PEOPLE ex rel. KEILEY v. SPEIR

PEOPLE ex rel. KEILEY v. SPEIR. N. Y. Supreme Court, General Term, First Department; October, 1877. [Reversing Keiley v. Dusenbury, p. 360 of this vol.] Action on Contract.—Arrest Under Non-Imprisonment Act.— Equitable and Legal Actions.—Supplementary Proceedings. "Arrest under the non-imprisonment act may be allowed as well in actions of an equitable as in those of a legal nature. "A judgment in a creditor’s action or receiver’s action, against a fraudulent transferee of the debtor’s property, awarding the recovery of a sum of money from him on the ground that he had wrongfully received assets to that amount properly applicable to the creditor’s demand, constitutes a case of 1 ‘ money due upon a contract, . . . implied;” and a warrant of arrest may issue. Facts raising an implied assumpsit make a case within the act, although established in an equitable action. The testimony of a debtor, taken upon his examination in supplementary proceedings, may be used as evidence of his fraud, to obtain a warrant of arrest under the non-imprisonment act. Proceedings under the non-imprisonment act are not criminal proceedings within the rule as to the privilege of a witness. Certiorari. Peter Morris and others, having recovered judgment against Selah Hiler, took proceedings supplementary to execution thereon, and examined the debtor under the Code of Procedure, and having procured William S. Keiley to be appointed receiver, Keiley, as receiver, brought an action in the H. Y. superior court, against Selah Hiler, Charles Dusenbury and others, to set aside an assignment which the debtor had made to Charles Dusenbury as fraudulent and void. The receiver’s complaint alleged the recovery of judgment, and issue and return of execution, and the proceedings supplementary to execution in which plaintiff was appointed, but did not indicate the nature of the action in which the judgment was recovered; otherwise than by saying it was for a, sum named, “ damages and costs.” The complaint also alleged, that among Hiler’s assets was a share in a fund in the hands of the city chamberlain, who was accordingly made a defendant; that Hiler obtained an order of court that it be paid over, but the creditors intervened with an order forbidding the payment, and that the fund was claimed by Dusenbury as Hiler’s assignee for benefit of creditors, and that Dusenbury obtained payment from the chamberlain to himself of the fund, by an order of court made on an application in which he did not disclose the fact that a receiver had been appointed against him. The court before whom the cause was tried, as an equity cause, without a jury, found that these allegations were sustained, and that the alleged assignment to Dusenbury was void, and the collection by him of the fund in question fraudulent as against the plaintiff ; that the receiver, by appointment, &c., became entitled to enough of the fund to pay the judgment; that the payment of the fund by the chamberlain exonerated him from further liability ; and that plaintiff was entitled to judgment against Dusenbury, for the amount of the judgment represented by the receiver, with interest and costs, &c. The receiver took supplementary proceedings against Dusenbury upon this new judgment, and examined him under oath pursuant to section 292 of the Code of Procedure, as is more fully stated at p. 361 of this volume. He then applied for a warrant of arrest bf Dusenbury under the non-imprisenment act. Annexed to the affidavit were the supplementary proceeding’s containing’Dusenbury’s examination; also the judgment-roll in the receiver’s action. On these papers a judge o£ the superior court issued the warrant of arrest under the non-imprisonment act, which he subsequently vacated on the objection that the examination in supplementary proceedings was not competent evidence on which to issue a warrant under that act against the person examined (reported at p. 360 of this volume). The receiver caused the proceedings to be removed to the supreme court by certiorari. D. M. Porter, for relator. I. Certiorari is proper to review (King v. Kirby, 28 Barb. 49 ; People v. Daly, 4 Hun, 641; 5 Wait’s Pr. 461; Spencer v. Hilton, 10 Wend. 608, 610; Townsend v. Morrell, 10 Id. 578; People v. Reed, 5 Denio,. 554; Exp. Robinson, 21 Wend. 671 ;• People v. Recorder, 6 Hill, 429; Clark v. Gallagher, 20 How. Pr. 308 (307); In re Dodd, 27 N. Y. 632). II. The judgment-roll, being a part of the evidence upon which the warrant was issued, cannot be controverted, but is conclusive (Krekeler v. Ritter, 62 N. Y. 372). A warrant may issue in all cases prescribed by 3 R. S. (5th Ed.) 126, §§ 6, 8; Latham v. Westervelt, 26 Barb. 256; People v. O’Brien, 6 Abb. N. S. 63; Same v. Goodwin, 50 Barb. 562. III. The respondent erred in deciding that the supplementary proceedings could not be used in evidence in these proceedings. This is not a criminal proceeding (People v. Underwood, 16 Wend. 546, 549; Goodwin v. Sharkey, 5 Abb. N. S. 64, 66 ; Berthelon v. Betts, 4 Hill, 577, 581; Moak v. De Forrest, 5 Id. 605 ; Hall v. Kellogg, 2 Kernan, 325 ; Spear v. Wardell, 1 Comst. 144); but a mere remedy to collect the debt (King v. Kirby, 28 Barb. 49 ; Wheaton v. Fay, 62 N. Y. 275). If. Admitting the supplementary examination, it shows the same facts as to the property named in it as was shown in Wheaton v. Fay, supra, leaving the additional frauds fully established by other proof. V. The court may correct the erroneous decision of the respondent (People v. Board of Police, 39 N. Y. 506; Morewood v. Hollister, 2 Selden, 309. Hall & Blandy, for respondent.—I. The court had no jurisdiction to issue the warrant in the first instance, as the papers on which the application was made for the warrant clearly showed that this is not a case within the act of 1831. II. The application for the warrant was based upon the examination of the defendant in supplementary proceedings, and the judgment-roll in the case. These were improperly used, and should not have been considered by the justice ; and if they are stricken from the case, then there is no proof before the court which would justify the issuing of the warrant (§ 292 of Code; Lathrop v. Clapp, 40 N. Y. 332. See also Forbes v. Willard, 37 How. Pr. 193; People v. Underwood, 16 Wend. 546). III. This is a criminal proceeding (Lynde v. Montgomery, 15 Wend. 461; Moak v. De Forrest, 5 Hill, 605 ; People ex rel. Latorre v. O’Brien, 3 Abb. Ct. App. Dec. 552 ; S.C., 6 Abb. N. S. 63). And the defendant, having been tried and acquitted, should not be placed in jeopardy again for the same offense (N. Y. Constitution, § 6, art. 1; Block v. People, 2 Parkers Crim. 676, and cases cited; People v. Goodwin, 18 Johns. 187 ; cited and approved, 24 N. Y. 82; Id. 101; 25 Id. 1421 ; 26 Id. 183). IV. The act of 1831 should not be construed harshly towards the debtor. A liberal construction should be given to it, because it is a law in restraint of the personal liberty of the citizen, and the present policy of this State does not favor imprisonment for debt, and it. is an act which may easily become, in the hands of relentless creditors, an instrument of persecution and wrong (People v. Recorder of Albany, 6 Hill, 429). Y. The court of its own motion should disregard the supplementary proceedings and judgment-roll, as the statutes prohibiting their admissibility are not a mere rule of evidence which a party can waive at his option, but they operate as an injunction upon the plaintiff, notwithstanding the failure to object to their admissibility. YI. Even if the evidence contained in the supplemental examination was properly before the court, it is not contradicted, and on its face it shows that the transfers were made in good faith, and for a valuable consideration, and that the proceeds had been lawfully disbursed, and that the defendant had no property. The affidavit on which the application was made was in the following form: [ Title of cause:] [ Venue.] L. A. G., being duly sworn says that he is the plaintiff’s - attorney in this action; that on the day of , 18 , judgment was recovered herein in favor of the plaintiff as receiver against, &e., &c., for, &c., &c., and that execution was thereunder issued to the sheriff' of , where said defendant, C. D., then resided, and still resides, and returned wholly unsatisfied, and that on, &c., an affidavit and order for the examination of the defendant, Charles Dusenbury', in supplementary proceedings on said judgment was served upon him, as deponent is informed and believes by the affidavit of A. W., a copy of which is hereto attached, marked A, and made a part thereof, and the said defendant C. D. was examined thereunder in said proceedings supplementary to execution, which examination was concluded on, &c., and a copy of which examination is hereto attached marked B, and made a part of this affidavit, and on said examination, the defendant stated [here followed admissions made by him as to his property and dealings, and farther allegations of his admissions in various other proceedings.] Deponent further says that the defendant C. D. does not give any reasonable account of any disposition he has made of the sum so received from his father for such property, nor that he has had any extraordinary expenses to consume the same, and he says he could not tell to whom he has paid it; that he has spent $1,000 of it betting in Morrissey’s pools, but could not state the time at which he paid it, npr to whom; that he could not tell to whom he paid any part of the moneys so received for the said two houses and lots. Deponent further says that he verily and sincerely belives the defendant is actually the owner of the said two houses and lots mentioned in his supplementary examination; and although the conveyance was made to his father, the same was not made in good faith, it was made to hinder, delay, and defraud his creditors, and especially the plaintiff. Deponent avers and sincerely believes that the said sum of $5,800, the proceeds of said transfers, is still in defendant’s hands or under his control, and that his statements that the same has been expended in betting and family expenses are false. Deponent further says he charges and verily believes the fact to be that the defendant O. D. is still the owner of the two houses'and the proceeds thereof, that he is now endeavoring to cover up and conceal the same, so as to cheat and defraud the plaintiff in this action, and to unjustly prevent the same from being applied to the payment of the plaintiff’s said judgment. Deponent further says that he, as counsel for the plaintiff, on or about July 23, 1875, examined the defendant, Dusenbury, as a party before trial. [Deponent further set forth various statements of Dusenbury as to the fuhd received from the cimiiberlain, and continued:] That the statements of said D. with respect to said fund are entirely contradictory, as appears from the said papers, which are the basis of deponent’s statements ; and deponent charges and believes that neither of the statements are true, but that the said D. has some of said fund received from the chamberlain of the city of New York, as stated in the complaint, still in his hands, sufficient to pay the plaintiff’s said claims ; and that he is now endeavoring to cover up and conceal the same so as to cheat and defraud the plaintiff and prevent the same from being applied to the payment of the plaintiff's said judgment. Deponent further says and charges that he verily believes that the defendant D. neither had any title nor right to the moneys received by him from the chamberlain of the City of New York, which is particularly mentioned in the judgment-roll in which the judgment in favor of the plaintiff was recovered, and that he well knew that he had none, but that he obtained the same in disobedience of the injunction restraining him from receiving the same, and that he obtained the same by fraud and imposition on the court of common pleas, which court made the order on which he obtained the same, and this statement is made upon the judgment-roll in this action and findings of fact contained in said judgment-roll and upon the documentary evidence putin evidence on the trial to obtain said judgment. Deponent further says the said judgment is wholly unpaid, and constitutes the foregoing indebtedness. And deponent further says that for the said cause of action the defendant, by the first two sections of the act to abolish imprisonment for debt, passed April 26, 1831, and the acts amending the same, cannot be arrested or imprisoned, as deponent is advised and believes. Deponent further says, that the defendant has disposed of his property aforesaid, consisting of land and money and his interest in the copartnership of T. D. & Son, with intent to defraud his creditors, the plaintiff among the number. Deponent further says, that the defendant has property and rights in action, to wit, the said lands and the said $5,800, and an interest in the firm of T. D. & Son, which he fraudulently conceals. Deponent further says that the defendant D. fraudulently contracted the debt and incurred the obligation respecting which the suit was brought, upon which the aforesaid judgment was rendered. The writ was as follows: The People of the State of New Torle. To Hon. Gilbert M. Speir, as judge of the superior court of the city of New York. Whereas, it has been represented to us by D. M. Porter, as counsel for Kelley, as receiver, &c., that upon, the application of one William S. Keiley, as receiver of the property and effects of one Selah Hiler, certain proceedings under “ an act to abolish imprisonment for debt,” passed April 26, 1831, and the acts amending the same were had, and that one Charles Dusenbury was arrested under a warrant issued in. said proceedings, and brought before you, and thereafter certain evidence was introduced, and proceedings had, and on February 3, 1877, you directed and ordered the discharge of said Charles Dusenbury from his said imprisonment, and exonerated his bail, and refused to-commit said Charles Dusenbury, and refused to rehear the matter, and refused to allow further evidence to be put in by the relator. 30 And whereas, it is alleged by said relator, that the said proceedings, and in directing and ordering the discharge of said Charles. Dusenbury from imprisonment under said warrant, refusing to commit, him, and exonerating his bail, and refusing to rehear the matter, and allow further proof to be put in, you proceeded irregularly and without authority, against the rights of the parties, to the great damage of him, the said relator, and that said order directing the matters and things aforesaid, is null and void. And we being willing to be certified of said warrant, also said order directing the discharge of said Charles Dusenbury -from the force of said warrant, and refusing to commit said Dusenbury, and refusing to rehear said matter, and not permitting further evidence to be brought before you, and upon which said Dusenbury was arrested, and upon the affidavits and exhibits thereto attached, and therein referred to, together with the affidavit of the defendant, Dusenbury, claiming to controvert the facts upon which the said warrant was granted, and the evidence introduced in support thereof, and all proceedings upon which said order directing said warrant was-granted, and dismissing or discharging the said warrant, and vacating and setting aside the bail given by defendant, Dusenbury, among other things, do command you, that you certify and return to our supreme court, before our justices thereof, at a general term thereof, to bo held at the city hall in the court house, in the city of New York, on March 5, 1877, at the opening of said term, said warrant directing the discharge of said Charles Dusenbury, from the force of said! warrant, and the papers upon which said Dusenbury was arrested, and the affidavits and exhibits thereto attached, and therein referred to, together with the affidavit of the defendant, Dusenbury, claiming to controvert the facts upon which the said warrant was granted, and the evidence introduced in support thereof, and all proceedings upon which said order directing said warrant was granted, and dismissing the said warrant, and vacating and setting aside the bail given by the defendant, Dusenbury, together with all proceedings upon which said warrant was founded and all proceedings subsequently had thereon, and all things touching and concerning the same, and also whether the said supplementary proceedings were introduced in evidence without, objection, and how long after the objection was taken before the final hearing, also whether there was not an adjournment for at least a week after the said supplementary proceedings were introduced and received in evidence, before the final hearing was had upon which the said warrant was ordered to be vacated, and Dusenbury discharged, and the time at which said objection was taken, and also the affidavit and order to show cause for a rehearing, and the affidavit used in opposition thereto, so that our said court may further act thereon as of right and according to law ought tó be done, and have you then and there this writ. Witness, &c. [MAJORITY — Daniels,J.] Daniels,J. The judgment on which the proceedings were instituted was recovered in an action brought by the relator to determine the title to certain moneys received by Dusenbury from the chamberlain of the city of New York, and for the recovery of such moneys. These moneys were affected by conflicting claims, and one of the objects of the action was to secure a determination of those claims, and to establish the right of the plaintiff as receiver to the moneys. It was prosecuted in the form of an action in equity. The relief demanded by the complaint was entirely consistent with the case it presented; that was that the plaintiff should be adjudged entitled to, and to be invested with the property, estate, and credits of the judgment debtor ; that his preceding assignment should be adjudged fraudulent and void as to his creditors ; that the chamberlain should account to him for the debtor’s moneys in Ms hands, and that he should have judgment against the defendants for the moneys received by them. The relief awarded was substantially that which was demanded, the assignment was set aside as fraudulent, and a recovery was had in the relator’s favor, for the amount of the judgment debtor’s money in the hands of the defendant Dusenbury, and upon tMs judgment proceedings for its collection were taken against him under the provisions of the act abolishing imprisonment for debt. The complaint in the receiver’s action neither set forth in terms nor in any manner alluded to any contract existing between himself or the judgment debtor, and the defendant Dusenbury, either as a basis of the liability desired to be enforced and maintained, or otherwise. It was, on the contrary, an action to set aside an assignment made by the judgment debtor, and for an accounting concerning the moneys received by the respective defendants. The defendant, Dusenbury, had received such moneys, claiming to be entitled to them under the authority of the assignment. But it was held that he had no such right, and that the plaintiff as receiver should recover the money. By the provisions of the non-imprisonment- act a party can proceed against the debtor under it, when he has a demand upon which according to the preceding provisions, the debtor cannot be arrested or imprisoned (3 Rev. Stat. 5th Ed. 126, § 6). And the cases in which, by such preceding provisions, the debtor cannot be arrested or imprisoned, are those where the suit shall be brought “ for the recovery of any money due upon any judgment or decree founded upon contract, or due upon any contract express or implied, or for the recovery of any damages for the non-performance of any contract” (Id. § 1). The prohibition against arrest and imprisonment contained in this section was' not confined to what were understood to be actions at law for the recovery of moneys clue upon or for breach of a contract, but it also included actions in courts of equity. And where they were founded upon an express or implied contract, there the debtor, according to the express language of this section, could not be imprisoned upon any execution issuing upon the decree. It was not necessary, under these provisions of the statute, that a contract should be averred as the foundation of the plaintiff’s action, in order to exonerate the defendant from arrest and imprisonment. But it was sufficient for this purpose that this suit should be for the recovery of money, due upon contract, express or implied. And from the facts, imperfectly stated in the complaint as they were, it could readily be seen that an implied contract existed in law for the payment of the moneys received by the defendant Dusenbury to the receiver, in case he had no right to receive and hold them upon the ground claimed by him. As the facts turned out, the moneys were received by the defendant Dusenbury without right, and consequently for the use of the receiver. And the law, therefore, implied a promise against him to pay them over, as the judgment directed that it be done (Admr. of Dumond v. Carpenter, 3 Johns. 183; Buell v. Broughton, 2 Den. 91; Cobb v. Dows, 6 Seld. 335, 341). The action was not one in which the defendant could be imprisoned upon an execution, for the reason that it was an implied contract against him, and therefore he could be proceeded against under the non-imprisonment act. The action might have been prosecuted in a different form, but as it was not, that fact cannot affect the plaintiff’s right to maintain this proceeding. No wrongful act was alleged as the foundation of the action, beyond the circumstances showing that the money had been procured without any actual right to it. And the judgment proceeded upon the same theory ; so far as it was recovered against Dusenbury. It was simply that the plaintiff recover against him personally, with costs, the snm adjudged to be in his hands. All conformed to the theory that the liability enforced was for money received by him, under the claim of authority to act under the assignment. He had no such authority, and when the assignment was set aside as fraudulent it followed that he must account for and pay over the money he had received. And the law implied a promise against him that he would do so. [The court then examined the competency of the examination, and held as stated in the last two head-notes.] For that reason the order made should be reversed, and further proceedings directed before the judge having cognizance of them. Davis, P. J., and Beady, J., concurred.