Summary
In Morewood v. Hollister (6 N.Y. 309) a certiorari was brought under the statute (2 R.S. 49, § 47) to review proceedings for the discharge of an insolvent, and it was held, that the court could examine and correct any erroneous decision upon a question of law.
Summary of this case from The People v. the Board of PoliceOpinion
April Term, 1852
C.A. Mann, for appellants. S. Beardsley, for respondent.
The 47th section of the act, under which the petition of the insolvent in this case was presented, provides, that "whenever any authority shall be exercised by any officer, "pursuant to any provisions of this title, the proceedings may "be removed into the supreme court by certiorari, and there "examined and corrected." Whenever an adjudication is made by the officer, upon any question of law or fact, it is hardly necessary to say, that he exercises an authority; and when this is done, the proceedings may be removed, by the express provisions of the act, to the supreme court, for review and correction.
The term "proceedings," in its more general sense in law, means all the steps, or measures, adopted in the prosecution or defense of an action. ( Webster's Dict.) It may mean more than the record history of the case, which was the definition of the learned counsel for the defendant. It is, undoubtedly, sometimes used in this restrictive sense. In its ordinary acceptation, the word, when unqualified except by the subject to which it is applied, includes the whole of the subject. Thus the proceedings of a suit embrace all matters that occur in its progress judicially. Proceedings upon a trial, all that occurs in that part of the litigation.
The subject specified in the section under consideration is, "an authority exercised by the court or officer, pursuant to any "provisions of the title." The " proceedings," by which I understand all the matters connected with, or attending the exercise of the power, which are necessary to enable the court of review to determine its validity and correctness, may be removed by the writ, and examined.
The authority and duty of the supreme court, therefore, to review and correct all errors, in matters of law, committed by an officer, in the exercise of this extraordinary jurisdiction, cannot be justly questioned. This is all that is necessary to the determination of the present case. It is singular that the right should ever have been doubted.
The power to discharge a debtor from all obligation to his creditors, without satisfaction, and against their consent, is one of the most delicate and important that can be conferred upon any tribunal.
That its exercise should have been committed to a county officer, without any mode of correcting his errors, except those relating to his jurisdiction, or appearing upon the record; thus making his adjudications upon all questions of law, arising upon evidence, or without it, conclusive; would be an act of improvidence upon the part of the legislature, which ought not to be presumed, and of which, as I construe the statute, they have not been guilty.
Such I infer would have been the opinion of the court below, were it not for the adjudications in that court, in Birdsall v. Phillips, (17 Wend. 464,) and Prindle v. Anderson, (19 Id. 396.) These cases arose under the landlord act, 2 R.S. 516.
The 47th section of that statute provided that the supreme court might "award a certiorari for the purpose of examining "any adjudication made in virtue of that act." In opposition to this explicit language, the supreme court determined that the certiorari was confined to questions of jurisdiction, and those arising upon the record. (19 Wend. 396.) These decisions were subsequently reviewed in the court of errors; and in Anderson v. Prindle, (23 Wend. 616,) the chancellor, in delivering the opinion of the court, remarked, that "the legislature "intended to give the supreme court full and competent power "to examine upon the merits every decision of the judge, a quo, "upon a question of law, and to affirm, reverse or quash the "proceedings, as justice may require." (23 Wend. 618.)
In Noble v. Post, (25 Wend. 313,) the counsel for the appellant was stopped by the chancellor, when about to discuss the propriety of sending up testimony in answer to the writ, and informed that such a return was authorized; and the decision in Prindle v. Anderson on the point was referred to, as one in which the court had concurred, at a previous term. No judge dissented, or expressed a doubt as to the construction given to the statute by the chancellor.
It has been urged that the judgments of the supreme court were affirmed in error upon other grounds, and therefore that their decision upon this point was not directly overruled.
This is true; but it cannot be denied that as evidence of the law, those adjucications cannot be regarded as conclusive authority, even in the court in which they were pronounced.
A further question remains. Did the county judge err, in the decision of any question of law, arising upon the proceedings under review?
The 24th section of the statute under which they were commenced, provides, "that if it shall appear, upon the hearing before "the officer, that the insolvent, in contemplation of his becoming "insolvent, or of his petitioning for a discharge, or knowing "of his insolvency, shall have made any assignment, c. of any "of his property, with a view to give a preference to any creditor, "he shall not be entitled to a discharge."
In January, 1845, the defendant executed an assignment of all his real and personal property to trustees, for the benefit of his creditors, giving preference to a very large amount, to certain individuals therein mentioned. Prior to the assignment, judgments had been obtained against the defendant to an amount exceeding $50,000, on some of which executions had been issued, and levied upon his property. All these facts appear upon the assignment, which was read in evidence upon the hearing.
The leading object of these proceedings by the insolvent, was to obtain a discharge from debts, existing at the time of the assignment, and which remained unsatisfied after the disposition of the trust property.
The question is, whether the assignment itself is conclusive evidence of the knowledge of the defendant, that he was at the time insolvent; or that it was executed in contemplation of insolvency, according to the provisions of the sections above quoted.
Insolvency, under the English bankrupt laws, exists when the trader is not in a condition to pay his debts, in the usual and ordinary course of business, although his estate may ultimately prove sufficient to discharge them. ( Shone v. Lucas, 3 Dowl. Ryland, 218.) Under a statute of the United States, giving a preference to the goverment in certain cases, insolvency signifies the situation of a person who has done some notorious act to divest himself of all his property; as a general assignment, or an application for relief under an insolvent law. ( Bouvier's L. Dict, tit. Insolvent, and cases there cited. 1 Peters, 438.) Whatever definition we adopt, a general assignment, according to the spirit of this statute, must be conclusive, both as to the fact of insolvency, and the intent of the debtor.
The design to create a trust of this character, embracing all his estate, is evidence of a belief upon the part of the debtor, of a present inability to pay bis debts, or of an intent to defraud his creditors. ( Van Nest v. Gow, 1 Sand. Ch. R. 8.)
The execution of such an assignment is of itself an act of insolvency of the most unequivocal character. The debtor thereby voluntarily divests himself of all means of payment, and renders it impossible that his creditors at large should obtain satisfaction of their demands, by due course of law. He and they must await the winding up of the trust. If the defendant is chargeable with the necessary consequences of his own acts, when he made up his mind to assign all his property, he contemplated insolvency; when he consummated his purpose, he became insolvent in fact. The statute looks to equality among creditors, in the distribution of the insolvent's estate. The debtor may disregard this salutary principle. He may notwithstanding give preferences. But in the language of the revisers, in their note to this section, "he must make them with "the assent of creditors, or at the hazard of losing the benefit "of the law." The doctrine evidently deducible from the statute is, that a debtor who creates a trust of all his property, in behalf of creditors, giving preference, can never claim a discharge from any debt, existing when the trust was constituted. It is a legal bar, established by the statute, to the relief claimed by the insolvent. This has been disregarded, by the learned judge before whom these proceedings were instituted. He must have decided, not only that the assignment, as a bar, was not conclusive, but that it was not prima facie evidence, against the defendant. There is nothing in the statement made by the insolvent, on his examination, or in the other testimony, to impair in the slightest degree the effect of the assignment as presumptive evidence. He states, on his cross-examination by his counsel, in addition to the facts appearing on the trust deed, that he made the assignment to preserve his property from being sacrificed; that he did not assign in contemplation of insolvency; that he believed he had property, more than enough at an honest valuation to pay his debts; that he believed he should be able to make an arrangement by which all his debts could be paid. He therefore admits, not only that he could not pay his debts in the ordinary course of business, but that his property, if applied as the law would apply it, was insufficient for that purpose; that to prevent this he assigned; that he did not contemplate insolvency, because if his creditors would receive property, at an honest valuation, instead of money, to which they were entitled; and his assignees, instead of converting the trust funds into cash, which he had made it their duty to do, would suffer him to make an arrangement with them, all his debts might be paid.
It is therefore the ordinary case of a debtor swearing to an inference of law, when every fact disclosed by him contradicts his conclusion.
I think, for the reasons suggested, that the judge erred in deciding "that the insolvent had in all things conformed to the "matters required of him by the statute," and "that he should "be disharged from his debts." First, because the assignment abovementioned was conclusive evidence that it was executed by the defendant in contemplation of insolvency: or, if not conclusive, then Secondly, that it was at least presumptive evidence of that fact. That these were questions of law, arising upon facts undisputed, each of which, if raised in an action at law, by a demurrer to the evidence, should have been determined in favor of the opposing creditors.
The judgment of the supreme court should be reversed, and that of the commissioner also, and the proceedings declared null and void.
The point of most importance in this case is, whether in cases of summary proceedings, the supreme court, in reviewing them on certiorari, is confined merely to considerations affecting the jurisdiction and the regularity of the proceedings before the inferior magistrate, or whether it is bound to go farther, and examine upon the merits every decision below upon a question of law.
The tendency of legislation towards summary proceedings has been so great for some time past, and the number of such cases has so greatly increased within a few years, that the late supreme court deemed it necessary to struggle very earnestly to avoid the review of such cases as far as was practicable. That court therefore, in the latter part of its existence, did lay down the rule, that the review should be confined to matters relating only to jurisdiction and regularity of proceedings. But I believe this ruling never met the approval of the profession or of the court of last resort.
The leading case in the supreme court was Birdsall v. Phillips, (17 Wend. 464.) That was a case under the landlord and tenant act, and the questions presented on the argument were, that to give jurisdiction the conventional relation of landlord and tenant must exist; that if the party ever became tenant at will it was by operation of law; that he was in fact tenant for life under a title paramount; together with several objections to the admissibility of evidence. The court held that the regularity of the proceedings not being questioned, and there being no pretense of want of jurisdiction, all these questions related to the merits and would not be reviewed.
The court found it necessary to repeat this ruling many times, and several of the cases in which they did so were cited on the argument and in the opinion of the supreme court in this case. But the doctrine was questioned by the court of errors, in a measure by the late supreme court, and has been held to be otherwise in the present supreme court.
In the case of Anderson v. Prindle, (23 Wend. 616,) where in the supreme court the doctrine of Birdsall v. Phillips had been reaffirmed, the chancellor, who alone delivered any opinion in the court of errors, said that he did not concur in the opinion that the supreme court had no authority to examine the correctness of the decisions of the judge before whom the summary proceedings were had upon questions of law which arose, and were decided in the course of such proceedings. And he held, on the contrary, that the supreme court had full and competent authority to examine, upon the merits, every decision of the judge upon a question of law, and to affirm, reverse or quash the proceedings as justice should require; and that as a necessary consequence to this power, the inferior tribunal must return to that court on certiorari such part of the proceedings as are material to the examination of the case on its merits. ( See also Niblo v. Post's Admrs, 25 Wend. 280.)
The present supreme court, in Buck v. Binninger, (3 Barb. S.C. Rep. 391,) ruled in the same manner.
In the cases of summary convictions the same principle has long been established in the English courts and in our own. ( The People v. Phillips, 5 N.Y. Legal Obs. 130; Paley on Convictions, passim.) The supreme court overlooked that when the case of Birdsall v. Phillips was before them, but their attention was called to it in Simpson v. Rhinelander, (20 Wend. 103,) and the doctrine was admitted in these words: "It must "appear that the party is legally convicted, therefore the evidence "must be regularly set out at large in order that the "court may judge whether the justice has convicted on proper "evidence." But that court say there is a distinction between such convictions and orders and other adjudications.
I confess I am at a loss to discover what the distinction is, where it begins or ends, or on what principle it is founded.
The reason of the rule applies as well in one case of a summary proceeding as another. It is, that the accused may have the opportunity of reviewing the judgment against him and of ascertaining whether he has been justly condemned; and without some such opportunity infinite injustice and oppression may be perpetrated by proceedings not in conformity to the common law, but in derogation of it.
The difficulty has been increased and the error perpetuated by the frequent repetition of the remark that a certiorari carries up nothing but the record, and by the recollection of a statute long existing among us, expressly requiring, on certiorari to a justice of the peace in a civil suit, the whole evidence to be returned. And it has hence been inferred that the evidence is never to be returned to a certiorari unless expressly required by statute.
This is a great mistake, for it has been the practice a great many years, in removing summary proceedings by certiorari, to require the evidence to be set out, so far, as, in the language of the court for the correction of errors in Anderson v. Prindle, may be material to the examination of the case on the merits. That can be done only by the magistrate before whom the proceedings are originally had, making up a record containing those facts, so that when the certiorari shall carry up only the record, it shall of course take with it the facts necessary to a determination of the case, upon all the points properly examinable on review.
The question what the record shall contain has frequently been before the courts, and in cases of summary convictions, it is well settled both in England and in this country, that it must be a memorial of all the proceedings that have taken place up to and including the judgment; and must contain an information or charge against the defendant, a summons or notice, in order that he may appear and make his defense, his appearance or non-appearance, his confession or defense, and so much of the evidence as is necessary to sustain the charge or defense. ( Paley on Convictions, 65; 1 Ward's Justice, 705; 2 Robinson's Justice, 542; Brackett v. The State, 2 Tyler, 167; Powers v. The People, 4 John. 292; The People v. Miller, 14 Id 371.)
It will not be sufficient to state that "the offense was duly "and fully proved;" for that is to state the result of the evidence and not the evidence itself. ( Rex v. Reed, Doug. 490; Rex v. Lovett, 7 T.R. 122.) And the whole evidence which applies to the charge must be set out that the court may judge whether sufficient proof appears on the face of it, to sustain every material allegation and to justify the adjudication. ( Rex v. Killett, 4 Burr. 2063; Rex v. Vipont, 2 Id. 1165; 2 Rob. Jus. 550; R. v. Lloyd, 2 Str. 999; R. v. Theed, Id. 919; R. v. Smith, 8 T.R. 588; R. v. Whanford, 5 Id. 489; R. v. Dove, 3 B. Ald. 596; R. v. Taylor, 2 Chit. R. 578; Commonwealth v. Hardy, 1 Ashmead, 411; Mayor v. Mason, 4 Dall. 266; Cumming's case, 3 Greenl. 51.)
That the design of the record is not merely to state the fact of the judgment, but to show that the proceedings required by justice had been regularly observed, and the sentence legally supported by evidence, is every where evinced by the language and sentiments of the ablest judges from the time of Lord Holt, who himself, on all occasions, regarded the obligation of recording the whole proceedings as a necessary counterpoise against the liability to error or misapplication to which a private and discretionary tribunal is naturally exposed. ( Intro. to Paley on Conv. 33.)
The same principles which pervaded the English courts before the revolution, have been regarded in our own courts since that event. And it has frequently occurred to our courts, in view of the manifold dangers arising from the exercise of a summary and arbitrary jurisdiction, that it was the more necessary for them to assert and maintain the principles on which personal liberty is dependent.
The supreme court of Massachusetts, in Chase v. Hathaway, (14 Mass. R. 224,) take occasion to say, "It is a fundamental "principle of justice, essential to every free government, that "every citizen shall be maintained in the enjoyment of his liberty "and property, unless he has forfeited them by the standing "laws of the community, and has had opportunity to answer "such charges as according to those laws will justify a forfeiture "or suspension of them."
In the State v. Savannah, ( Charlt. 235,) the courts of Georgia hold this language: "In this country no person can be injured, "in his person or property, without an opportunity of defending "himself. He has the right of being confronted with his accusers, "and of being apprised of the accusation against him. " Audi alteram partem, is a maxim of natural justice dear to "the human heart, and associated with every principle of our "jurisprudence. A conviction, founded upon ex parte accusation, "is the most terrible species of despotism that the human "mind can conceive. It is not only a violation of the most obvious "dictates of common law, but it is destitute of every principle "by which the social compact is supported."
In Geter v. Commissioners of Tobacco Inspection, (1 Bay's Rep. 357,) the courts of South Carolina say: "The proceedings "must be as nearly as possible, according to the course of trials "before juries at common law; as these justices or commissioners "are, on these occasions, put in the place both of judges "and juries. The party accused must be summoned; there "must be a specific charge against him; and he must have time "and opportunity of being heard in his defense. The witnesses "against him must all be on oath, agreeable to the rules of law, "and reduced to writing, or at least so much as is necessary to "the conviction. And in cases of conviction, there ought to be "a record of it, under the hands and seals of the justices or "commissioners, in which so much of the testimony must be set "forth, as will bring the offender under the terms of the law, "and evince that they have not exceeded the powers given "them by the law. If this is not done in such convictions, the "common law will break in upon them, and level all their proceedings."
These rules necessarily give the supreme court the opportunity as well as the power to review the proceedings of the inferior magistrate, not only as to jurisdiction and regularity of proceedings, but as to the legality of the judgment which may be pronounced.
The supreme court were wrong in saying, in 20 Wend. 106, that there is such nicety in drawing up penal convictions under the strictness of the common law, that the legislature have in several cases by express enactment prescribed forms omitting the common law requisites. I am not aware that there is any such law on our statute book. It is true that in England such laws have been passed, but only in cases where an appeal has by statute been given to the accused. Where an appeal has not been given, no general form of a record omitting the common law requisites, will I apprehend be found, even in England, where summary convictions number by tens of thousands annually.
At all events, there is no such statute in this state, and the rule requiring a record on a summary conviction to be thus full and particular was a part of the common law at the adoption of the constitution, and is controlling with us until the legislature shall change it.
The rule is not confined to summary convictions, where personal liberty is mainly involved, but extends to all cases of summary proceedings involving property or liberty, and the distinction sought to be established by the supreme court in 20 Wend. 103, between summary convictions and other summary proceedings, as it can find no reason to sustain it in the reported case, so it has none in fact and is not well founded.
I must not be understood to say, that all the proceedings and evidence before the magistrate must be put into the record, as if the adjudication were to be reviewed on a case made on a motion for a new trial, but only so much as will enable the supreme court to exercise its legitimate authority to examine upon the merits, every decision of the magistrate upon a question of law.
Being then authorized in this case to look into the proceedings before the judge who granted the discharge, we find a difficulty in the outset.
G.W. Stanton Son were petitioning creditors for the sum of $242,821,16. That sum consisted of $198,068,88, of general indebtedness, $10,480,56 and $10,471,72 for deficiency on two chancery foreclosures of mortgages, c. and $20,000 balance due on two judgments, c. They did not add to their signature to the petition a declaration, pursuant to the statute, that they relinquished to the assignees to be appointed, such mortgages or judgments for the benefit of all the creditors, and therefore they were not petitioners in respect to the debts so secured. (2 R.S. 36, § 11.)
All then that they actually signed off was $201,868,88, which was less then two thirds of all the debts. And the judge consequently had no authority to grant a discharge.
The judgment of the supreme court must therefore be reversed and the discharge declared to be void.
GRIDLEY, J. dissented.
Judgment of supreme court reversed, and proceedings before county judge annulled.