1. A party in whose favor judgment is rendered in a common law
cause by a court of the United States sitting in the State of New
York is, in order to reach the property of the judgment debtor,
entitled to the remedy provided by the statute of that state and
known as proceedings supplementary to execution.
2. Section 916 of the Revised Statutes which authorizes, as a
matter of procedure, the resort to that remedy is not in conflict
with the Constitution.
The facts and the statutes bearing upon the question involved
are set out in the opinion of the Court.
MR. JUSTICE MATTHEWS delivered the opinion of the Court.
It is made to appear by this application that a judgment was
recovered in the Circuit Court for the Southern District of New
York in favor of the United States against Robert Boyd, the
petitioner, and Francis O'Rourke, on which execution was issued and
returned unsatisfied, except in the sum of $200, leaving due
thereon $8,128.92. It was thereupon ordered by the court, on motion
of the plaintiff's attorney, that the matter be referred to Joseph
M. Deuel, Esq., a commissioner of the court,
"to examine the said Robert Boyd and Francis O'Rourke and take
answers on oath concerning their property, and to reduce such
answers and examination to writing, and also to examine on oath,
concerning such property, such witnesses as may be offered by the
respective parties, and reduce such examination to writing, and
report such answers and examination, and all his proceedings under
and by virtue of this order, to this
Page 105 U. S. 648
court with all convenient speed, and the said Deuel is hereby
appointed a referee in this action for the purpose aforesaid. And
it is further ordered that the said Robert Boyd and Francis
O'Rourke do appear before the said referee at his office in the
Post Office building, New York City, on the 22d of May, 1879, at
eleven o'clock A.M. to answer before said referee concerning their
property as aforesaid, and for that purpose to appear before the
referee from time to time as he shall direct and appoint."
The petitioner moved the court to vacate this order for
illegality, which motion was denied. Being required to submit to
the examination, he refused to take an oath to testify under said
order, whereupon, on motion of the attorney for the United States,
the circuit court ordered that he be attached and committed to the
custody of the marshal as punishment for a contempt of the court in
so refusing to be sworn. From that imprisonment the petitioner
seeks to be discharged, and to that end prays for a writ of habeas
corpus.
The grounds on which the right to this relief is founded are set
forth in his petition, as follows:
"Your petitioner is informed and believes that proceedings
supplementary to execution, wherein your petitioner is restrained
of his liberty, are not, by the laws of the State of New York, a
remedy in common law causes to reach the property of the judgment
debtor allowed in actions at law in the courts of the United States
by sec. 916 of the Revised Statutes of the United States, but, on
the contrary, that these proceedings are, by the laws of the State
of New York, prescribed as part of a code to abolish common law
causes as such and to amalgamate and indiscriminate common law
causes and suits in equity, and to confer upon the courts of that
state indifferently in the same action powers in actions at law and
in equity. Your petitioner is informed and believes that the
application of this provision of that code to the courts of the
United States is not authorized by any act of Congress, and is in
conflict with the provisions of Article III, sec. 2, of the
Constitution of the United States, which preserves and establishes
the distinction between relief at law and in equity. Your
petitioner therefore avers and charges that the said circuit
Page 105 U. S. 649
court was and is wholly without jurisdiction in the premises,
and that therefore all its proceedings therein are null and
void."
The material portions of the present statutes of New York
referred to, and which were in force at the time of the adoption of
the Revised Statutes of the United States, are as follows:
"
PROCEEDINGS SUPPLEMENTARY TO EXECUTION"
"SEC. 292. (1) When an execution against property of the
judgment debtor, or of any one of the several debtors in the same
judgment, issued to the sheriff of the county where he resides or
has a place of business, . . . is returned unsatisfied in whole or
in part, the judgment creditor, at any time after such return made,
is entitled to an order from a judge of the court . . . requiring
such judgment debtor to appear and answer concerning his property,
before such judge at a time and place specified in the order,
within the county to which the execution was issued. . . ."
"(3) On an examination under this section, either party may
examine witnesses in his behalf, and the judgment debtor may be
examined in the same manner as a witness."
"
* * * *"
"(5) 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 or prosecution. Nor 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."
"SEC. 295. Witnesses may be required to appear and testify in
any proceedings under this chapter in the same manner as upon the
trial of an issue."
"SEC. 296. The party or witness may be required to attend before
the judge, or before a referee appointed by the court or judge; if
before a referee, the examination shall be taken by the referee,
and certified to the judge. All examinations and answers before a
judge or referee under this chapter shall be on oath."
"SEC. 297. The judge may order any property of the judgment
Page 105 U. S. 650
debtor not exempt from execution in the hands either of himself
or any other person or due to the judgment debtor, to be applied
towards the satisfaction of the judgment."
"
* * * *"
"SEC. 298. The judge may also, by order, appoint a receiver of
the property of the judgment debtor, in the same manner, and with
the like authority, as if the appointment was made by the court,
according to SEC. 244*. But before the appointment of such
receiver, the judge shall ascertain, if practicable, by the oath of
the party or otherwise, whether any other supplementary proceedings
are pending against the judgment debtor, and if such proceedings
are so pending, the plaintiff therein shall have notice to appear
before him and shall likewise have notice of all subsequent
proceedings in relation to said receivership. No more than one
receiver of the property of a judgment debtor shall be appointed.
The judge may also, by order, forbid a transfer, or other
disposition of the property of the judgment debtor, not exempt from
execution, and any interference therewith. Whenever the judge shall
grant an order for the appointment of a receiver of the property of
the judgment debtor, the same shall be filed in the office of the
clerk of the court of the county where the judgment roll in the
action . . . is filed; and the said clerk shall record the order in
a book to be kept. . . . A certified copy of said order shall be
delivered to the receiver named therein, and he shall be vested
with the property and effects of the judgment debtor from the time
of the filing and recording of the order as aforesaid. The receiver
of the judgment debtor shall be subject to the direction and
control of the court in which the judgment was obtained, upon which
the proceedings are founded. . . . But before he shall be vested
with any real property of such judgment debtor, a certified copy of
said order shall also be filed and recorded in the office of the
clerk of the county in which any real estate of such judgment
debtor, sought to be affected by such order, is situated, and also
in the office of the clerk of the county in which such judgment
debtor resides."
"SEC. 299. If it appear that a person or corporation alleged to
have property of a judgment debtor or indebted to him claims an
interest in the property adverse to him or denies the debt, such
interest or debt shall be recoverable only in an action against
such person or corporation by the receiver, but the judge may by
order forbid a transfer or other disposition of such property or
interest till a sufficient opportunity be given to the receiver to
commence the action and to prosecute the same to judgment and
execution,
Page 105 U. S. 651
but such order may be modified or dissolved by the judge
granting the same, at any time, on such security as he shall
direct."
"SEC. 300. The judge may, in his discretion, order a reference
to a referee agreed upon by the parties or appointed by him to
report the evidence or the facts, and may in his discretion appoint
such referee in the first order or at any time."
"SEC. 302. (1) If any person, party or witness, disobey an order
of the judge or referee, duly served, such person, party or
witness, may be punished by the judge as for a contempt. (2) And in
all cases of commitment under this chapter . . . , the person
committed may, in case of inability to perform the act required or
to endure the imprisonment, be discharged from imprisonment by the
court or judge committing him or the court in which the judgment
was rendered, on such terms as may be just."
Section 16 of the Revised Statutes, which repeats, in this
respect, the provisions of sec. 6 of the act of June 1, 1872, c.
255, "to further the administration of justice," is as follows:
"The party recovering a judgment in any common law cause in any
circuit or district court shall be entitled to similar remedies
upon the same, by execution or otherwise, to reach the property of
the judgment debtor as are now provided in like causes by the laws
of the state in which such court is held or by any such laws
hereafter enacted which may be adopted by general rules of such
circuit or district court, and such courts may from time to time,
by general rules, adopt such state laws as may hereafter be in
force in such state in relation to remedies upon judgments as
aforesaid by execution or otherwise."
This provision of the Revised Statutes merely embodies and
extends the principle contained in the fourteenth section of the
Act of Sept. 24, 1789, c. 20, 1 Stat. 81, which, with the
subsequent legislation of Congress in furtherance of it, has been
repeatedly the subject of consideration in this Court.
Palmer v.
Allen, 7 Cranch 550;
Wayman v.
Southard, 10 Wheat. 1;
Bank of the
United States v. Halstead, 10 Wheat. 51;
Boyle v.
Zacharie, 6 Pet. 648;
Beers
v. Hughton, 9 Wheat. 329;
Ross v.
Duval, 13 Pet. 45;
United
States v. Knight, 14 Pet. 301;
Duncan v.
Darst, 1 How. 301;
McCracken
v. Hayward, 2 How. 608;
Homer v.
Brown, 16 How. 354.
Page 105 U. S. 652
It is the settled doctrine of this Court, as established and
explained by these authorities, that the power of Congress under
the Constitution, as well as that of the courts of the United
States acting under its authority, extends to the adoption of the
laws of the several States not only as to the nature and form of
writs of execution for the enforcement of judgments, but also as to
all proceedings thereupon. As in
Beers v. Haughton
(supra), where it was held to include proceedings on the part
of the judgment debtor, for his exoneration under insolvent laws of
the state from imprisonment under a
ca. sa., and the
consequent discharge from liability of the special bail.
It is contended, however, on behalf of the present petitioner
that the proceedings under which he has been committed to the
custody of the marshal and restrained of his liberty, in their
origin and nature are of equitable jurisdiction exclusively, as
distinguished from proceedings at common law, which, by the
prohibitions of the Constitution of the United States, Congress
cannot lawfully authorize the courts of the United States to
administer except by bill in chancery.
The jurisdiction of the courts of chancery in New York,
exercised prior to the adoption of its present code, which
authorized a discovery of assets from a judgment debtor in aid of
an execution, was statutory. It was conferred and defined by secs.
38 and 39 of tit. 2, art. 2, 2 Rev.Stats. of New York, 173-174. It
was therein provided that
"Whenever an execution against the property of a defendant shall
have been issued on a judgment at law, and shall have been returned
unsatisfied in whole or in part, the party suing out such execution
may file a bill in chancery against such defendant and any other
person to compel the discovery of any property or thing in action
belonging to the defendant and of any property, money, or thing in
action due to him or held in trust for him, and to prevent the
transfer of any such property, money, or thing in action or the
payment or delivery thereof to the defendant, except where such
trust has been created by, or the fund so held in trust has
proceeded from, some person other than the defendant himself. The
court shall have power to compel such discovery and to prevent such
transfer, payment, or delivery, and to decree satisfaction of the
sum remaining
Page 105 U. S. 653
due on such judgment out of any personal property, money, or
things in action belonging to the defendant or held in trust for
him, with the exception above stated, which shall be discovered by
the proceedings in chancery, whether the same were originally
liable to be taken in execution at law or not."
It is said in argument, by Mr. B. F. Butler, in
Mitchell v.
Bunch, 2 Paige (N.Y.) 606, that these provisions of the
Revised Statutes were passed in affirmance of the doctrine of
Hadden v. Spader, 20 Johns. (N.Y.) 554. That case,
however, did not go upon any idea that a bill in equity would lie
against a judgment debtor for a general discovery of assets, but
merely upon the ground of a jurisdiction to discover and apply
equitable assets specifically described; the question being, as it
was put by Woodworth, J.,
"whether a debtor who has placed his funds in the hands of a
trustee, where they cannot be reached by an execution at law, can
put his creditor at defiance and enjoy the benefit of these funds,
which ought to be appropriated to the payment of his debts."
This case was preceded by the decisions of Chancellor Kent in
Hendricks v. Robinson, 2 Johns. (N.Y.) Ch. 283;
Brinkerhoff v. Brown, 4
id. 671; and
McDermutt v. Strong, id. 687.
In
Hendricks v. Robinson (supra), the Chancellor
said:
"I have no doubt that this Court can and ought to lend its aid,
whenever that aid becomes requisite to enforce a judgment at law,
by compelling a discovery and account, either as against the debtor
or as against any third person who may have possessed himself of
the debtor's property and placed it beyond the reach of an
execution at law. The preliminary step which seems to be required
is that the judgment creditor should have made an experiment at
law, and bound the property, by actually suing out execution,"
citing
Angell v. Draper, 1 Vern. 399;
Lord
Nottingham, cited in 1 P.W. 445;
Stileman v. Ashdown,
2 Atk. 477;
Shirley v. Watts, 3
id. 200.
In
Brinkerhoff v. Brown (supra), he said that it was
the settled rule in chancery that the plaintiffs must show that
they have taken out execution at law and pursued it to every
available extent against the property before they can resort to
that court for relief; that the presumption is that the court which
renders judgment is competent to enforce it; that
"if he seeks
Page 105 U. S. 654
aid as to real estate, he must show a judgment creating a lien
upon such estate; if he seeks aid in respect to personal estate, he
must show an execution giving him a legal preference or lien upon
the chattels."
The opinion cites the case of
Taylor v. Hill, 1
Eq.Cas.Abr. 132, pl. 15, before Lord King in 1705, where the bill
having been filed before execution for discovery of particular
specified effects of the judgment debtor in the hands of a third
person, a demurrer was allowed; but the Chancellor said it would
not lie against the debtor himself, nor against a third person, to
have a general discovery. And in
McDermutt v. Strong
(supra), the Chancellor said:
"I regard the law to be clearly settled that before a judgment
creditor can come here for aid against the goods and chattels of
his debtor or against any equitable interest which he may have
therein, he must first take out execution, and cause it to be
levied or returned so as to show thereby that his remedy at law
fails and that he has also acquired by that act of diligence a
legal preference to the debtor's interest."
It is quite apparent from this review of the decisions upon the
point in New York prior to the adoption of the provisions of the
Revised Statutes of that state on the subject that the latter gave
a much more extensive remedy than was supposed to exist by virtue
of the customary jurisdiction of the chancery court, particularly
in requiring, when sought, from a judgment debtor a general
discovery of assets, legal and equitable, for the purpose of
enabling the judgment creditor to apply them to the payment of his
judgment.
In
Mitchell v. Bunch, supra, Chancellor Walworth seemed
to regard the jurisdiction of chancery, independent of the statute,
as equally extensive, and refers to the case of
Edgell v.
Haywood and Dawe, 3 Atk. 352, decided by Lord Chancellor
Hardwicke in 1746, as a direct authority in support of the bill in
the case before him, and as a decision which had never been
questioned; but the case before Lord Hardwicke was not that of a
bill for general discovery, but for a discovery in respect to
assets alleged to be in the hands of the co-defendant as executor,
applicable to the payment of a legacy which belonged to the
judgment debtor under a will, and which the complainant was
entitled to have appropriated to the payment of his
Page 105 U. S. 655
judgment, by virtue of the provisions of the act of 10 Geo. II.
c. 26, for the relief of insolvent debtors, under which the
debtor's person had been discharged as an insolvent from liability
to be taken in execution. The right to the remedy in equity in that
case was put distinctly upon the ground that the method by which
the judgment creditor might have reached the property of his
debtor, by proceeding at law against his person, having been taken
away by the statute, the choses in action were equitable assets
which a court of chancery would appropriate to the benefit of his
creditors.
Mr. Hare, in his Treatise on Discovery, c. 5, sec. 3, p. 84, ed.
1876, states that
"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,"
but adds that "the cases which are cited in support of a
jurisdiction of this nature seem to be chiefly bills for relief
raising a different and substantive equity." He refers, however, to
Mountford v. Taylor, 6 Ves.Jr. 788, as a case where Lord
Eldon seems to have acted upon the doctrine of a general right of
the creditor to a discovery in order to make his judgment available
in consequence of the admission of its correctness by counsel. That
was the case of a bill by judgment creditors, who had sued out
elegits for a discovery of freehold estates, charging that the
defendant, upon his election as a member of Parliament previously
to the judgment, gave in his qualification, and that, if the
estates composing it were conveyed away since, it was without
consideration. The Lord Chancellor remarked on the hearing that he
was not quite clear that such a bill must not allege that, at a
given time, the defendant was seized of given lands (not simply
suggesting, as a fishing bill, that at some time or other he had
some land), and that he conveyed those lands away fraudulently to
put them out of the reach of this creditor. Afterwards he overruled
the demurrer, saying:
"But the bill charges that the defendant delivered in a schedule
of the particulars of his estates, whereby he made out his
qualification, and that he has conveyed them without consideration,
as evidence that he has lands liable to execution, as they may be
unquestionably. Upon that I think he must answer. "
Page 105 U. S. 656
It thus appears that the proceeding in aid of execution, in its
present form in New York as well as that in which it was
administered under the Revised Statutes by the court of chancery,
was a statutory process, and did not form any part of that
jurisdiction in equity which, as vested in the courts of the United
States by the Constitution, is assumed to be inalienable. And the
remaining question therefore becomes not so much whether Congress
may, by appropriate legislation, transmute an equitable into a
legal procedure as whether it can in any wise change the rules of
pleading and procedure as to courts, either of law or equity, in
force in England at the time of the adoption of the Constitution,
or whether, by the adoption of that instrument, all progress in the
modes of enforcing rights, both at law and in equity, was arrested
and their forms forever fixed. To state the question is to answer
it.
The conclusion will be not less clear, however, if we concede
that the proceeding in question belongs historically, as to its
form, to the administration of chancery courts. If we regard its
nature, it will be perceived that it is, so far as it relates
merely to the discovery of the debtor's assets, a collateral and
auxiliary remedy. If the discovery results in ascertaining the
existence of property subject to levy under execution, then the
remedy at law is perfectly restored. Or if, by lawful power over
the person of the debtor, he may be compelled by a court of law to
apply his property to the payment of his creditor's claim, the
satisfaction is complete. If, on the other hand, other parties with
adverse claims are revealed, or obstacles to the pursuit of the
legal rights of the judgment creditor are brought to light, or the
interests to be subjected are not cognizable at law, or the
equities require to be marshaled, it may be that relief can only
then be had in a court of equity, where all parties can be made to
appear, all conflicting claims adjudicated, and the complete remedy
molded to fit the circumstances of the case.
But here we have nothing to do with any question but that of
discovery. The only relief sought is knowledge of property
belonging to the debtor, applicable either at law or in equity to
the payment of the creditor's judgment. What shall be done after
that knowledge has been acquired is to be determined
Page 105 U. S. 657
upon the circumstances as they may then appear, and cannot now
be considered. For the proceeding for discovery is distinct and
entirely separable from the subsequent relief, if any shall then be
sought.
Now it is of the essence of the jurisdiction of courts of
equity, in bills of discovery merely, that it is in aid of the
legal right, and it is a fundamental rule prescribed for the
exercise of that jurisdiction, in the words of Story (Eq.Jur., sec.
1495) that
"courts of equity will not entertain a bill for discovery to
assist a suit in another court if the latter is of itself competent
to grant the same relief, for in such a case the proper exercise of
the jurisdiction should be left to the functionaries of the court
where the suit is depending."
It follows, then, that although at one time courts of equity
would entertain bills of discovery in aid of executions at law
because courts of law were not armed with adequate powers to
execute their own process, yet the moment those powers were
sufficiently enlarged by competent authority to accomplish the same
beneficial result, the jurisdiction in equity, if it did not cease
as unwarranted, would at least become inoperative and obsolete. A
bill in equity to compel disclosures from a plaintiff or a
defendant of matters of fact peculiarly within his knowledge,
essential to the maintenance of the legal rights of either in a
pending suit at law, would scarcely be resorted to unless under
special circumstances, now, when parties are competent witnesses,
and can be compelled to answer, under oath, all relevant
interrogatories properly exhibited, nor to compel the production of
books, deeds, or other documents, important as instruments of
evidence when the court of law in which the suit is pending is
authorized by summary proceedings to enforce the same right.
But even conceding that such enlargements of the powers of
courts of law do not deprive courts of equity of jurisdiction
theretofore exercised, no one has ever supposed that they were
illegitimate intrusions upon the exclusive domain of equity or
produced any confusion of boundaries between the two systems. No
one has ever questioned the authority of Congress to make parties
to a suit competent witnesses, or to confer upon courts of law
power to compel the production of books
Page 105 U. S. 658
and papers, because discovery was an ancient head of equitable
jurisdiction. It is the very office of the principle of equity to
supply defects in the law, and it is not to be regarded as
anomalous that the technical law should, in the course of its
necessary development, incorporate into its own organization,
improvements in procedure, first introduced as equitable remedies.
It is this very capacity of parallel growth that constitutes and
perpetuates the harmonious coexistence of the two departments of
our jurisprudence. Its history furnishes many examples and
illustrations of this tendency and of its results.
There is certainly nothing in the nature of an examination of a
judgment debtor upon the question as to his title to and possession
of property applicable to the payment of a judgment against him and
of the fact and particulars of any disposition he may have made of
it which would render it inappropriate as a proceeding at law under
the orders of the court where the record of the judgment remains
and from which the execution issues. Such examinations are familiar
features of every system of insolvent and bankrupt laws the
administration of which belongs to special tribunals and forms no
necessary part of the jurisdiction in equity. It is a mere matter
of procedure, not involving the substance of any equitable right,
and may be located, by legislative authority, to meet the
requirements of judicial convenience. Whatever logical or
historical distinctions separate the jurisdictions of equity and
law, and with whatever effect those distinctions may be supposed to
be recognized in the Constitution, we are not of opinion that the
proceeding in question partakes so exclusively of the nature of
either that it may not be authorized indifferently as an instrument
of justice in the hands of courts of whatever description.
Petition denied.