the process of sequestration to the full extent desired. Lord Talbot, in Martin v. Kerridge, 3 P. W. 240, admitted the propriety of a sequestration where a party taken into custody by process of attachment continued in prison without paying the debt.

I have no hesitation, therefore, in saying, this court is competent, through the medium of sequestration, to lay hold of property of every description any where within its jurisdiction, belonging to a party in contempt for not obeying a decree; and also, has power to apply it in satisfaction of the debt or duty-decreed against such person.

Is there then or can there be any valid objection to the exercise of the same power in another way, in order to attain the same end? I think not, provided special circumstances require it. In the present case, instead of waiting until an execution upon the decree or process of attachment could issue and be followed up, if necessary, by sequestration, (which, if pursued, would, there is every reason to believe, have been too late for any beneficial purpose,'the present complainant having just been appointed trustee and entitled to receive the money,) he files the bill in this cause in his own name, in order to reach the trust fund, obtain the effect of the decree in the former cause, and get an injunction restraining the defendant, in the mean time from receiving the money payable to her by virtue of the bills of exchange.

The objection is, that no such bill can be sustained, except in favor of a judgment creditor at law after his remedy there has been fairly exhausted. This objection only goes to the matter of jurisdiction. If the debt or demand is purely of legal cognizance, it is undoubtedly necessary for a party to pursue his remedy in a court of law, by recovering a judgment and having an execution returned unsatisfied, before he can ask for the aid of this court; but, where a demand is originally an equitable one, and the party has proceeded here and obtained a decree for the payment of the money, it can no longer be a question whether this court has jurisdiction to entertain a new bill for a discovery of property liable to satisfy the decree.

• Under the circumstances of this case, I think it was proper in the complainant to exhibit a new bill. There are, certainly, strong claims upon the justice and equity of the court to sustain it. -The defendant has received a large amount of money, as trustee under a marriage settlement for the benefit of her daughter ánd grand children, the issue of the marriage, of whom there are now three, which she was bound by every tie of filial affection, as well as of moral and legal obligation, to preserve for their use; but which she has misapplied in violation of her trust—and she is now confessedly insolvent. A sum of money belonging to her happens to be within the jurisdiction of this court, not sufficient to make a full satisfaction, but, which, if applied, will lessen the debt to a considerable extent, and she refuses to ' permit it to be so applied: although no other creditor is shown to have any claim upon it. Under these circumstances, a court of equity is called-upon to exercise its authority in favor of a feme covert and of infant cestui que trusts, (peculiar objects of its care,) and to appropriate the money to their use as a substitute for what has been improperly taken from them.

In analogy to the practice in cases of sequestration and upon the principle of substitution, I am of opinion the court is fully authorized so to decree. I shall direct the complainant’s costs of this suit to be paid out of the five thousand five hundred and three dollars and forty-eight cents, and the residue of the money tobe paid over to the complainant, as so much on account of the former decree, and the same to be-held by him-as a part of the trust estate; and, likewise, that the sum- of two thousand four «hundred and ninety-six dollars be also paid over to him as a further part of the trust estate.