Fox v. Capital Co

• Decision Date: 09 November 1936
• Docket Number: No. 23,23
• Citation: 57 S.Ct. 57,299 U.S. 105,81 L.Ed. 67
• Parties: FOX v. CAPITAL CO
• Court: U.S. Supreme Court

299 U.S. 105

57 S.Ct. 57

81 L.Ed. 67

FOX

v CAPITAL CO.

No. 23.

Argued Oct. 16, 1936.

Decided Nov. 9, 1936.

Mr. Benjamin Reass, of New York City, for petitioner.

Mr. Wm. D. Whitney, of New York City, for respondent.

Mr. Justice CARDOZO delivered the opinion of the Court.

The question in this case is whether there is jurisdiction in the Circuit Court of Appeals to review upon appeal an order fining a judgment debtor for contempt in refusing to submit to an examination in proceedings supplementary to judgment.

Respondent had a judgment against petitioner for $297,412.91 in the United States District Court for the Southern District of New York. Upon default in payment, the creditor began a proceeding supplementary to the judgment, for the examination of the debtor. By the Civil Practice Act of New York (section 774, as added by Laws 1935, c. 630) such a proceeding may be instituted by order of the Court, by subpoena, or by warrant. Respondent resorted to the second of these methods. The judgment debtor having failed to respond to the subpoena, an application was made to punish him for contempt. The Court made an order adjudging the contempt with leave to the debtor to purge himself thereof. Thereafter, upon evidence that the contempt continued, the court made a second order fining the debtor for his contempt in the amount of $235,082.03, then unpaid upon the judgment, and an additional amount of $10,000 to be paid to the attorneys of the judgment creditors for the costs of the proceeding. A warrant was to issue to the Marshal whereby the debtor was to be confined in jail until payment of the fine, with the proviso, in substance, that except for the costs of the proceeding, $10,000, the fine would be remitted upon submission to the subpoena. From the two orders so made the debtor appealed to the Circuit Court of Appeals for the Second Circuit, where the appeal was dismissed. To settle the practice in a situation likely to recur, this Court granted certiorari, the review to be 'limited to the question of the jurisdiction of the Circuit Court of Appeals.'

A proceeding for the examination of a debtor as a supplement to judgment or execution is a summary substitute for a suit in equity by a creditor for the discovery of assets. In re Boyd, 105 U.S. 647, 651-653, 26 L.Ed. 1200; Leroy v. Rogers, 3 Paige (N.Y.) 234; Hadden v. Spader, 20 Johns. (N.Y.) 554, 565; Scoville v. Shed, 36 Hun (N.Y.) 165, 167. It continues 'until closed or discontinued by consent or discontinued, dismissed or closed by order of the court.' New York Civil Practice Act, § 802, subd. 1, as added by Laws 1935, c. 630; Steinman v. Conlon, 208 N.Y. 198, 101 N.E. 863; Hand v. Ortschreib Building Corporation, 254 N.Y. 15, 171 N.E. 889. It 'shall be deemed closed two years from the service of the order, subpoena or warrant' initiating it, unless extended by order for a definite period. Section 802, subd. 1. It may be closed within that time upon a showing by the debtor of unreasonable delay. Section 802, subd. 3. The relief appropriate to the proceeding includes the appointment of a receiver, or a decree for the payment of money or the delivery of property. Steinman v. Conlon, supra, 208 N.Y. 198, at page 202, 101 N.E. 863. The imposition of a fine for the refusal of the debtor to appear or answer is not a substitute for such relief or for adequate discovery. Despite the contempt or the penalties therefor, the proceeding may continue until its aim has been achieved.

The rule is settled in this Court that except in connection with an appeal from a final judgment or decree, a party to a suit may not review upon appeal an order fining or imprisoning him for the commission of a civil contempt. Doyle v. London Guarantee & Accident Co., Ltd., 204 U.S. 599, 27 S.Ct. 313, 51 L.Ed. 641; In re Christensen Engineering Co., 194 U.S 458, 24 S.Ct. 729, 48 L.Ed. 1072; Hayes v. Fischer, 102 U.S. 121, 26 L.Ed. 95; Worden v. Searls, 121 U.S. 14, 25, 7 S.Ct. 814, 30 L.Ed. 853. The appellant in the court below, the petitioner before us here, was a party to a suit or proceeding for the discovery of assets. There is no occasion to consider how far his rights and remedies would be different if he had been a stranger to the record, a witness or an adverse claimant. Nelson v. United States, 201 U.S. 92, 115, 26 S.Ct. 358, 50 L.Ed. 673; Alexander v. United States, 201 U.S. 117, 122, 26 S.Ct. 356, 50 L.Ed. 686. Not only was he a party; he was a party to a proceeding then in its initial stages. Discovery was in abeyance, and what the final relief would be was still a subject for conjecture. This sufficiently appears from the statement already made as to the function and duration of a proceeding supplementary to judgment. Finally, the contempt charged and...