Kelley v. Cowing — 4 Hill & Den. 266

Majority

p. 266

Kelley & Marcy vs. Cowing.

Headnote

In general, courts of law will not lend their aid in enforcing injunctions from chan, eery; nor will they ordinarily take any notice of such writs, in the course of proceedings at law. Per Nelson, Ch. J.

H. having made a voluntary assignment of all his effects for the benefit of credi. tors, an injunction was obtained on a bill filed against him and the assignees restraining them from collecting or receiving any debts due to H.; after which, C., with full knowledge of the injunction, paid to the assignees the amount of a note given them for an account which H. had against him. Held, in an action on the note by one to whom it was transferred after it became due, that the pay. ment to the assignees constituted a good defence.

p. 267

Assumpsit, on a promissory note for $554,05, dated April 1st, 1837, payable to John Lay, Jr., Morris Butler and A. II. Patterson, assignees of Hempsted & Keeler, or order, four months from date. The note was endorsed by the payees to D. Tillinghast, who afterwards endorsed it in blank. The defence was payment. The cause was referred to a sole referee, and, on the hearing before him, the facts proved were as follows : On the 28th of March, 1837, Hempsted & Keeler executed to Lay, Butler and Patterson, a voluntary assignment of all their effects for the benefit of creditors. Among the effects so assigned was an account against the defendant, for which the note in question was given. On the 4th of August, 1837, one Barnum filed a creditor’s bill in the court of chancery against Hempsted & Keeler and their assignees \ whereupon an injunction was issued restraining them from collecting or receiving the debts due H. & K. In September following, after the service of the injunction, the defendant paid to the assignees the amount due on the note in question; but they refused to deliver it up, alleging that the injunction restrained them from parting with it. The money received of the defendant was paid to the Clinton Bank in satisfaction of a judgment in its favor against Hempsted & Keeler. Barnum’s judgment against Hempsted &' Keeler amounted to $610,68 •, and the receiver appointed in the chancery suit [D. TillinghastJ collected over $1200, for which he had not yet accounted. A decree was finally obtained in the- chancery suit, setting aside the assignment as fraudulent. On the 25th of July, 1838, another bill was filed by one Niles against the same parties, and a common receiver appointed for both suits. This last receiver sold the note in question to one Masten for $20, and he transferred it to the plaintiffs. The referee reported in favor of the plaintiffs, and the defendant now moved to set aside the report.

--, for the defendant.

J. G. Masten, for the plaintiffs.

p. 268

By the Court,

The only question in the case is, whether the payment of the note is to be regarded as having been made by tlm defendant in his own wrong, by reason of the injunction restraining the payees from collecting or receiving the debts due Hempsted & Keeler.

It is a general rule, that courts of law will not lend their aid to enforce injunctions from chancery j nor do they ordinarily take any notice of such writs in the course of proceedings in suits at law. The case of Burt v. Mapes, ( 1 Hill, 649 ,) is an authority to show that, if the payees of the note in question had instituted a suit in this court against the defendant, we should not have received the facts now set up to avoid the ef: feet of the payment, in bar of the action ; and I do not see, therefore, how we can consistently say that payment was not well made. We should have allowed the plaintiffs to go on with the suit, and left the court of chancery to deal with them as it saw fit, under the particular circumstances of the case. That court might have excused the act and overlooked the breach of its process ; at all events, we do not assume the office of determining what shall or shall not be the effect or consequences of such a breach of its process. It is enough that the court of chancery possesses ample power to punish any unwarrantable interference with or violation of its mandates, and does not need the aid of this court. The aggrieved party has yet an opportunity to reach the assignees, and may be remunerated for all his damages by the infliction of proper fines, if the case be one which, in the ordinary course of proceedings and in the exercise of a sound discretion, would be regarded as demanding the interference of the court of chancery.

In Booth v. Booth, (1 Salk. 322, 6 Mod. 288, S. C.,) the court set aside an execution which had been issued after the expiration of a year without a scire facias ; and this, though the plaintiff had been tied up by an injunction issued on the defendant’s application. The court said they could not take notice of chancery injunctions. In Mitchel v. Cue, (2 Burr.

p. 269

660,) the judges refused to set aside an execution, under like circumstances ; not, however, on the ground that the court was hound to notice the injunction, but for the reason that the party should not be allowed to take advantage of his own act in delaying the plaintiff. In Gorton v. Dyson, (1 Brod. Sf Bing. 219,) the court entertained the argument of a cause, notwithstanding an injunction in the court of exchequer against all further proceedings in the C. B. And I observe also that, in Franklin v. Thomas, (3 Meriv. 234,) it was said to have been the opinion of Lord Thurlow, that where an injunction is obtained, even after execution levied, though it is a breach of it for the party to call upon the sheriff to pay over the money, yet, if he voluntarily pay, it is no breach of the injunction to receive it. Lord Eldon thought that, in such a case, the person receiving the money would be ordered to pay it into court. In the case before us, the defendant was not made a party, nor was he enjoined ; and it would seem from the doctrine of Lord Thurlow, that the payment by the defendant would, even in the court of chancery, be a discharge of the debt. Much more must it be so regarded in a court of law.

Unless we are bound by some settled principles of law to take notice of this injunction, (and I think we are not,) it will certainly lead to a more just and equitable arrangement in respect to all parties concerned, for the plaintiffs to appeal to the tribunal whose process has been disregarded. It seems that this money has been in fact applied in payment of a debt due from Hempsted & Keeler, to whose estate the note belonged ; and if the defendant should now be held accountable for the money, this consideration might go to mitigate his loss. Again : possibly the court of chancery would be disposed to follow out the idea of Lord Eldon, and call upon the Clinton Bank for the whole or a part of the money. The powers of that court over all the parties concerned in the payment and receipt of the money upon the note in question, are much more ample and extensive than those possessed by courts of law.

p. 270

In the exercise of those powers, the former court would be enabled to bring out a more full developement of the circumstances connected with the whole matter than can possibly be done here. It might, perhaps, regard the trifling sum for which the note was sold by the receiver. These considerations should induce us to leave the question of a breach of the in junction, and its effect, to the exclusive cognizance of the court of chancery.

I am of opinion, therefore, as well upon the fitness and pro piiety of the thing, as upon authority, that we cannot take no tice of the injunction, and, consequently, that a valid' payment of the note was established. The report of the referee must be set aside ; costs to abide the event.

Ordered accordingly.