Court Opinion

ID: 9832362
Source: CourtListenerOpinion
Date Created: 2023-09-01 21:51:27.424521+00
Date Added: 2024-06-11T07:43:46.058038
License: Public Domain

ON MOTION FOR REHEARING.
Stewart & Stewart, for motion for rehearing.—In defendant in error's brief in the Court of Civil Appeals we citednumerous authorities, showing that our District Courts had full equity powers and could give a-creditor seeking its aid any remedy that a court of chancery in England could, and we refer the court to. brief filed. The court now holds, that only in cases of estates of deceased persons, and where there was a trust, or to set aside a fraudulent conveyance, could the remedy we seek bh maintained in a court of chancery. The court admits that Freeman, Pomeroy, Bispham, and Story in their works sanction such a proceeding, but differ with those learned law writers in their construction of the province of a court of equity. In our brief we did not deem it necessary to show many authorities that this proceeding could be maintained in an-English court of chancery. We took it for granted that the court would not deny that, and only undertook to show that the action could be maintained in our own District Courts. Because cases cited in the equity reports are mostly against the estate of a deceased person or a trust fund; the court has fallen into the error that it only applied in such cases. It is a general rule, that to reach the equitable interest of a debtor in real estate by suit in chancery, the creditor should first obtain a judgment at law; an<J to reach personal property, both a judgment and execution should be shown. One exception to this rule is where the debtor is deceased; an*397-other exception is where the claim is to be satisfied out of a fund accessible only by aid of a court of chancery. Russell v. Clark, 7 Cranch, 69; Brinkerhoff v. Brown, 4 Johns. Ch., 671; O’Brien v. Coulter, 2 Blackf., 421; Cloud v. Hamilton, 3 Yerg., 81; Rhodes v. Cousins, 6 Rand., 188.
In instances of claims against trust funds and deceased debtors, the creditor went at once into a court of chancery, without waiting to exhaust legal remedies, and as a result the cases in regard to such matters are much more numerous; but there is no decision of the English Court of Chancery that the action now before the court can not be maintained. * * * The power of a court of equity is broad and far reaching, and does not allow technicalities to prevent it from striking down fraud and tearing away the veil that hides it.
Where a bill seeks a discovery of fraud or of fraudulent acts of the defendants, if they do not subject him to criminal proceedings, he is bound to make the discovery. Jansen v. Solarte, 2 Younge & Coll., 132, 136; Hare on Discovery, 140, 142; Green v. Weaver, 1 Sim. R., 404, 427, 432; Story Eq. Plead., sec. 589, and note; Robinson v. Robinson, 35 Eng. L. and E., 558.
It is unquestionable that chancery will decree a discovery to detect fraud and imposition. Bennett v. Musgrove, 2 Ves. Sr., 51; Bickwell v. Gough, 3 Atk., 558; Kimberly v. Sells, 3 Johns. Ch., 467, 471; Earl of Deloraine v. Brown, 3 Bro. C. C., 633; Mitchell v. Harris, 2 Ves. Jr., 129; Lord Lonsdale v. Littledale, 2 Ves. Jr., 451; King v. Morton, 3 Ves. Jr., 641.
“ Courts of chancery decreed payment of debt, and by its process for obtaining discovery it was enabled effectually to ascertain assets.” Suits of this description, and proceedings upon them, are found in the calendars from the reign of Edward YI downward. 1 Spence’s Equitable Jurisdiction of the Court of Chancery, 579; 1 Cal., 93; Eliz. Cary, 11. A bill of this nature lies, it seems, against third persons for the discovery of moneys paid after notice of a sequestration. Simmonds v. Lord Kinnaird, 4 Ves., 735. So it lies for a discovery of concealments of a bankrupt’s estate. 1 Atk., 289. It lies also against assignees to discover a fraudulent bankruptcy to defeat the plaintiff’s execution. King v. Martin, 2 Ves., 641. Such a bill lies by the Attorney-General against an outlaw, to discover his real and personale state (Hard., 22 Eq. Ca. Abr., 75 S. C.), or by the patentee of the goods of a felon, or one outlawed. Cary. Rep. 1, 21; Hard., 22; 2 Fonblanque’s Treatise on Equity, 481. Judgment creditors have a right to a discovery where the creditor’s real or personal property is, in order to make their judgments available. Mountford v. Taylor, 6 Ves., 792.
If A obtains a judgment against B and takes out execution, and gets it returned nulla bona, he may bring a bill against the defendant, or any other, to discover goods or personal estate of B, and by that means *398to effect the same. Balch v. Wastall, 1 P. Wms. Rep., 445; Smithier v. Lewis, 1 Vern., 399.
In the case of Mitchell v. Bunch, 2 Paige Chancery, 606, it is stated, that independent of the statute the court had jurisdiction to compel a debtor, whose body is exempt from execution at law, to discover his property, so that it may be applied in satisfaction of his just debts, and cites in approval the decision of Lord Hardwicke in Edgell v. Haywood & Dawe, 3 Atk., 352. “ Where certainty wanteth the common law faileth, but yet help is to be found in chancery for it.” 36 Hen., 23; Cary, 21. This was a rule governing the practice of courts of chancery, yet this court has rendered its opinion in direct opposition to the practice of these courts. If defendants knew specifically and particularly where all the property of plaintiffs in error was situated, and the condition of same,' an execution would be the remedy, and no need would be-required of the assistance of a court of equity.
In regard to form of bill, as being too vague and indefinite, we refer to Barbour’s Chancery Practice, 38; Puterbaugh’s Equity Pleading;. Story’s Pleading, and all works on equity practice.
GAINES, Associate Justice.
Counsel for defendants in error, in support of their motion for a rehearing in this case, have filed an able and learned argument, supported by an ampler citation of authority than was-contained in their original brief. At the time the former opinion was-delivered, the text books exclusively devoted to the law of “ Discovery ¡ ’ were not at our command. This probably arose from the fact that it was-thought that the rules in regard to discovery had been substituted by statutory enactment, and that the learning upon that subject had become-in a measure obsolete. Since the filing of this motion we have procured the authorities necessary to enable us to make an exhaustive examination of the question, with the result, that we deem it proper to modify some-expressions in the former opinion without changing our disposition of the-case.
In Hare on Discovery, chapter 5, section 1, page 80, it is laid down,, that a discovery is given only in aid of some trial. But in a succeeding, section (3, page 84) that author says: “There are some early cases which appear opposed to the rule which has been stated in the preceding sections, that a discovery will only be given to be used as evidence at a trial.” The text is mainly predicated upon a case in Cary Reports, page-21, the name of which is not given; upon The Protector v. Lumley, Hardwicke, 22, and upon Mountfort v. Taylor, 6 Vesey, 788.
The Protector v. Lumley and the case in Cary were bills for the discovery of the goods of an attainted felon, which had been forfeited to the-crown in the one case; and for the goods of an outlaw, which had been forfeited to the commonwealth in the other. The origin and nature of *399that jurisdiction is explained by Reeves, in his History of English Law, as follows: “A grant was made by letters patent of goods forfeited by a person attainted; the grantee brought his bill in chancery against the person who had possession of them, for this reason, that as the king.could not have an action at law for the goods of an outlaw or one attainted before they had been seized for the king’s use or found by a matter of record, much less could the grantee without having had the possession - Accordingly it was held, the subpoena was his only remedy, and the defendant was ordered to exhibit an inventory of the things the next day,, on pain of being committed to the fleet.” 2 Reeves’ Hist. Eng. Law, 602.
In Mountfort v. Taylor, Lord Elden granted a discovery in aid of an elegit; but from the report of the case we have but little doubt in our minds.
In Equity Cases Ab., 132, the case of Taylor v. Hill is thus reported: “The plaintiff having recovered judgment against J. S. (but no writ of execution sued out), supposing .some particular effects of J. S. to be in defendant’s hands, brought a bill to discover them, in order to subject them to his judgment. The defendant demurs, because there is no equity to compel such a discovery, and no such bill would lie against the debtor himself, much less against a third person. My lord keeper seemed to agree it would not lie against the debtor himself, nor to have a, general discovery from a third person, but only for particular things, as this bill was, and overruled the demurrer.” This would seem to indicate that the court was of opinion that no bill of the character would lie except to discover property specifically described, though it admits of the construction that the demurrer may have been urged upon the ground that no execution had been sued out. We note in this connection, that the bill was very similar to the petition in Cronin v. Gay, 20 Texas, 460, in which it was held expressly that bills of discovery had been abolished in this State.
These authorities seem to us to leave the matter in doubt; and there, as an original question of equity jurisdiction, we are content to leave it. We have commented upon the cases merely for the purpose of modifying our former opinion, in so far as the intimation may be drawn from it that no case can be found in the English courts which gives color of authority to the proceeding instituted in this case.
If the courts of equity in England ever entertained bills of discovery of this character, and if the jurisdiction became incorporated into our system of jurisprudence by the adoption of the common law, we are still of opinion that it is no longer the law of this State. Neither the decisions of the English courts upon the effect of their statutes, which allow a discovery in the courts where the suits are pending, nor the decisions of the courts of other States upon similar statutes, can be taken as a guide in determining the effect of our own laws upon the subject. There is an *400apparent conflict of authority in our State courts. Some hold merely that statutes which permit the parties to testify, or which allow interrogatories to be filed to the opposite party, do not take away the jurisdiction of courts of equity to compel a discovery. Shotwell v. Smith, 20 N. J. Eq., 79; Edison v. Hughes, 1 Head (Tenn.), 223; Russell v. Dukesheid, 2 W. Va., 61; Cannon v. McNab, 48 Ala., 99; Millsapp v. Pfeiffer, 44 Mass., 805. In all of these States the separate jurisdiction of the law and equity courts is maintained. The contrary is held in Missouri, where the courts exercise both law and equity jurisdiction (Bond v. Worley, 26 Missouri, 251); and in Hurd v. Bank, 1 Morris (Iowa), 291; and in Reopelli v. Doellner, 26 Michigan, 102, where the jurisdictions were separate. See, also, 9 Blatch., 316.
Delivered February 5, 1894.
Not only was law and equity blended into one system of jurisprudence by our statutes at the same session of the Congress of the Republic at which the common law was adopted, but at the same time a system of procedure was established, which is borrowed from the practice both of the courts of law and those of equity, as recognized at common law. Writs peculiar po courts of equity were prescribed for by statutory regulation, and at an early day provision was made by statute for the perpetuation of testimony, and for the discovery of evidence in a pending suit by simply filing interrogatories to the opposite party, the answers to which had the effect of an answer under oath to a bill in equity. At a later day, it was provided as a cumulative procedure that either party to a suit could take the deposition of the adverse party.
The effect of our statutory system was passed upon in Cronin v. Gay, supra, and it was held that bills of discovery were thereby abolished. This decision was doubtless well known to the able lawyers who compiled our Revised Statutes, and yet all the provisions of the old statutes in regard to the law of evidence were incorporated in that revision without change. See Report of Commrs., 2 Sayles’ Ann. Stats., 726.
When the Legislature re-enacts a statute which has been construed by the courts, the presumption is that it intended that the new enactment should receive the same construction as the old. The rule is universa^, and is conclusive of the question under consideration. If, however, the question were one of first impression, we see no good reason which would impel us to a different conclusion.
The motion for a rehearing is overruled,