Court Opinion

ID: 3603457
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:49:34.018835+00
Date Added: 2024-06-11T13:58:28.391579
License: Public Domain

The most material of the questions discussed in this case is whether the recorder of the city of *Page 328 
Troy had jurisdiction to entertain the proceedings which resulted in the appointment of the plaintiff as receiver. The Code confers the jurisdiction upon a judge of the court in which the judgment against the debtor proceeded against was recovered, or a county judge of the county. (§ 292.) An act of the legislature, passed in 1849, entitled "An act in relation to the recorded of the city of Troy," (Laws of 1849, 164) enacts that the recorder shall have and exercise within said city, among other powers, the powers given to a county judge by sections two hundred and forty-seven to two hundred and fifty-seven inclusive of the Code of Procedure. These sections provide for proceedings supplementary to the execution, and are substantially the same as sections two hundred and ninety-two to three hundred and two of the amended Code now in force. The power of the recorder was therefore ample so far as the legislature could confer it, and the only question for consideration is, whether the statute of 1849, in the particular referred to, was a violation of the constitution of this state. The counsel for the defendants maintains that the remedy established by the Code, under the name of "Proceedings supplementary to the execution," is a branch of the jurisdiction of a court of equity, and that the constitution (Art. 6, § 3) having established a Supreme Court with general jurisdiction in law and equity, and having abolished the former court of chancery as well as the former Supreme Court, all judicial business cognizable in courts of equity must be transacted in the Supreme Court organized under the constitution, except so far as the constitution itself has otherwise provided; and that the only authority for conferring equitable judicial powers upon any other tribunal, is found in section fourteen of the same article, in which it is declared that the legislature may confer equity jurisdiction in special cases upon the county judge. These provisions of the constitution, it is argued, are in their nature exclusive, and by inevitable implication forbid the legislature from committing the jurisdiction *Page 329 
exercised by the recorder in this case to any court or magistrate other than the Supreme Court and the county judge.
The first inquiry which presents itself is whether the proceeding established by the sections of the code which have been referred to, is a branch of the jurisdiction of the Court of Chancery. It is no doubt true that a process similar in some of its results but far more extensive and remedial in its results, was, at the time of the formation of the constitution, conducted in the Court of Chancery under the name of proceedings by creditor's bill. That process was commenced by a bill of complaint and was followed by regular pleadings according to the forms in use in that court, and resulted in a decree by which the rights not only of the judgment debtors, but of all other persons who were made defendants, as trustees of the debtor or fraudulent alienees of his property, were conclusively determined; and final process according to the course of proceedings in that court might issue upon its decree. It was in short a regular suit in equity, founded in part upon principles inherent in that court but also regulated by statute. (Hadden v. Spader, 20 John.,
554.) Full power is given to the legislature, by the constitution to alter and regulate the jurisdiction and proceedings in law and equity; (art. 6, § 5;) and this power has been unsparingly exercised, independently of the particular enactments under consideration. I think it will appear from an examination of the provisions of the Code regulating the proceedings supplementary to the execution, that the magistrate in these cases is not clothed with equitable jurisdiction. The general object of the proceeding is to enable the creditor to enforce the execution of a judgment already obtained. Before a step can be taken, a competent court must have adjudged against the debtor the amount of debt or damages claimed. The magistrate before whom the proceedings are had can give no judgment or make any order affecting in the slightest degree the rights *Page 330 
of any person claiming to hold property under title derived from the debtor. The remedy afforded to the creditor is the compelling of the debtor under pain of imprisonment to hand over for the use of the creditor, to be sold and applied on the judgment, such property as he may own, and to create a trustee for the creditors in whose name the trustees of the debtor, or persons owing him or having his property in their hands, may be prosecuted for the benefit of the creditors. As auxiliary to these objects the officer is empowered to institute an inquiry in order to ascertain, in a summary way, what property the debtor possesses, subject to the remedy, and to forbid the transfer of it pending the proceeding. This differs materially from the remedy afforded in chancery by creditor's bill. That remedy was based upon the jurisdiction which courts of equity possessed to determine conflicting claims in cases of trust and fraud. When the question as to creditors' bills first came before the Court of Errors, they were sustained as falling under the ordinary heads of equity jurisdiction. Judge WOODWORTH stated the question to be "whether a debtor who has placed his funds in the hands of a trustee
where they cannot be reached by an execution at law, can put his creditor at defiance and enjoy the benefit of those funds which ought to be appropriated to the payment of his debts." (Hadden
v. Spader, supra, 564.) In the summary proceeding under consideration all litigation between the creditor and a third person is prohibited. It is only in cases of property held confessedly and nakedly for the use of the debtor, that the process can operate at all upon a third person. The officer can try no question of trust or of fraud. If the grounds for such a litigation are presented they are referred to the appropriate court and to the appropriate action, to be prosecuted by the receiver. I am of opinion therefore that the proceeding does not bring into exercise the peculiar jurisdiction of a court of equity, and that the statute is not obnoxious to the objection that it creates a tribunal other than that provided by *Page 331 
the constitution to hear and determine cases of equitable cognizance.
The remedy in this respect afforded by the Code is similar in its scope to that furnished by the act "to abolish imprisonment for debt and to punish fraudulent debtors." (Laws of 1831,ch. 300.) By that act and the statutes amending it, if a judgment debtor fraudulently concealed his property or refused to apply his choses in action to the payment of a judgment, he might be proceeded against before a magistrate; and if the complaint was sustained, he was imprisoned until he would transfer the property to an assignee for the benefit of the creditor. (Hall
v. Kellogg, 2 Kern., 325.) This statute was in full operation at the time of the adoption of the constitution. I can see nothing in that instrument hostile to its continued existence, or to the institution of any similar remedy which the legislature might see fit to establish.
There is another view which may be taken of this case. The act of 1849, respecting the recorder of Troy, also confers upon that officer "the powers of a judge of the Supreme Court at chambers." The proceedings supplementary to the execution may be conducted by a judge of the Supreme Court, when the judgment was in that court. In such cases the things to be done by the judge may be properly considered as belonging to that class of business which is transacted by a judge at chambers. A case was referred to on the argument holding that in this aspect of it the statute in question could not be reconciled with the constitution. (Griffin v. Griffith, 6 How. Pr. R., 428.) The argument by which that proposition is sustained is, in some espects, similar to that which I have been examining. The legislature, it is said, having provided for a Supreme Court having general jurisdiction in law and equity, and having, by a special provision, authorized the legislature to charge the county judge with such duties as may be required of him by law, and having also provided, in certain cases, for the election of local *Page 332 
officers to exercise such powers, in special cases, as may be provided by law, and having, moreover, expressly abrogated the office of Supreme Court commissioner, there results an implication, as strong as an express provision, that the mass of business relating to suits in the Supreme Court heretofore transacted out of court by the judge, and by Supreme Court commissioners, must hereafter be performed by the judges themselves, except so far as it may be devolved upon county judges and the local officers referred to, and that it cannot now be committed to any other class of existing officers. (Const.,art. 6, §§ 3, 14; art. 14, §§ 8, 12.) If this was the design of the convention, it has not, in my opinion, been expressed with sufficient distinctness to form the ground of a legal judgment. There may have been other reasons than those suggested for abolishing the office of Supreme Court commissioner. Those officers had become very numerous, their appointment in different localities having been provided for by a great number of special statutes. (1 R.S., 96, 3d ed.) There may have been reasons for putting an end to this class of officers quite distinct from the motive which would prohibit the legislature from committing to existing functionaries the performance of the duties with which they had been charged. The duties themselves were not abolished, and could not be without changing the practice of the court. The circumstance that a provision was made for giving additional powers to the county judges in the discretion of the legislature does not much advance the argument. The office of county judge was provided for by the constitution, and it was natural its duties should have been marked out as far as was practicable, and that the power of the legislature to add to its functions should have been mentioned; and so with the local officers. I see nothing inconsistent in these provisions with the power of the legislature to provide for the transaction of the chamber business of the Supreme Court by committing it to existing judicial *Page 333 
officers in the manner which has been done by the act under consideration.
It has been decided in this court that a receiver under these proceedings may sustain an action to impeach a conveyance, made by a debtor, for fraud against creditors; and the same case holds that the real estate of the debtor, as well as the personal property, is subject to this remedy. (Porter v. Williams, 5Seld., 142; Chautauque Bank v. White, 2 Seld., 236.)
The judgment of the Supreme Court must be reversed; but, according to a stipulation in the case, the defendant is to have leave to amend by putting in a new demurrer or answer, on payment of costs, and compliance with such other terms as may be imposed by the Supreme Court.