Hyperlawhypertext legal databasebeta Carter v. Clarke 30 N.Y. Super. Ct. 490

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Carter v. Clarke

30 N.Y. Super. Ct. 490 7 Rob. 490 Court N.Y. Super. Ct. Decision date 1868-12-31 English

Delivered by *496 Robertson, Ch. J.

Contents

Majority

p. 490
Charles Carter, plaintiff and appellant, vs. Andrew Clarke, defendant and respondent.

Headnote

1. An appeal does not lie to the general term of this court from the decision of a judge overruling questions put to the defendant, a judgment debtor, on his examination in proceedings supplementary to execution. That is entirely a proceeding before a judge, and not before a court.
2. The right of discovery or examination in supplementary proceedings is merely auxiliary to the right of relief, and the first proceeding or action must be terminated by a decree or order on the merits, before it can become res judicata that the defendant had no property when it was commenced.
3. An agreement to discontinue an action in equity, even after a defendant had put in an answer making a discovery, could never have been available to prevent the requiring a similar answer in a new action. And the same rule should prevail as to examinations in supplementary proceedings.
3. An order was formally entered, in supplementary proceedings, as at special term, declaring that the examination of the defendant should “ be confined to the fact as to whether the defendant had acquired any property, real or personal, since the date of his examination on a former order,” and that all questions put to him, on the examination in question, prior to the date of such former examination were overruled. It appearing that the former proceeding was never terminated by a decision, but was voluntarily abandoned by consent of both parties; Meld that even if such order was an order in an action, the exclusion by it, of the questions w'as improper.
(Before Robertson, Ch. J., and Barbour and Monell, JJ.)
Heard April 6, 1868;
decided December 31, 1868.
Appeal from an order made by Justice Monell, overruling certain questions put to the defendant, a judgment debtor, on his examination in proceedings supplementary to the return of an execution unsatisfied.
On the 13th of August, 1862, the plaintiff recovered a judgment in this court, against the defendant for the sum of |1893.35, damages and costs, and on the same day he filed a transcript of the judgment in the clerk’s office of the city and county of Hew York, and issued an execution upon said judgment to the sheriff of the city and county of Hew York, in whose county the defendant then
p. 491
resided. The execution so issued, was returned wholly unsatisfied. On the 14th day of July, 1864, the plaintiff applied to a justice of this court for, and obtained, an •order requiring the defendant to submit to an examination in respect to his property. On the 2d day of August, 1864, the defendant appeared before said justice, and submitted to an examination, which examination was reduced to writing, signed by the judgment debtor, and sworn to before said justice, and the proceedings adjourned until the 9th of August, 1864. On the 9th of August, 1864, the proceedings were, by consent of parties, discontinued, without costs to either party.
On the 1st October, 1867, the plaintiff applied to Justice Garvix for, and obtained, a second order, requiring the defendant to appear and be examined as a judgment debtor concerning his property. The affidavit upon which the second order was founded did not state the previous proceedings against the judgment debtor, or any facts or circumstances to warrant the presumption that the debtor had, since the date of the first examination, acquired any property. On the return of the second order, the judgment debtor appeared and moved to dismiss the second proceedings, on the ground that the affidavit was insufficient, in not setting out any facts or circumstances to warrant the presumption that the debtor had acquired any property since the date of the first examination, which . motion was founded upon an affidavit of' the judgment debtor. The motion was denied by Justice Barbour, and an order was made by him requiring the examination of the defendant to proceed. The defendant again appeared, was sworn, and his examination was proceeded with. In the course of the examination, it was sought to inquire of the defendant in respect to the disposition and ownership of property, alleged to have been owned and disposed of by the judgment debtor, prior to the date of the first
p. 492
examination in 1864. This was objected to by the judgment debtor, upon the ground that the second examination upon the second order must be confined to the fact as to whether the judgment debtor had acquired any property,' real or personal, since the date of the first examination. The objection was sustained by the justice, and this appeal is from the order made by him sustaining such objection.
The only question thus presented by this appeal was: Can the judgment creditor, on a second proceeding, go behind the examination of the judgment debtor upon the first order, and inquire into the ownership of property by the debtor, and the disposition of the same by him prior to the first examination, or whether he is to be confined to an examination of the judgment debtor in respect to property acquired since the date of the examination of the debtor, under the first order.
Vine Wright Kingsley, for the plaintiff, appellant.
I. - The order of the 20th of November settled the question of the plaintiff’s right to examine said defendant, under the second order granted, and from which the defendant made no appeal; so there is no question upon this appeal except as to the order, duly entered 9th January, as to whether the plaintiff must be confined to the fact whether the defendant has acquired any property since the first examination, the 2d August, 1864. This order tends to nullify this proceeding as a remedy to satisfy judgments. The courts of law and equity becoming united, this remedy was provided for all cases, in lieu of the old court of chancery practice, authorized by the Revised Statutes. The creditors’ bill was to compel the discovery of debtors’ property that could not be reached by execution at law. (Goodall v. Demarest, 2 Hilt. 534. 10 Bosw. 591 . 2 Abb. Pr. 457 . 2 Barb. Ch. Pr. 148.
p. 493
2 Rev. Stat. 173.) The object of this proceeding, under the Code, is to enable a creditor to ascertain whether the judgment debtor has any property out of which the judgment can be satisfied, whether in his possession or under his control, or in the possession or under the control of another person. This proceeding is to carry into effect the judgments of the courts. This proceeding is more exhaustive, and has more scope, than the creditors’ bill of this state.
II. The Code provides that the plaintiff shall be entitled to such examination of the defendant, when certain specified conditions shall have been complied with; and thereupon said defendant “ must appear and answer concerning his property.” "When an execution against property of the judgment debtor has been duly issued, and is returned unsatisfied, in whole or in part, said creditor “ is entitled to an order,” from a judge of the court, “requiring such judgment debtor to appear and answer concerning his property,” &c.
1. This right is unqualified, and cannot be taken away from a creditor, and the only limitation of its exercise is as to the imposition of costs upon the plaintiff, where the circumstances of the case do not warrant the proceeding. This is the only restriction imposed by the Code, and is the sole restriction upon the plaintiff, under this proceeding.
2. But where the order is obtained, and the defendant appears, he must answer as to all his property.
3. To hold that a prior examination is a bar to all inquiry as to property of the defendant, held or transferred at that date, is to defeat the efficacy of this procedure, protect fraudulent debtors, and render judgments useless in such cases. The courts should rather help than deny creditors their rights against debtors. (Leroy v. Halsey, 1 Duer, 589 . Heroy v. Gibson, 10 Bosw. 591 .)
p. 494
III. This court holds that if no property be discovered, the plaintiff will be ordered to pay costs to the debtor, unless some good reason appear for requiring the examination. ’ This principle would operate harshly upon the plaintiff, where he is restricted in his examination as to the defendant’s property, under a second order. The defendant is not harmed by a full examination. He suffers little inconvenience by a full examination, where he is an honest debtor, and does not conceal his property. Every consideration of right and policy demands that all examinations, as to property, be conducted in the same manner, whenever allowed by the court. ( 3 Sandf. 725 .)
TV". In proceedings supplementary, under section 292, the creditor may examine the judgment debtor, and any other person fully, in regard to the circumstances attending the transfer and disposition of his property, and is so entitled to a discovery as to its good faith or' its fraudulent character. (Laws of 1863, 661, ch. 392. Town v. Safeguard Ins. Co., 4 Bosw. 683 . Clapp v. Lathrop, 23 How. Pr. 423 . Hall v. McMahon, 10 Abb. Pr. 103 . 1 Duer, 591 . 1 Barb. Ch. Pr. 316. 26 How. Pr. 155 .)
' V. This, examination neither discloses the extent of the defendant’s property nor the circumstances of the alleged transfer to the defendant’s wife, by which she still holds a large and valuable property, both real and personal, of the value of some $20,000 and upwards.
VI. This proceeding, under the Code, is not only to compel a discovery of the debtor’s property, but to require its application to the payment of the judgment of some $1900, and interest for six years, in this action. (Bank of Genesee v. Spencer, 15 How. Pr. 412 . Dresser v. Van Pelt, id. 19. Gould v. Torrance, 19 id. 560. Hall v. McMahon, 10 Abb. Pr. 103 .) This procedure is a part of the action, an equitable remedy to which the creditor may resort to enforce the judgment.
p. 495
1. The Code' provides that no person shall, on examination, pursuant to this chapter, be excused from answering any question, on the ground that his examination will tend to convict him of the commission of a fraud, but his answer shall not be used as evidence against him in any criminal proceeding.
2. Bor shall he be excused from answering any question, on the ground that he has, before the examination, executed any conveyance, assignment, or transfer of his property, for any purpose, but his answer shall not be used as evidence against him in any criminal proceeding or prosecution. . (Clapp v. Lathrop, 23 How. Pr. 423 . Lynch v. Johnson, 46 Barb. 56 .)
3. The defendant has not thus answered in this exami- . nation, as the Code provides he shall, and refuses to answer as to his property, as to the transfer thereof, or for what purpose he had made the alleged transfer; and declines to disclose the circumstances of said sale, which constituted fraud upon this plaintiff, and which delays and hinders the collection of this debt.
Frederich Smyth, for the defendant, respondent.
I. "The decision of the justice was correct. There must be some limit to these proceedings, and the defendant having been once fully examined, cannot be harassed by innumerable examinations. (Goodall v. Demarest, 2 Hilt. 534.) The practice of this court in these proceedings, is in conformity with the decision of Judge Brady in the above cited case.
II. If it is claimed that the judge, before whom the examination was had, has a discretionary power to limit the examination, the order is not appealable, and the appeal should, therefore, be dismissed.

This purports to be an appeal from an order at special term, or “ from so much of it as prevents and restrains the plaintiff from examining into the property of the defendant fully, in a proceeding supple- ' mentary to execution.” An order was formally entered as at special term, upon such supplementary proceeding, declaring that the examination of the defendant, under the order obtained therein, should “ be confined to the fact as to whether the defendant had acquired any property, real or personal, since the date of his examination on a former order,” and that all questions put to him on the examination in question prior to the date of such former examination (August 2, 1864,) were overruled.

Were the order appealed from an order in an action, I should be inclined to believe that the exclusion of the questions was improper, because the former proceeding was never terminated by a decision, but was voluntarily abandoned by consent of both parties. Supplementary proceedings perform the office of bills in equity, to reach the property of a debtor, not tangible at law, or after a remedy by execution has failed. The right of discovery or examination is merely auxiliary to the right of relief, and the first proceeding or action must be terminated by a decree or order on the merits before it can become res judicata that the defendant had no property when it was commenced. An agreement to discontinue an action in equity, even after a defendant has put in an answer making discovery, could never have been available to prevent the requiring a similar answer in a new action. • And the same rule should prevail as to- examinations on supplementary proceedings.

• But I do not see how an appeal can be brought to the general term of this court from the exclusion by a judge before whom the examination was taken, of any questions.

p. 497
It is entirely a proceeding before a judge, and not before a court, (Davis v. Turner, 4 How. 190 ; Miller v. Rossman, 15 id. 10; Bitting v. Vandenburgh, 17 id. 80) although entitling an order made by him as being at special term does not make it void. (Dresser v. Van Pelt, 15 How. 19 .) A mere voluntary appearance to be examined confers no jurisdiction. (Sacket v. Newton, 10 id. 561. A county judge, judge of the court of common pleas of this county, or of the Supreme Court, has precisely the same jurisdiction and power in case of a judgment in this court, as a justice thereof, (Code of Procedure, § 292, subd. 2 ;) except that a county judge cannot adjourn the examination at all. (People v. Huber, 1 Code R. N. S. 75.) Jurisdiction is only acquired by an affidavit containing the proper allegations. (Whitlock’s case, 1 Abb. 320 . Lindsay v. Sherman, 1 Code R., N. S. 25. Hough v. Koblen, Id. 232.) The order must comply with the statute, or it is irregular. (Dresser v. Van Pelt, ubi sup. Hobart v. Frost, 5 Duer, 672 . 3 Abb. 120 . Hersenheim v. Hooper, 1 Duer, 594 . Wilson v. Andrews, 9 How. 39 . Arctic Ins. Co. v. Hicks, 7 Abb. 204 .) Jurisdiction is lost by a failure to continue the proceedings by regular adjournments. (Squire v. Young, 1 Bosw. 690 .) Such authority is strictly construed, so as not to embrace corporations who áre debtors. (Hinds v. Canandaigua R. R. Co., 10 How. 487 . Sherwood v. Buffalo R. R. Co., 12 id. 136.)

I do not see, therefore, how this court could resume jurisdiction, if the supposed special term order were reversed. Unless the order were kept alive by adjournments, all jurisdiction is lost, and can only be regained by a new order. Besides, no final order seems to have been made, and I do not understand that an appeal may be taken from every refusal to allow different questions to be put. The proceeding in such case would be too harrassing and oppressive to the judgment debtor. Until such final

p. 498
order is made, the proceeding is not disposed of, and whether the remedy, then, for any error committed in the course of it is by' appeal or certiorari, it is not necessary to decide.

I think the supposed order was not a subject of appeal, and the appeal should be dismissed, without costs.

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