M'Intyre v. Mancius — 16 Johns. 592

Majority

p. 592

Archibald M'Intyre, George A. M‘Leish, Daniel Crieghton and John M‘Intyre, Appellants, against George W. Mancius and James Brown, Respondents.

Headnote

& court of chanceryisanciliary to^the in compelling facts',^aida cutiiígmor1‘derightslt law! comper‘a d°.fendant te d¡s-which if he an! ¿Ermatíve, him to pnmsh- or render him infamous, or expose him to a penalty.

A bill of discovery ought to state the matter relative to which the discovery is sought, the interest of the party, and the right of the plaintiff to a discovery, so far as to enable the court to see that the ends of* justice require the,interposition of its powers; and where the facts sought to be discovered are to be used as evidence at law, they should be so far stated as to show their pertinency and

Where a bill of discovery stated, that the plaintiffs endorsed a promissory note drawn by D. for a certain sum mentioned, payable to the plaintiffs, or order, which note was immediately thereafter delivered by D. to AT., who became the sole proprietor thereof; that /?., a clerk of M., was a material witness for the plaintiffs, as they are advised by counsel, and verily believe, on the trial of any suit at law against them on the note, against which they have, as advised, &c., a good and substantial defence on the merits,* and that M. & B. confederating, &c. to deprive the plaintiffs of the benefit of B’$ testimony, and to prevent them from establishing their defence against the note, &c., have brought a suit at law on the note against the plaintiffs, in the names of both M. & B., as endorsees : and the bill charged, that the note was transferred, by D. to M, solely, and who alone paid the consideration, if any, lor the transfer; and that if B. has now any interest in the note, it has been acquired since the suit was commenced, and if before, it was colourable merely, and for the express purpose of making B. a party to the suit at law, so as to deprive the plaintiffs of the benefit of his testimony, &c., praying a disovery as to the matters so stated,\nd to which the defendants, M, & B., were specially interrogated, and to which bill'there was a d&murrer: Held, that the demur* x;er was not well taken, b„ut that the defendants ought to be compelled to answer.

THIS was an appeal from the Court of Chancery.

i - . The appellants, on the 29th of July, 1817, tiled their bill against the respondents, stating, that on the 30th of September, 1816, they indorsed in blank, a certain promissory note, drawn and signed by Daniel Dow and William Men-' z^es>1Tl the name and firm of “ Dow Menzies,” payable to the appellants or their order, at the bank of Nezu-York, for 4?Q00 dollars; which note was immediately thereafter delivered by Dow fy- Menzies, or one of them, to the respondent, George W, Mancius, who then became the endorsee and proprietor thereof. That at the time the said note fell

p. 593

dde, Dow <$>• Menzies had become insolvent, and have been fever since, and still are unable to pay the amount claimed on the note, in consequence whereof, the appellants will be compelled to pay the whole amount thereof, if payment should be ultimately enforced. That at the time of the transfer of the note, the same became the sole property of Mancius, and has ever since continued to be his sole property : that he has never transferred or sold the property of the note, nor any interest therein, to the respondent, James Brown, nor to any other person, unless it be with the fraudulent design hereafter mentioned. That the appellants have a good and substantial defence on the merits against the recovery of the moneys demanded on the note, as they are advised by their counsel, and verily believe. That the respondent, Brown, (a clerk of Mancius,) as the appellants are advised by their counsel, and verily believe, would be an important and materia] witness for them, on the trial of any suit brought for the recovery of the moneys claimed on the said note. That Mancius, in order to deprive the appellants of the testimony of Brown, and thereby prevent them from establishing their defence against the recovery of the monies claimed on the note, has caused a suit to be commenced against the appellants, as the endorsers of the note, in the Supreme Court, in the names of the respondents, as plaintiffs, claiming to be the endorsees of the said note, and the joint owners thereof, which suit is at issue. That the consideration, if any, for which the note was transferred, was paid solely by Mancius-, that Brown paid no part thereof, and had no interest therein, but the note was transferred solely to Man? cius, who was the only person interested therein. That Mancius has never sold to Brown any interest or share in the note and the moneys claimed thereon, but that M. is still the sole owner and proprietor of the note, and that if M. has ever sold or \transferred to Brown any interest or share in the note and the monies claimed thereon, it was after the commencement of the suit before mentioned, and whether before or after, the same -was only colourable and made with the design and intention and for the express purpose of making Brown a parly to the suit, so that the appellants could not Jiave it in their power to make use of him as a witness, and

p. 594

to deprive them of the benefit of his testimony, which Man cius well knew would be important and material to them, and that the said suit is brought for the sole benefit and advantage of Mandus. The bill stated, that, the appellants cannot diSCOver the truth except bp the answer of the respondents, and sought a discovery, by special interrogatories, as to all the foregoing matters, and prayed an injunction to stay the suit at law, and process to appear and answer. To this bill the respondents having appeared, filed their joint and several demurrer, assigning for causes of demurrer,j that the appellants in their bill did not set forth the nature of their defence to the suit at law, and that the bill does not show that the discovery sought is necessary, or would be useful for their defence to the said suit.

A petition was presented by the appellants to the Court of Chancery, at the last September term, for an injunction to stay proceedings in the suit at law, which was denied with costs. (Vide 3 Johns. Ch. Rep. 45 .)

The demurrer was set down for argument and brought to a hearing in November, 1818, when his honour the Chancellor decreed, that the appellants’ bill should be dismissed, with costs.

From this decree the appellants appealed to this court. His Honour the Chancellor assigned the reasons for the de-. cree, which were the same as those given on the motion for an injunction in the same cause. (Vide 3 Ch. Rep. 45. 47.)

For the appellants it was contended, that the decree ought to be reversed :

1. Because the law did not require from the appellants a disclosure of the particular ground of defence on which they intended to rely at law.

2. Because the bill in this case states sufficient to show the pertinency and materiality of the disclosure it seeks for.

3. Because the discovery being obtained at the expense of the appellants, and it being principally for another tribunal to judge of its materiality, the bill should not have been dismissed, unless it had appeared upon the face of it, that the discovery sought for was “ obviously frivolous or merely impertinent,” which cannot be contended.

p. 595

4. Because the discovery prayed for' would be material to the appellants, on their trial at law, in many respects.

The respondents insisted that the decree ought to be affirmed:

1. Because the bill does not sufficiently state the nature of the defence of the appellants to the suit at law.

2. Because the discovery sought for may lead to a forfeiture.

3. Because, admitting that B. having n® interest, and not being exposed to any forfeiture, is bound to answer; yet M.t since the discovery as to him may lead to a forfeiture, is protected from answering: and the bill being for discovery merely, in aid of a defence at law, and not for relief, B’s answer, admitting the facts, would be immaterial and nugatory.

4. Because M. and B. were charged with a conspiracy.

5. Because B. is charged with maintenance.

Van Burén,

(Attorney General,) and T. A. Emmet, for the plaintiff. The demurrer admits that Brown is a mere nominal party, and without any interest in the suit in the Supreme Court; and that he was made a party for the express purpose of depriving the appellants of his testimony.

The chancellor says, the matter sought for by the discovery may be immaterial or frivolous. But it is not lor the court of equity to determine whether the facts discovered could be used, or how, or for what purpose. It is for the court of law to judge of their materiality, when offered in evidence, unless it appear on the face of the bill, that the discovery would be frivolous or impertinent. The discovery sought is at the cost of the plaintiffs. It is competent for a defendant to the suit at law, to show that the plaintiff is a mala fide holder. (Buckland v. Tankard, 5 Term Rep. 678.) It is true that the plaintiff, though a mere trustee, cannot be defeated, if he holds bona fide. But here Brovin is made a plaintiff, for the purposes of fraud and injustice. And whether he is so or not, it is for the court at law to decide. (Conroy v. Warren, 3 Johns. Cas. 259 .) Some of the objections now made, if they had been stated in the court below, might have been obviated, by amending the bill, eo

p. 596

as to exclude any discovery which might involve a forfeiture, or a penalty for maintenance.

The bill states nothing which can lead to the supposition, that the inquiry is for the purpose of enabling the plaintiffs to set up usury as a defence. The suggestion of usury is perfectly gratuitous. A court of chancery will aid a party to perpetuate the testimony of witnesses to establish usury, {Earl of Suffolk v. Green, 1 Aik. 450 .)

The bill does not state any grounds for the allegation of a conspiracy. The bill does not charge maintenance. . B. was not to have any part of the money recovered. It is neither maintenance by the statute, nor at the common law-( 8 Johns. Rep, 228 .)

The counsel cited the following authorities on the subject. 1 Vernon, 109. n. Bird v. Hardwicke, 2 Ves. 493. 1 Aik. 449 . 1 Caines' Cases in Error, 5. 2 Vern. 442, 443. 2 Ves. 450. 8 Ves. jun. 398. 1 Equity Cas. Abr. 76. case 5. 2 Madd. Ch. Rep. 228.

Henry, contra,

insisted, that the party asking a discovery, must disclose explicitly the object and purpose of the discovery, for he has no right to ask it, unless necessary to aid him in his suit at law. ( 1 Johns. Ch. Rep.- 5 . Cooper's Eq. PL 60.) The right of the party to the discovery, and its materiality, must be stated, for the purpose of preventing frivolous bills. (Clifford's PL 52. 155. 1 Maddock's Ch. Rep; ■161.) There is no excuse for the plaintiffs’ not setting out clearly their title and defence. They state that they have a substantial defence; but what is it ? It may be usury, and then they have no right to ask a discovery. The bill charges a fraudulent design in the defendants.

The cases on this point are referred to in Cooper's Eq. Pl. (202, 203, 204, 205, 206, 207.) where the rules are collected, and the distinctions stated. {Mitf. Pl. 149. 157, 158, 1 Madd. Ch. 173. 1 Aik. 539 . 1 Bro. Ch. Rep. 97. 14 Ves. 59. 65. 1 Ves. 246.248. 1 Term Rep. 153. 1 Johns. Ch. Rep. 367 .439. 1 Atki 450.)

A demurrer maybe good as to one defendant, though bad as to another. (Cooper's Eq. PL 113. 8 Ves. jun. 11. 1 Ves. 403, 404.) The bill is for discovery, and not for relief; and if, .as to Brown, the discovery was made, it would

p. 597

not be used against Mancius. (2 Ves. jun. 11. 1 P. Wins. 300. 1 Atk. 232.)

The materiality of the defence must be shown. Cooper's Eq. PI. 199. Bishop of London v. Fytche, 1 East's Rep. 457. n. a.) If we cannot see what the defence is, the materiality cannot be seen.

Again; the bill charges a conspiracy between the respondents to deprive the appellants of the testimony of Brown, and all the pretences set up are leading to that design. A conspiracy to injure individuals is indictable. (Hawk. P. C. ch. 62. s. 2. 8 Mod. 12. 6 Mod. 185. 2 Lord Raym» 1167.)

If it be to suppress evidence, and defeat a defence, it is maintenance. (4 Hawk, P. C. 134.)

The cases in which a discovery may be compelled are, stated by Cooper, (Eq. PI. 157, 158.)

A demurrer admits no fact not well pleaded or set up. (2 Madd. Ch. 338.)

If this were a bill of discovery in the ordinary sense, I should entertain no doubt, but that the demurrer was well founded. It is a bill to discover whether Brown, who is alleged to be a material witness for the appellants, on the trial of a cause pending between these parties in the Supreme Court, has not been made a party colIusively, without having any interest in the subject matter of the suit, and for the purpose of depriving the appellants of the benefit of his testimony. In this view, it is a case of the first impression and novelty, and it must be examined and decided upon general principles, and analogies drawn from, adjudged cases.

As a general rule, a bill of discovery must state the matter in relation to which a discovery is sought, the interest of the party, with the right to require the discovery. The Court of Chancery acts ancillary to the courts of law, in compelling a discovery of facts to aid a party irTprosecuting or defending his rights. But it is a fundamental rule, that it will not compel a defendant to discover that, which, if he answers in the affirmative, will subject him to punishment, or r,ender him infamous, or expose him to a penalty. And if

p. 598

the bill require him to answer to facts of this description, he may demur to it successfully.

Does the bill in this case sufficiently state the appellants’ case, the nature of the defence proposed to be aided by the discovery sought; and will the respondents be exposed to a criminal prosecution or penalty, if they answer the interrogations of the bill affirmatively; and is the discovery material ?

■ The bill states, that the appellants endorsed in blank, a promissory note drawn by Dome <$• Menzies, payable to the appellants, or their order, for 4,000 dollars; that the note was immediately delivered to Mancius, who became the endorsee, and sole proprietor thereof; that Brown, a clerk to Mancius, is, as the appellants are advised by counsel, an,d as they verily believe, an important and material witness for them on the trial of any suit brought on the said note, and that they have a good and substantial defence on the merits against the said note, as they are, also, advised by counsel, and believe; that the respondents, combining and confederating together how to injure the appellants, and how to depriye them of the testimony of Brown, and prevent the appellants from establishing their defence against the said note, have commenced a suit thereon in the Supreme Court, in the names of both the respondents as endorsees, which suit .is at issue ; charging, that the consideration, if any, for which the note was transferred by Dowe Sr Menzies, was paid to them solely by Mancius, and that Brown paid no part thereof, and had no interest therein, and that if Brown has now any interest in the note, it was after the commencement of this suit, or if before, it was colourable and in contemplation of a suit on the note ; and that Browris name was thus used in the said suit, to deprive the appellants of the benefit of his testimony. Of these facts, the bill seeks a discovery, by special interrogations.

To this bill, the respondents demurred, and the Chancellor held it to be well taken, on the ground, that the bill showed no right to the discovery; that the object and purpose of the discovery was not disclosed, that it might be useless or frivolous, and that it might enable the appellants to convict the respondents of a crime, or subject them to a forfeiture.

p. 599

Bills of discovery are for the purpose of gaining a knowledge of facts within the privity of the defendant, and the case must be so far disclosed as to enable the court of equity to see, and be satisfied, that the ends of justice require the interposition of its powers; and when the facts attempted to be elicited may be evidence in a court of law, it should be shown, by a statement of the case, that the facts interrogated to would be pertinent, and might be material, and hence, ordinarily, the case must be so far stated as to show the relevancy of the facts intended to be drawn forth.

In the present case, no facts are required to be answered to, which would be evidence in the trial at law; for admitting that Mancius alone paid the consideration for the transfer of the note, and that Brown had no kind of interest in it, this would not defeat the suit at law. It might still be prosecuted in their joint names, and Brown be merely a trustee in part for Mancius. For all the purposes of the discovery sought, the bill is full and ample: The appellants seek to have Brown as a witness for them at Ia\V., on the ground that he has been'wrongfully mac|e a party, without any interest in the suit, and to deprive them oLthe benefit of his testimony ; and in this view, as they ask for no facts to be used as evidence on the trial, it was, I apprehend, stating enough to allege generally, that they had a defence, of which the respondents sought to deprive them, by incapacitating their witness from testifying, by the contrivance of making him a formal party on the record.

The ordinary rules of the court cannot with propriety be applied to a case entirely aside of the common course of proceeding; and in a case of such novelty, the general principles on which discoveries will be granted, can only be regarded ; and those principles ought to be applied to a new case, in furtherance of justice; and it seems to me, that the general principle that a court of equity will aid a court of law in the compelling a discovery of facts material to the. defence of a party, applies with peculiar force to the present case; for we cannot but perceive, that unless Brown be so far disengaged from his present situation, as a party apparently interested in the suit at law, when it is alleged he has no interest m it, that gross injustice is practised,

p. 600

without any other means of detecting or defeating it. In the case of the Bishop of London v, Fytche,( 1 Br. Ch. Rep. 96.) Lord Thurlow said, that case was the first instance of a demurrer for immateriality; and that if the demurrer was to a bill where the matter was obviously frivolous, the court might interfere; and that where a man comes for a discovery of evidence material to his defence, the other party shall not protect himself against the discovery, unless he can show himself liable to penalties. I cite this case, to show, that if the appellants have a right to know whether Brown has an interest in the note, that a court of equity will not undertake to say, that the object of the discovery may be immaterial or frivolous ; and also to show that a court of chancery will not refuse its aid upon the possibility that the discovery sought may render the party liable to penalties.

It was strongly insisted on the argument, that an answer by the respondents in the affirmative to the interrogations of the bill, would subject the respondents to punishments and penalties, for maintenance or a conspiracy. Maintenance is an officious intermeddling in a suit that in no way belongs to one, by assisting either party with money, or otherwise, to prosecute or defend it; or, strictly speaking, it is the assistance of another person in a law suit, without having any privity or concern in the subject. (Wickham v. Conkling, 8 Johns. Rep. 228 .) There does exist a privity between Brown and Mancius, for we cannot intend that Brown’s name is used without his consent, and he cannot incur the penalties of maintenance, for upholding a suit in which he is a party, although nominally so, for by the endorsement of the. note, and the suit by the respondents as endorsees, Brown would acquire a legal title to a moiety of the note, and would be a trustee for Mancius, if he had not paid any part of the consideration money for the transfer.

A confederacy between two or more persons to injure an individual, by an act unlawful or prejudicial to the community, is a conspiracy, and is punishable as such. But the act must be unlawful; and for the reason already given, it is not an unlawful act, punishable as a crime, for a person to become the trustee of another for the collection of a note.

p. 601

It was urged that the discovery sought might be for the purpose of proving by the testimony of Brown, that the note was given on a usurious consideration ; but no part of the bill leads to any such inquiry, and we are not at liberty, on vague conjecture, to presume any such defence. If Brown has been joined as a party to the suit at law, without any interest in the subject, and for the express purpose of depriving the appellants of his evidence, it would, in my opinion, form no objection to the discovery sought for, that Brown might prove the note tobe usurious.

The appellants had an interest in Brown’s testimony, of which he could not deprive them, by any act of his; and as the appellants ask no relief from the Court of Chancery, nor a discovery of usury, but merely seek to untrammel the witness, it is immaterial to the discovery what he would testify. In the case of the Earl of Suffolk v. Green and others, (1 Atk. 449.) a bill was filed to perpetuate the testimony of witnesses, insisting, among other things, that a bond entered into by the plaintiff’s ancestor was on a usurious contract; the defendant demurred, for that the bill sought to subject him to a penalty, and the plaintiff had not offered to pay what was really due. Lord Hardwicke considered the demurrer well taken, as regarded the charge of usury, because it would subject the party to a penalty ; but as to perpetuating the testimony, he held the demurrer to be bad, for the plaintiff was entitled to perpetuate testimony, notwithstanding his not offering to pay what was due; and he said a man may, in many cases, bring a bill to perpetuate testimony, where he cannot bring a bill for relief without waiving the penalty.

In principle, the object of the present bill is analogous to the case decided by Lord Hardwicke. The court there lent its aid to perpetuate testimony to prove usury; and here the ground of the bill is to procure the testimony of a witness made a party for the improper purpose of depriving the appellants of his evidence.

If the facts turn out to be as alleged, that the respondents have made Brown a party, to prevent his being a witness, without his having any interest in the note, it is surely an attempt to pervert and evade justice; and our laws must be

p. 602

deplorably defective, if there be no remedy in such a case. I am fully satisfied that there is a remedy, and that the court c^ancery ought to have entertained the bill, and compelled an answer to it. It has, indeed, been insisted, that if the respondents answer, and admit the facts stated in the bill, that then Brown cannot be made a witness, so long as he remains a party to the record.

I will not anticipate the opinion of the Supreme Court on that point, further than to say, that there must be some method of making Brown a witness, if he has no interest in the suit at law, except what he has acquired after the appellants became entitled to his testimony.

I am of opinion that the decree of the Court of Chancery ought to be reversed.

This being the opinion of the court, (Bowne, Senator, dissenting,) it was, thereupon, ordered, adjudged, and decreed, that the decree of the Court of Chancery be reversed, &c.

Decree of reversal.