ENSIGN v. NELSON

ENSIGN v. NELSON. N. Y. Supreme Court, General Term, First Department; June, 1888. 1. Arrest; non-resident; action for accounting.] In an action for an accounting upon an agreement by which the defendant was to secure advertising contracts, to be turned over to the plaintiff "for performance by him, the profits to be equally divided; and under which agreement the defendant collected the amounts due upon the contracts and failed to account therefor with the plaintiff,— Held, that the facts were such as to authorize an order of arrest against defendant—a non-resident—pursuant to Code Civ. Pro. § 650. 2. Same.] Held, also; that the right to arrest is not defeated because the balance recovered by final judgment in the action could be collected by execution. 3. Contempt; failure to comply with direction for accounting.] It seems that where a direction of the court requiring the defendant in an action for an accounting to state and file an account is not complied with, such failure is enforceable by punishment for contempt. 4. Interlocutory judgment is within Code Civ. Pro. § 550.] An interlocutory judgment containing such a direction would be within the meaning of Code Civ. Pro. § 550,—providing that a defendant may be arrested in an action wherein the judgment demanded requires the performance of an act, the neglect or refusal to perform which would be punishable as a contempt. 5. Writ ofne exeat; Code Civ. Pro. § 550, a substitute for.] It seems that the order of arrest granted under Code Civ. pro. § 550, is a a substitute for the writ of ne exeat, which has beep abolished by Code Civ. Pro. § 548. 6. Arrest; moating; new proof.] Where a defendant in moving to vacate an order of arrest submits an affidavit stating additional facts, the plaintiff has the right, under Code Civ. Pro. § 568, to oppose the application by new proof tending to sustain any ground of arrest recited in the order, and such new proof may consist in part of the plaintiff’s verified complaint.t 7. Same; discretion of court.] Although the motion to vacate has been submitted, yet it is within the power of the court to receive such complaint after such submission and before the decision of the motion. 8. XTndertaTcing upon arrest; sufficiency.] An undertaking given upon an order of arrest granted by the court, executed by two sureties, if accepted by the judge presiding in the court where the order is granted, is sufficient to bring it within Code Civ. Pro. § 560—pro-viding that where the order can be granted only by the court, the undertaking, if required, shall be in form and amount such as the court prescribes. * Code Civ. Pro. § 568. An application-specified in the last section, [§ 567 provides when an application to vacate order of arrest may be made) may be founded only upon the papers upon which the order was granted ; in which case it must be made to the court, or, it the order was granted by a judge out of court, to the same judge in court or out of court, and with or without notice, as he deems proper ; and the application must be heard upon those papers only. Or it may be founded upon proof, by affidavit, on the part of the defendant; in which case, it fnust be made to the court, or, if the order was granted by a judge, out of court, to any judge of the court upon notice; and it may be opposed by new proof, by affidavit, on the part of the plaintiff, tending to sustain any ground of arrest recited in the order, and no other, unless the defendant relies upon a discharge in bankruptcy, or upon a discharge or exoneration granted in insolvent proceedings; in which case the plaintiff may show any matter in avoidance thereof, which he might show upon the trial. t Code Civ. Pro. § 3343, subd. 11. The word “ affidavit ” includes :a verified pleading in an action, or a verified petition or answer in a special proceeding. Appeal from an order denying a motion to vacate an order-of arrest, and from an order allowing the submission ■ of the plaintiff’s complaint as new proof to oppose the motion to vacate. , The plaintiff Hennon L. Ensign commenced this action against the defendant, Frederick Tracy Nelson, to obtain an accounting of moneys alleged to have been received by the defendant, and as to which, the plaintiff alleged that a positive balance thereof, would be found to be due to the plaintiff upon an accounting. The plaintiff obtained upon a summons and affidavits, and undertaking, an order of arrest against the defendant, pursuant to Code Civ. Pro. § 550, on the ground that the defendant was a non-resident, and that by reason of such non-residence, there was danger that a judgment or order requiring the defendant to account would be rendered ineffectual. The said affidavits and the complaint alleged, in substance, that the plaintiff and defendant entered into a written agreement, whereby the defendant was to secure advertising contracts, and turn them over to the plaintiff for execution ; that they were to share the profits equally ; that the defendant procured four advertising contracts which the plaintiff executed, making all the necessary disbursements to which the defendant contributed nothing; that the defendant had collected certain specified amounts due upon the said contracts, but that the plaintiff had no knowledge as to how much more the defendant had collected ; and that it had been agreed that the defendant should render an account of the said collections as soon as made ; but that although duly demanded, he had never rendered any account thereof to the plaintiff; and the complaint demanded judgment, (1.) as an interlocutory judgment, that the defendant be decreed to render an account of the moneys collected, and to produce all the vouchers in his possession or under his control, relating to said collections ; (2.) that plaintiff have final judgment for the amount which might be found due him. The plaintiff’s affidavits further showed that the plaintiff made diligent but unavailing efforts to find the defendant within this State for a period of over a year prior to the arrest; and also alleged facts tending to show want of good faith on the part of the defendant in failing to render any account. The defendant was arrested under the order, after which he moved to vacate the same upon the ground that the order was illegal and void because of the alleged insufficiency of the affidavits (on which it was made) to constitute such an action as would warrant the granting of such an order. He also submitted an affidavit in support of the motion to vacate, stating that he had demanded an account of the transactions of the business from the plaintiff, w'ho had refused to furnish it; and that he was employed in Hew York City by a firm thereof, and resided in Philadelphia. The motion came on for a hearing, and after submission, but before the decision thereof, the plaintiff moved to-be allowed to submit the complaint in the action as a part of the papers, in opposition to the motion to vacate, which motion the defendant opposed. The Court at Special Term denied the motion to vacate the order of arrest, and granted the motion allowing the submission of the complaint as a part of the motion papers, in opposition to the defendant’s motion to. vacate the order of arrest, but rendered no opinion. From both of these orders the defendant appeals to the General Term. George W. Blunt, for the defendant, appellant. I. To authorize an arrest under Code Civ. Pro. § 550, the defendant must have been guilty of fraud at the time the cause of action accrued (Smith v. Duffy, 37 Hun, 506). This section (550) applies to actions for specific performance: Segelken v. Meyer, 94 N. Y. 473, 488; to actions for alimony : Boucicault v. Boucicault, 21 Hun, 431,435 ; or where a deed is required to be executed : Brownell v. Akin, 6 Hun, 378, 380; but not to an action where, as here, the judgment could be enforced by execution : Myers v. Becker, 95 N. Y. 486; Geery v. Geery, 63 Id. 255, 256; Crippen v. Hudson, 13 Id. 161. An action at law would be the proper action : Williard's Eq. Jur. 92; Story's Eq. Jur. vol. 1, § 664, note; Emery v. Pease, 20 N. Y. 62; Estes v. Wilcox, 67 Id. 264; Genesee Nat. Bank v. Mead, 18 Hun, 303, 306. The defendant being a partner and lawfully in the .possession of the money cannot be arrested (Smith v. Small, 54 Barb. 223 ; Rainsford v. Rainsford, 57 Id. 58; aff’d in 47 N. Y. 656; Buell v. Cole, 54 Barb. 353; Clark v. Dibble, 16 Wend. 601; Cary v. Williams, 1 Duer, 667). If the defendant was not a partner, but the agent of the plaintiff, then the action should be on contract and the arrest was illegal (Greentree v. Rosenstock, 61 N. Y. 589; Conaughty v. Nichols, 42 Id. 83). II. The writ of ne exeat is now abolished and the cases arising thereunder have no application (Code Civ. Pro. § 548 ; Collins v. Collins, 80 N. Y. 24, 26). Sumner B. Stiles for the plaintiff, respondent. I. The discretionary order allowing the complaint to be submitted was properly granted, as a verified complaint is an affidavit, and where the defendant moves on proof the plaintiff may sustain the order of arrest by affidavit,, substantiating grounds of arrest recited in the order that are not attacked by the defendant’s papers (Code Civ. Pro. §§ 568, 3343 (subd. 11); Evans v. Holmes, 46 How. Pr. 515; Scott v. Williams, 14 Abb. Pr. 70; Ballard v. Fuller, 32 Barb. 68). II. Whether parties are engaged in a joint venture merely or are partners, there is a positive right to an action of accounting which is equitable relief (Marston v. Gould, 69 N. Y. 220). III. In such an action the plaintiff, in a proper case, has the right to an interlocutory judgment requiring the defendant to bring in and file a formal account, and giving the plaintiff the right to examine the accounting party upon oath, as the plaintiff will not, in such a case, be compelled to make a hostile defendant his own witness by a subpoena in order to prove his case even where judgment is obtained by default (Hathaway v. Russell, 7 Abb. N. C. 138; aff’d in 46 Super. Ct. (J. & S.) 103 ; Wiggin v. Gans, 4 Sandf. 646); and where there are partners the plaintiff has a right to the production of partnership books and papers upon a partnership accounting (Stebbins v. Harmon, 17 Hun, 445) ; and such production could be required by an interlocutory judgment. IV. Whether the defendant is a resident or a non-resident, his refusal to obey an interlocutory judgment, requiring him to account, etc., would be punishable by the court as a contempt (Hathaway v. Russell and Wiggin v. Gans (above) and Code Civ. Pro. § 1241, subd. 3). But no arrest can be granted in such a case against a resident unless about to depart from the State, because he is always here so as to be punished for disobedience ; but where, as in tile case at bar, the defendant is a non-resident, and by reason thereof there is danger that such an interlocutory judgment would be rendered ineffectual, then the Code (§ 550) has given a remedy by an order of arrest, which is a substitute for the old writ of he exeat, the object of which was to secure the presence of the defendant within the jurisdiction, and tile decisions under the old writ are, therefore, applicable under the present Code. Citing Collins v. Collins, 80 N. Y. 24; Glenton v. Clover, 10 Abb. Pr. 422; Thorne v. Halsey, 7 Johns. Ch. 189; Woodward v. Schatzell, 3 Id. 412; Dick v. Swinton, 1 Ves. E. B. 371; Stewart v. Graham, 19 Ves. 313 ; Flack v. Holm, 1 Jac. & Walk. 405 ; Meyer v. Meyer, 25 N. J. Eq. 28; Houseworth’s Adm’r v. Hendrickson, 27 Id. 60; Dean v. Smith, 23 Wisc. 483; and distinguishing Forrest v. Forrest, 10 Barb. 46; Allen v. Hyde, 2 Abb. N. C. 197; Brownell v. Akin, 6 Hun, 378; Genesee River Bk. v. Mead, 18 Id. 303; Smith v. Duffy, 37 Id. 506. V. By Code Civ. Pro. § 482, the plaintiff in such a case may demand an .interlocutory judgment; and by § 1200 the word “ judgment,” as used in § 550, includes an interlocutory judgment, which, in the case at bar, could not be enforced by an execution, but by process of contempt (Code Civ. Pro. §§ 1240, 1241 [subd. 3]). Code Civ. Pro. § 550. A defendant may also t)e arrested in an action wherein the judgment demanded requires the performance of an act, the neglect or refusal to perform which would be punishable by the court as a contempt, where the defendant is not a resident of the State, or, being a resident, is about to depart therefrom, by reason of which non-residence or departure there is danger that a judgment or an order requiring the performance of the act will be rendered inef-. fectual. [MAJORITY — Daniels, J.] Daniels, J. The order of arrest was made by the court under section 550 of the Code of Civil Procedure. This authorizes the court to make the order in an action wherein the judgment demanded would require the performance of an act, the neglect or refusal to perform which would be punishable by the court as a contempt, and the defendant is not a resident of the State, or, being a resident, is about to depart therefrom, by reason of which non-residence or departure there might be danger that the judgment or order requiring the performance of the act would be ineffectual. The action was brought for an accounting, upon an agreement between the parties, by which the defendant agreed to secure the exclusive control of the advertising of responsible parties, and to turn over their contracts to the plaintiff for performance by him, the parties agreeing to share equally the net profits which might accrue from the advertising begun and executed in that manner. It was stated in the affidavits that the contracts had been obtained for printing and had been performed under this agreement, and that the defendant had collected the amounts due for the services rendered, and had failed to account with the plaintiff concerning the same. It was also stated that the defendant did not reside within this State, but was a resident of Philadelphia, in the State of Pennsylvania. These facts presented a presumptive right of action against the defendant, and a case in which an order for his arrest and detention might be made by the court. And it did not follow, because the balance recovered by the judgment could be collected by execution, that the defendant could not be arrested under the order. Whether the parties are to be regarded strictly as partners between themselves, or as persons engaged in a joint enterprise for mutual profit, under the agreement which they entered into, is not important, for in either view an action for an accounting could be maintained by the plaintiff against the defendant (Marston v. Gould, 69 N. Y. 220, 224, 225). And in the regular course of proceeding in the action the defendant could, and ordinarily would, be required to present and file a statement of the business and of the accounts (Hathaway v. Russell, 7 Abb. N. C. 138; aff’d in 46 Super. Ct. [J. & S.] 103). The practice in an action for an accounting was there considered, and the conclusion was sustained, upon authority, that the defendant, under the present system, could be required, as he was under the preceding practice in chancery, to state and file an account of the business and transactions of the firm, or of their joint adventure. And where that direction may be given, and the defendant fails to comply with it, then it could regularly be enforced by the court, by the punishment of the party failing to comply, for a contempt. The direction would regularly be given bj an interlocutory judgment, which would be a judgment within the language of subdivision 4 of section 550 of the Code of Civil Procedure ; for the term judgment, as it was there used, inc’udes either an interlocutory or final determination of the rights of the parties (Code of Civil Procedure, § 1.200). ’ • The order of arrest, in this class of cases, is a substitute for the writ of ne exeat, which has been abolished by the Code." And it is authorized by section 550 of the Code in an action of this description, and so was a ne exeat held to be in cases arising in courts of equity (Meyer v. Meyer, 25 N. J. Equity, 28; Dean v. Smith, 23 Wis. 483). The defendant moved to vacate the order, not only upon the alleged insufficiency of the affidavits on which it was made, but also on an affidavit of his own, stating that he had demanded an account of the transactions of the business from the,plaintiff, who had infused to furnish it, and that’ he was in the employ of Munn & Co., in the City of Hew. Work, although a resident of the City of Philadelphia. This affidavit, although briefly stating additional facts, vested the plaintiff with the right, under section 568 of the 'Code of Civil Procedure, to oppose the application for the ■discharge of the order, by new proof tending to sustain •any ground of arrest recited in the order, and such additional proof was produced upon the hearing, but not materially changing the case as it had been before presented'. After the argument of the motion, and its submission to the court, an application was made on behalf of the plaintiff for leave to add the complaint to the additional proofs produced, and after the hearing of the defendant upon that application, the order was made allowing the complaint to be -submitted. This the court evidently had the power to do, inasmuch ■as the motion remained undecided, and the complaint was received only as an additional affidavit tending to sustain the ■order of arrest. The extent to which the new proof may be made is not important. If it is given in any degree in •support of the application to discharge the order, the-plaintiff has the right to sustain it by further proof or further •affidavits on his part, directed to either of the grounds upon which the order may have been made. The undertaking, .given upon the application for the order of arrest, was executed by two sureties in the sum of $250, and by section ■560 of the Code it was required to be in the form and amount which the court should prescribe. This undertaking was accepted and approved by the Judge presiding in the court where the order was made, and it conforms to all that is requisite to bring it within this section of the Code. And as the order itself was made by the court, it was not necessary that it should be subscribed by the Judge presiding. Upon no ground does the defendant appear to be entitled to be relieved from this order of arrest, and both that order and also that made on the application permitting the ■complaint to. be added to the proofs on the hearing of the motion, should be affirmed, with $10 costs, and also the disbursements. Beady and Baetleit, JJ., concurred, Orders affirmed. As the statute now stands, subd. 4 of § 550, here referred to, is all that remains of that section.