Hentz v. Delta Bank

Whitfield, J.,

delivered the opinion of the court.

The bill charges, not as clearly as might be wished, but sufficiently, we think, that Hentz & Co. fraudulently combined with Blake to aid him in putting the dividends beyond the reach of appellee, and to aid Blake in defrauding appellee; and that the appellants knew all this when they took the transfer of the stock. We think the bill stated a good ground for relief along this line. It is well settled, of course, in this state that when a bill charges fraud, that is material, and which, if true, entitles to relief, the respondent should answer denying the fraud. He may then demur, if the demurrer be limited to other separate and distinct parts of the bill, setting up equitable grounds for relief disconnected from the fraud.

In such case, if the demurrer be sustained, the parts of the bill demurred to, unless amendment be allowed, will be dismissed and the issue fought out on the relief prayed on the ground of fraud. 6 Am. & Eng. Enc. PI. & Pr., 426. But the demurrers in this case, after the amendment of them seek *433 ing to avoid the rule that when an answer denies the fraud a general demurrer to the whole bill is overruled by the answer, still remained general demurrers, because, among other grounds, they challenged the jurisdiction of the court over the person of Blake and Hentz & Co., and also over the stocks, the subject-matter of the suit. That such a demurrer is a general one, is settled. 1 Beach’s Mod. Eq. Pr., sec. 231. The demurrers being general, therefore, even after the amendment, we cannot, in the present state of the pleadings, notice the propositions set up, as that a general creditor at large, without lien, cannot file a bill to redeem, which would have been passed on had the demurrers been properly limited to these grounds only. The action of the court was correct in overruling the demurrers. 6 Am. & Eng. Enc. PL & Pr., 414; 40 Miss., 606 ; 23 Miss., 304 . As the fraud is material, Hamilton v. Lockhart, 41 Miss., 460 , does not apply.

It is insisted that the learned special chancellor erred in overruling the motion to dissolve the injunction, because, though answers under oath were waived, the answers, it is said, could still be used as evidence on the motion to dissolve. 2 High on Injunc., secs. 1587, 1612, are cited to support this. The cases referred to in these section are Andrews v. Knox Co., 70 Ill., 65 ; Manchester v. Dey, 6 Paige, 295 ; Lockhart v. Troy, 48 Ala., 579 . The text refers to no rule of court nor to any statute, and, it is evident, is only stating what the general equity practice was in the absence of such statute or rule. That general practice was that, though answers under oath were waived, yet, if the answers were under oath, in the absence of such statute or rule of court, the complainant could not prevent the respondent from using them as evidence, not only on a motion to dissolve, but on the hearing. 1 Am. & Eng. Enc. Pl. & Pr., p. 949, note (9); 1 Beach on Mod. Eq. Prac., sec. 356, p. 382, note (5). The similar statement in 1 Beach Mod. Eq. Prac., sec. 388, is also of the general rule, in the absence of a rule of court or a statute. He cites Walker v. Hill, 21 N. J. Eq., 191. *434 Now, Manchester v. Dey rested upon a rule of court. Walker v. Hill rests upon an express statute, providing that such sworn answer, though oath had been waived, shall be evidence on a motion to dissolve. Ch. Acts N J. (Ridley Comp.), 21, sec. 23. Troy v. Lockhart held that an unsworn answer could be used on a motion to dissolve, though oath had been waived, on the alleged ground that “the sole effect of such waiver was to dispense with the necessity which would otherwise exist of requiring two witnesses to overcome the answer.” The editor of 10 Am. & Eng. Enc. PI. & Pr., p. 1015, note 2, shows that the decision is unsound, and it was overruled in Hart v. Clark, 54 Ala., 493 , as pointed out in the annotated code of Alabama of 1896, p. 286, § 679.

The question here is, what is the rule now under § 534, code of 1892? The process of change from the general equity practice, by statutes, has been rapidly developed. Most of these statutes provided that, where answer under oath is waived, in cases where the bill is not filed for discovery only, the answer shall have “no more weight as evidencé than the bill,” but further expressly provide, as deeming it necessary to so provide, that the answer -in such case may be used as evidence on motions to dissolve injunctions, discharge receivers, and other incidental motions. See, for the statutes of the different states, and decisions construing them, 10 Am. & Eng. Enc. PI. & Prac., p. 1073, et seq., and lb., vol. 1, p. 949, et seq. Our statute, if its letter is to govern, embraces bills for discovery, and it is stringent in the declaration that the answer, sworn or unsworn, shall not be evidence. And again, unlike the statutes above referred to, it contains no exception providing that it does not take from the sworn answer in such case— where the oath was waived—all value as evidence on a motion to dissolve, etc.

The editor of the Am. & Eng. Enc. PI. & Pr. (vol. 10, p. 1073, note 2) says that “the statute of Alabama permitting the plaintiff to waive an answer, and the defendant to answer, *435 without an oath, seems to have been intended merely to affect the rules of evidence on the final hearing. ’ ’ He is speaking of the statute when Troy v. Lockhart was decided. But that statute simply provides that the answer shall have no more weight as evidence than the bill. And the thirty-second rule of chancery practice in Alabama (code of 1896, p. 1209) now provides that the sworn answer, in such case, may be used as evidence on a ‘ ‘ motion to dissolve an injunction or to discharge a ne exeat. ”

As shown, we have no such rule of court, and no exception in our statute saving the right to use the sworn answer, on a motion to dissolve an injunction, where oath has been waived, and the letter of the statute embraces all bills, and says the ££ answer, sworn or unsworn, shall not be evidence. ’ ’

Without now deciding—as unnecessary to decision—that, with us, the sworn answer cannot be used as an affidavit, or as evidence on motions to dissolve, it is sufficient to say that, under the principles of Madison County v. Paxton, 56 Miss., 679 , and Jones v. Brandon, 60 Miss., 556 , the chancellor did not abuse his discretion, under the pleadings here, in retaining the injunction till the hearing.

Affirmed.