Skinner v. Judson

A court of chancery will generally compel a discovery, in aid of a suit at law, where the leading circumstances rest in the knowledge of thu defendant. And it makes no difference whether the action, in aid of which a discovery is sought, be founded in contract or in tort. A court of chancery will compel a discovery to detect fraud and imposition, and to set aside a fraudulent conveyance. But no person is obliged to answer matter of scandal; which imports that infamy which arises from crime, in contradistinction to the reproach resulting from a private fraud. No person is obliged to disclose facts, which may subject him to a forfeiture or penalty. But if the forfeiture or penalty is waived, by those who are entitled to it, or is barred by the statute of limitations, it no longer shields the party from a discovery. Therefore, where a party received a deed of land, without consideration and in trust for the grantor, went into possession, and being sued in ejectment for the land, defended under such deed; on a bill of discovery, brought by the plaintiff against the defendant in ejectment, in aid of that action, after the lapse of more than one year from such conveyance, it was held, 1. that this transaction would ordinarily subject the defendant to the penalty of the statute; 2. that such liability, while it subsisted, would protect the defendant from a discovery of the facts on which it was founded; and 3. that after the penalty was barred by the statute of limitations, a discovery might be enforced. It is no ground of demurrer to a bill of discovery, that a third person is acquainted with the facts sought after; but the exception must be taken the hearing, where the competency and credibility of such person as a witness, may be thoroughly sifted. A bill in chancery, seeking relief, not against, but in aid of, a cause depending in the superior court, must aver the matter in demand to be more than 335 dollars, to bring it within the jurisdiction of the superior court. Therefore, where a bill of discovery was brought in aid of an action of ejectment, not containing such averment, but shewing that the land demanded had been set off to the plaintiff on execution for less than 100 dollars; it was held, that the superior court had not jurisdiction.

IN ERROR. This was a bill in chancery, brought by Skinner against Judson, for a discovery, to be used as evidence in an action of ejectment between the same parties, depending in the superior court. The bill stated, that the plaintiff, being a creditor of John Smith, in January 1829, obtained a judgment against him for 81 dollars, 17 cents; that soon afterwards, he caused an execution, issued on that judgment, to be levied on a piece of land in Woodbridge, belonging to Smith, which was appraised at 90 dollars, 78 cents, and duly set off to the plaintiff; that to obtain possession of it, he has since brought an action of ejectment against Thomas Judson, the present defendant, which is now depending in the superior court; that some time previous to the levy, viz. in March 1826, Smith, being insolvent, gave a deed of the same land to the defendant, without consideration, and with intent to avoid the plaintiff's debt and the demands of his other creditors, and upon the agreement, that the defendant should hold the land in trust for the plaintiff, or some part of his family; that the defendant soon afterwards went into possession of the land, and has ever since remained in possession; that the transaction between Smith and the defendant, respecting the land and deed, was secret; in consequence of which the plaintiff is unable to prove the facts before stated. The bill was brought in March, 1831. The parties joined in a demurrer to the bill; the superior court sustained the demurrer; and, on motion in error, by the plaintiff, the case was brought before this Court for revision. after adverting to the general rule, that a party is entitled to a discovery of matter necessary to enable him to prosecute or defend an action at law; (3 Bla. Comm. 436,7. 1 Madd. Chan. 162. Mayor &c. of London v. Levy, 6 Ves. 404.) and that it is not material whether the action in aid of which the discovery is sought, be founded in contract or in tort; (Com. Dig. tit. Chancery. 3 B. 1. East-India Company v. Sands, 1 Vern. 129. Cage v. Warner, Hardr. 182. Langley v. Brown, 2 Atk. 204. Thorp v. Macauley, 5 Madd. Chan. Rep. 135.) there being no distinction between actions in form ex contractu and those founded on property in form ex delicto; and remarking, that the defendant is bound to disclose or protect himself, by shewing, that he comes within some of the established exceptions to the general rule; contended, that the defendant was not protected from a discovery, on the ground, that the facts charged in the bill would expose him to a forfeiture. In the first place, the fraudulent contract contemplated by the 2d section of the statute against fraudulent conveyances, (Stat. 147.) is not a contract constructively fraudulent as being without consideration, but it imports an intentional fraud. Doe d. Watson & al. v. Routledge, Cowp. 710. per Ld. Mansfield. Doe d. Otley v. Manning, 9 East 63. per Ld. Ellenborough. The objection, therefore, that the defendant, in the present case, by disclosing the fraudulent agreement, would expose himself to a forfeiture, is applicable only to that part of the bill, which charges him with taking the deed, knowing of Smith’s insolvency and with the intent to avoid the plaintiff’s debt. A conveyance merely voluntary not exposing the parties to the forfeiture provided by the 2nd section, the defendant was bound to answer all those charges in the bill, which do not impute to him direct intentional fraud. The demurrer, being to the whole bill, is, therefore, bad, and must be overruled. Muntford v. Taylor, 6 Ves. 788. The Attorney General v. Duplessis, Parker 144. The Attorney General v. Brown, 1 Swanst. 305. Harrison v. Southcote, 1 Atk. 528. Kimberly v. Sells, 3 Johns. Chan. Rep. 471. Secondly, a recovery of the forfeiture, (if any were incurred, by the facts charged in the bill,) being barred, by the statute of limitations, the reason of the exception ceases, and with it the exception. A recovery of that forfeiture can now no more be had than if the statute had been repealed. Williams v. Farrington, 2 Cox, 202. S. C. 3 Bro. C. C. 39. Parkhurst v. Lowten, 1 Meriv. 390. The Attorney General v. Cresner, Parker, 279. The case of Northrop v. Hatch, 6 Conn. Rep. 381. is not an authority against this position. The discovery there sought would have been immaterial, inasmuch as the bill did not show, that the plaintiff had any title to the land. It was upon that ground, that the decision of the court proceeded; the opinion expressed upon other points being extra-judicial. Thirdly, the defendant is not within the exception, which protects a party from the discovery of matter of scandal, or, as the expression in the books generally is, what would render him infamous; the terms scandalous and infamous, with reference to this subject, importing the same thing.—It ought to be premised, that so far as the present bill charges the defendant with taking a deed without consideration, and in trust for Smith, it does not, either expressly or by legal inference, reflect on his integrity. But charges in a bill of conspiracy, combination and fraud, must always be explicitly and fully answered, if required. The distinction is between charges, which impute a crime—a public offence—and a private fraud: as to the former, the defendant is protected from answering; the latter he must always disclose. Chetwynd v. Lindan, 2 Ves. 450. Parkhurst v. Lowten, 1 Meriv. 390. Bulkley v. Dunbar & al. 1 Anslr. 37. Deloraine v. Brown, 3 Bro. C. C. 633. Bicknell v. Gough, 3 Atk. 558. Lonsdale v. Littledale, 2 Ves. jun. 451. King v. Martin, 2 Ves. jun. 641. Cartwright v. Green, 8 Ves. 405. Hendricks v. Robinson, 2 Johns. Chan. Rep. 283. Sharp v. Sharp, 3 Johns. Chan. Rep. 407. Brinckerhoff v. Brown, 6 Johns. Chan. Rep. 139. contended, 1. That the plaintiff was not entitled to the discovery sought; first, because it would expose the defendant to a forfeiture. The bill charges the defendant with having taken the deed, not only without consideration, but with intent to defraud the plaintiff and the other creditors of Smith; and with having gone into possession of the land, under that deed; from which, it is averred, he is now holding out the plaintiff. These facts, if proved, are sufficient to subject the defendant to the penalty of the statute against fraudulent conveyances, Stat. 247. Now, that the law will not compel a party to disclose such facts, is well settled, Hinde's Chan. 40, 41. Mitf. 160. 1 Madd. Chan. 214, 2 Swift's Dig. 226. Franco v. Bolton, 3 Ves. jun. 368. The United States v. The Saline Bank of Virginia, 1 Pet. U. S. Rep. 100. 104. Mc Intyre & al. v. Mancius & al. 16 Johns. Rep. 592. But the rule goes further, The defendant is not obliged to answer, if his answering may subject him to a penalty: it not being requisite for his protection, that it must so subject him. Harrison & ux. v. Southcote, 1 Atk. 539, This meets the argument derived from the lapse of time, in this case, since the penalty was incurred. The defendant may be subjected to the penalty, after the statute of limitations has run; as by his counsel not pleading it. Besides, the statute of limitations is not a bar, but only a suspension of the remedy. Hinde's Chan. 39. And if it were, it does not appear from the plaintiff's bill, that the defendant can avail himself of it for his protection; for the defendant may have been absent from the state ever since the penalty was incurred; and in such a case, the statute does not run. Stat. 311. tit. 59. s. 8. Northrop v. Hatch, 6 Conn. Rep. 361. ought to be considered as setting the law on this point. Secondly, the defendant is protected from a discovery, be cause he is called upon to disclose a matter of scandal. 1 Madd. Chan. 173. Franco v. Bolton, 3 Ves. jun. 368. 372. Thirdly, a discovery will not be compelled in aid of a suit at law for a tort. 2. That if the statute of limitations is a bar, so as to remove the protection, the bill is insufficient, because the plaintiff has adequate remedy at law; for John Smith, the grantor, in that case, is a competent witness, and obliged to testify; and if he is chancery will not interfere. Gelston & al. v. Hoyt, 1 Johns. Ch. Rep. 543. Duvals v. Ross, 2 Munf. 290. Bass v. Bass, 4 Hen. & Munf. 478. Pollard & al. v. Lyman & al. 1 Day 165. 3. That whether John Smith is a competent witness or not the bill is insufficient, for want of an averment that the facts sought to be disclosed were exclusively within the knowledge of the defendant.