text:
    Cumming vs. Waggoner.
    Upon a reference to a master to examine the defendant on interrogatories re. lative to an alleged contempt, and to take such other proof concerning the contempt as shall be produced before him by either party, the master is not authorized to receive the ex parte affidavits of witnesses ; unless he is specially directed, by the order of reference, to receive such affidavits as proof. And as a general rule the court will not allow ex parte affidavits to be used on such a reference; but will compel the parties to produce and examine the witnesses before the master, so that they may be cross-examined by the adverse party.

      July 2.
    The defendant in this case was brought before the court upon an attachment for an alleged breach of an injunction issued upon a creditors’ bill. And a reference was made to a master to examine the defendant on interrogatories, and to take such other proof concerning the alleged contempt as should be produced before the master by either party, and to report such answers and proofs to the court. But there was no provision in the order of reference authorizing either party to produce affidavits before the master. Upon the reference, the complainant produced and examined various witnesses, in relation to the alleged contempt and the extent of injury which he had sustained thereby. But the defendant, instead of producing his witnesses before the master, with one or two exceptions, produced their affidavits before the master, taken ex parte; which proof was objected to by the complainant’s counsel as unauthorized by the order of reference. The master received the affidavits subject to the objection and annexed them as a schedule to the report. Two breaches of the injunction, the one for receiving $6,50 due on a judgment to the defendant, and the other for selling wood to the amount of $3, were admitted by the defendant in his answers, in connection with the proofs. But the principal breach consisted in the defendant’s cutting down and carrying off the wood and timber from land which the complainant had contracted to sell to the defendant, for a part of the purchase money of which land the judgment on which the bill in this case was founded had been recovered against the defendant. In the answers of the defendant to the interrogatories he attempted to change the alleged breach of the injunction, as to the cutting and sale of the timber and wood, into a mere wilful trespass; by swearing to a parol agreement, previous to the issuing of the injunction, to give up the possession of the lot to the complainant as his property; as to which alleged agreement various witnesses were examined, or their ex parte affidavits produced. And the cause was heard before the chancellor for a final decision as to the alleged contempt.

      I. Williams, for the complainant.

      T. B. Mitchell, for the defendant.
   The Chancellor.

Two breaches of the injunction are ■clearly established, the injury of which to the adverse party does not exceed $8,50. The principal injury arises from the alleged breach in cutting down and carrying off or selling the wood and timber upon the lot which the defendant had contracted to purchase from the complainant. Even if the affidavits taken ex parte, and produced as proofs before the master, had been authorized by the order of reference, they would not materially vary the case. It is evident from the whole case, that at the time this wood and timber was cut the defendants had a subsisting equitable interest in this wood lot, under the complainants written contract therefor, and that he entered and cut the wood and timber in question under a claim of such interest; notwithstanding the pretended parol agreement to give up the possession. I do not believe, from any thing that is before me in this case, that the defendant supposed he and those with whom he acted were committing a wilful trespass, upon lands to which he had no legal or equitable claim. But he probably did not, ■at the time, reflect that in thus asserting his right to the possession of the lot, he was guilty of an act which was equally criminal as a wilful trespass in cutting timber; a breach of the injunction of this court. I must therefore declare that ■the defendant is guilty of the contempt and misconduct charged against him in this respect, as well as in receiving the $6,50 on the judgment of Yates and the $3 for wood of ■Spraker.

As to the extent of the injury which has been sustained by the breach of the injunction, the ex parte affidavits produced by the defendant vary materially from the testimony of most of the witnesses who have been examined and cross-examined before the master. It is therefore necessary to inquire whether those affidavits are properly before the court, for the purpose of disposing of this case. The statute provides that the court may receive any affidavits or other proofs, contradictory of the answers of the defendant, or in confirmation thereof. (2 R. S. 537, § 19.) It is therefore a matter of discretion in the court to receive affidavits, in confirmation of the answer, or to contradict the same ; as well as proofs taken by the examination of witnesses in a more formal way. But as much less reliance can be placed upon ex parte affidavits than upon the testimony of a witness taken in a different manner, where the adverse party may have the benefit of a cross-examination, the practice of the court, under these provisions of the revised statutes, has generally been to refer it to a master to take the answers of the defendant to the interrogatories, and to take such proofs as either party may produce before him in relation to the alleged contempt. In this way the parties are enabled to compel the attendance of unwilling witnesses, to give testimony before the master; and the benefit of a cross examination is secured. But such order does not authorize the master to take ex parte affidavits, as proofs before him, unless there is a special clause in the order to that effect; as I think there was in the case of Stagg v. Outwater, referred to by Mr. Hoffman as having been decided in November, 1833. (1 Hoff.Prac. 437.) Where there are any circumstances rendering it proper that affidavits of any of the witnesses should be received, instead of requiring a personal attendance and examination before the master, the counsel should ask for a special clause to that effect to be inserted in the order of reference; or a clause reserving to him the right to read such affidavits before the court, after the master has reported the answers of the defendant and the proofs taken before him. As a general rule, however, the court will not allow any new affidavits to be used, where there is a reference to a master to take the proofs of the parties relative to the alleged contempt; but will compel them to bring their witnesse's personally before the master, so that they may be cross-examined by the adverse party.

As the counsel for the defendant has undoubtedly proceeded upon the mistaken supposition that these affidavits might be used, upon the final decision of this application, in the same manner as if the witnesses had been formally examined, I should send the case back to the master, to enable him to produce and examine the witnesses, if the expense of such a proceeding would not exceed the difference between their estimate, of the injury done by cutting the wood and timber, and the estimate of the complainant’s witnesses. From that testimony the injury sustained by this breach of the injunction is from one to two hundred dollars. And probably no injustice will be done to the defendant by fixing it at $150; as this part of the fine, when collected, will be applied towards the satisfaction of the judgment upon which the complainant’s bill is founded. The fine to be imposed upon the defendant, for the several breaches of the injunction of which he has been guilty, must be $159,50, with the taxable costs of these proceedings added thereto. And the defendant must be committed until the fine is paid : that part of the same which is for the costs being paid to the complainant’s solicitor, and the residue being brought into court to abide the event of this suit, and to be paid over to the complainant, in part satisfaction of his debt and costs, if he succeeds in obtaining a decree against the defendant.


source: Caselaw Access Project

author: The Chancellor.

license: Public Domain

text:
    Clark & Willoughby vs. Clark and others.
    Where upon an appeal to the court for the correction of errors, from a decree of the court of chancery directing the payment of money, the appeal bond, through inadvertence, was defective in the condition thereof, so as not to operate as a stay of proceedings upon the decree, and in consequence there, of an execution was taken out and levied upon the property of the appellants before they had time to get the appeal bond amended in pursuance of a permission of the court to that effect; the court of chancery ordered the proceedings upon the execution to be stayed, upon filing the amended bond with sufficient security; and that the excution be superseded upon payment of the sheriff’s fees thereon.
    Where the amount of the penalty of an appeal bond is very large, the officer who approves the same is authorized to receive more than two persons as sureties; and it is not necessary that each of the sureties should justify in double the penalty of the bond, provided the amounts in which they can each severally justify arc equal, in the aggregate, to two sureties who are worth double the penalty of the bond.
    But the approving officer is not authorized to split up the justification of the sureties in an ordinary appeal bond of $250, or in a bond the penalty of which is less than $1000.

      July 2.
    This was an application on the part of the appellants to stay the proceedings on the execution in this cause until the decision of the court for the correction of errors, upon their appeal from the decree of this court affirming the decree and sentence of the surrogate. The amount decreed to be paid by the appellants, including costs, was about $1-8,756, and the appeal bond was in the penalty of $38,500, with three sureties, one of whom justified in the sum of $84^000,, and the other two in $40,000 each. By inadvertence, the bond was defective in the condition thereof, which defect the appellants obtained leave to amend, without prejudice to the right of the respondents to proceed upon their decree until such appeal should be perfected by the amendment of the bond. The bond was afterwards amended, but in the meantime an execution had been taken out and: levied upon the property of the appellants; and they asked to set aside the execution as well as to stay the- proceedings of the respondents.

      W. Kent, for the appellants,

      J. Rhoades, for the respondents.
   The Chancellor.

I think the injuction master was-right in approving of the appeal bond, although but one of the sureties justified in double the amount of the penalty of the appeal bond. The statute requires a bond in double the amount of the debt and costs decreed, in addition to the $250 as security for the costs on the appeal, in order to make the appeal a stay of proceedings; and the appellants must give two or more sureties who can justify in double the penalty of the bond. But where the penalty of the bond is very large, as in this case, I think it is a proper exercise of discretion, in the approving officer, to receive more than two persons as sureties; provided the amounts in which they can severally justify are equal in the aggregate to two sureties who are each worth double the penalty. This appears to be the practice in England in relation to special bail, where the sum is large, (Forrest’s Rep. 138; Wightwick, 110 ; 1 Chitty's Rep. 601;) though to guard against abuses, the recent rules of the English courts require a previous order of the court, or of a judge at chambers, to authorize more than two special bail. (See 2 Cromp. & Jerv. Rep. 173.) It certainly would be improper to split up the justification of sureties in the ordinary bond of $250, for the costs of an appeal. But where the penalty of the bond is $1000 or more, the officer who approves the bond ought not to deprive the appellant of his right to a stay of proceedings pending the appeal, by requiring each surety to justify in double the amount; where three or more sureties can be obtained, who will be able to justify in sums which, in the aggregate, will be equal to two sureties in double the penalty of the bond.

The bond in this case, as now amended, and the justification of the sureties, is therefore sufficient and regular; and if it had been perfected before the issuing and levy of the execution, it would have operated as a stay of proceedings; and would have superseded the execution, as a matter of course, without any application to this court for the purpose. In analogy to the proceedings upon a writ of error, where security is given after the levy of an execution and before it is fully executed, (2 R. S. 596, § 29,30,) I am also inclined to think the appellants are, as a matter of right, entitled to an order, to stay the further execution of the process, which had been previously issued, to enforce the performance of the decree of this court in the present case. At least it is a case in which the court, in the exercise of its discretion, may direct the proceedings upon the execution to be stayed, until the decision of the court for the correction of errors upon the appeal. The execution, however, ought not to be set aside, so as to discharge the lien thereof upon the goods of the appellants which have been levied on by the sheriff, except upon the terms of paying the fees of the sheriff upon the execution.

An order must, therefore, be entered to stay all further proceedings on the execution until the further order of this court; and as the respondents have now ample security for their debt and costs if the decree appealed from shall be affirmed, the order may further direct that the execution be actually superseded, and that the sheriff restore to the appellants the property levied on, upon payment of his fees upon the execution. But as the application to set aside the execution, unconditionally, was improper and cannot be granted, that part of the motion must be denied, with $12 costs.


text:
    Parmelee vs. Egan and others.
    Where M. & A. made a fraudulent sale of their goods to E. for the purpose of defrauding their creditors, and E. gave them a judgment for the purchase money, upon which judgment an execution was taken ont and levied upon the goods, and the judgment was afterwards assigned to a trustee, in trust to pay certain preferred creditors of M. & A.; and P., who had recovered a judgment against them, and the levy of whose execution upon the goods had been prevented by the fraudulent sale to E., afterwards filed a bill against the parties to the fraud to set aside such sale and to have his execution satisfied out of the property thus sold; which bill purported to be filed in behalf of himself and all the other creditors of M. &. A., and upon which bill the sale to E. was set aside as fraudulent and void; Held, that none of the creditors of M. & A., except those who stood in the same sit. nation as P., by having recovered judgments and issued executions which became liens upon the property, had a right to come in under the decree, or to participate equally with P. in obtaining satisfaction of their debts out of the funds arising from the sale of such goods.
    To entitle creditors to come in under a decree, where the bill was filed by a complainant in behalf of himself and all others, standing in the same situation in reference to the fund to be reached by the decree, such creditors must be so circumstanced that they could themselves have filed a similar bill.
    July 16.
    This cause came before the court upon the master’s report and upon the equity reserved in a former decree. The complainant Parmelee, who sued in behalf of himself and other creditors of the defendants M. & A. Egan, was the assignee of a judgment against them, and had issued an execution thereon to the sheriff of New-York ; the collection of which execution was defeated by a fraudulent sale of their goods to the defendant K.Egan. The latter gave them a judgment for the purchase money, which judgment they assigned to the defendant Purcell, in trust, to pay certain preferred creditors, and to distribute the residue rateably among other creditors. The vice chancellor declared, and decreed the sale of the goods to K. Egan fraudulent, as against the creditors of M. & A. Egan; and that the complainant was entitled to be paid his judgment out of the proceeds of the sale of the goods, upon the execution which had been issued on the judgment against K. Egan. lie also directed a reference to ascertain the amount due the complainant on his judgment, and the amount due to other judgment creditors who had agreed to come in under the decree and contribute to the expenses of the suit, and also the amount of the fund arising from the sale of the goods on the execution against K. Egan. From this decree the defendants appealed to the chancellor, who affirmed the decree; but without expressing any opinion as to the rights of other judgment creditors of Mi & A. Egan, who had not placed themselves in the same situation as the complainant by issuing an execution which would have reached the goods had it not been for the fraudulent transfer. The master reported the fund in the hands of the sheriff to be #1068,54; and that there was due on the complainant’s judgment the 11th of April, 1836, the date of the report, #376,87. He also reported that there was due to H. H. Leeds #1357,24, and to Wells & Nichols #1122,98, on judgments against M. & A. Egan ; and that those judgment creditors, by a stipulation with the complainant shortly after the filing of his bill agreed to come in and contribute to the expenses of this suit. It did not, however, appear from the report that either of the creditors, who thus claimed to come in under the decree, had issued executions on their judgments, so as to place them in a situation to claim a lien upon the goods fraudulently sold to K. Egan.

      N. B. Blunt, for the complainant.
    The complainant Parmelee is entitled to his costs from the fund. It is a well established rule of this court, that where a creditor recovers a debt here be recovers costs also; unless special and strong reasons to the contrary intervene. (1 Hopk. 344.) The other judgment creditors are entitled to the surplus of the fund after the payment of complainants’ debt and costs.

      It is well settled, that a judgment creditor may file a bill in behalf of himself and other creditors. (2 John. Ch. R. 283.) And though by his superior legal diligence, a judicial preference has been established in behalf of this complainant, which preference will be preserved in the distribution of the assets; yet as to the surplus, if there should be any, the other creditors are entitled to be paid out of it, pari passu. (4 John. Ch. R. 687. 10 John. R. 507. 2 Paige’s Rep. 567.)

      C. O’Conner, for the defendant Purcell.
    According to the decision of the court for the correction of errors in Grover v. Walkeman, Purcell is entitled to his costs out of this fund. The several decisions made in this cause, and the principles of law and equity which have been applied to if, place Parmelee and the other creditors on entirely different footings. Purcell is a bona fide possessor of the fund for honest purposes. Parmelee has prevailed, upon the principle that a party whose execution at law is defeated, by fraud, as to goods which were bound by his execution, has a lien, in equity, upon the proceeds of such goods; which principle does not apply to a creditor who did not obtain a judgment until after a bona fide and unimpeachable disposition had been made of the property. The other creditors in this case being mere creditors at large, without judgments, could not themselves have filed a bill in this court to reach the assets of their debtor; nor can they attach themselves in this way to the bill of another creditor. A creditor at large, who finds that his debtor has fraudulently made away with his property and taken a judgment from the fraudulent vendee, may legally obtain the control of that judgment and use it to extort payment of his demand from such vendee. And a creditor who subsequently obtains a judgment, and files a bill in equity cannot obtain a preference over him. Before the creditors now claiming had obtained any judgment or execution, the property had been sold under the execution against K, Egan. The title of the purchasers could not therefore be impeached, nor could the goods be pursued into their hands. (Simms v.
      Slocum, 3 Cranch, 307.) The proceeds of that sale are now in the hands of Purcell, or his agent the sheriff. The statute of frauds is not construed, as between creditors contending for a preference, in the same manner as between creditors and the fraudulent assignee. (Sands v. Codwise, 4 John. R. 559.) No matter how many fraudulent transfers a debtor may have made, if the last transfer carries the property into the hands of a bona fide creditor, in payment of an honest debt, neither the statute of frauds nor any principle of equity can divest the title of such creditor; unless a prior lien had been acquired. The case of Codwise v. Sands, before referred to, is a direct authority for this proposition.
   The Chancellor.

The former decree in this cause settled the rights of the complainant to the payment of his debt out of the fund in the hands of the sheriff The only question therefore in which he is interested, is the question of costs. As the three Egans were all concerned in the fraudulent transfer of the property, for the purpose of delaying and hindering the complainant in the payment of his debt, it follows of course that he is entitled to costs against them ; and if those costs cannot be collected of them, he is entitled to the amount thereof to be paid out of the fund in the hands of the sheriff.

The other questions in the cause, and which were reserved in the decree of the vice chancellor, relate to the residue of the fund after paying the complainant’s debt and costs. These are questions between Purcell, the assignee of the judgment against K. Egan, and the two creditors who came in before the master, to prove their claims against M. .& A. Egan, under the decree. And if those creditors stand in the same situation, in regard to this fund, as the complainant does, they are unquestionably entitled to be paid out of the same rateably with him ; or rather to be paid, out of the fund, according to the priorities of their respective executions, as a lien upon the property, of the debtors, which was sold for the purpose of defrauding them. But to entitle creditors to come in under a decree, upon a bill filed by a complainant in behalf of himself and other creditors, standing in the same situation in reference to the fund to be created by the decree, they must be so circumstanced that they could have filed a similar bill themselves. Thus if the complainant’s right to set aside a sale, of persona] estate, as fraudulent against him, as a creditor, depends upon the fact that he has issued an execution which could not be levied in consequence of the pretended sale, another creditor, who claims to come in under the decree, must show that he also has taken out an execution, which could not be levied upon the property for a similar reason. Here Leeds, and Wells & Nichols, who have come in to prove their debts under this decree, although they have recovered judgments against the defendants M. & A. Egan, do not show that they had taken out executions on those judgments, previous to the assignment of the judgment against K, Egan to Purcell, to pay other creditors who had equal equity with themselves to be paid out of the proceeds of the property. Whether any execution was ever issued upon either of those judgments is very doubtful; but it is certain none was issued previous to the assignment to Purcell, for the benefit of the creditors of M. & A. Egan, as neither of the judgments had been obtained at that time. The holders of those judgments are not therefore authorized to come in under the decree in this suit to claim the fund to the exclusion of other creditors.

The injunction must be dissolved so far as to permit the sheriff to pay over the surplus in his hands to the assignee, after satisfying the complainant’s debt and costs, for the benefit of whoever may be entitled to the same ; but without prejudice to the rights of those who have sought to come in under the decree, or the rights of any other creditors of M. & A. Egan in any future litigation respecting such surplus.

Decree accordingly.