Cargill v. Kountze

• Decision Date: 24 June 1893
• Citation: 22 S.W. 1015
• Parties: CARGILL et al. v. KOUNTZE et al.
• Court: Texas Supreme Court

22 S.W. 1015

CARGILL et al. v. KOUNTZE et al.

Supreme Court of Texas.

June 24, 1893.

Error from court of civil appeals of first supreme judicial district.

Bill by Kountze Bros. against Frank Cargill and Edward L. Dennis to compel defendants to make a discovery of their

assets. From a judgment of the court of civil appeals (22 S. W. Rep. 227) reversing a judgment dismissing the bill on demurrer, defendants bring error. Reversed.

The other facts fully appear in the following statement by GAINES, J.:

This suit was brought by Kountze Bros., alleging themselves to be creditors of Cargill & Dennis, to compel the latter to make discovery of their assets. After stating that the plaintiffs had obtained a judgment against the defendants for $1,054; that they had sued out executions, which had been returned "No property found;" and that they had caused an abstract of the judgment to be filed in the office of the clerk of the county court of Harris county, so as to secure a lien upon the real estate of defendants in that county, — they proceed, in their petition, to make the following allegations: "And your petitioners represent that, shortly before the recovery of said judgment against Cargill & Dennis, they, the said Cargill & Dennis, were, and for several years previous thereto had been, and are now, engaged in divers money-making and speculative enterprises and transactions, and your petitioners are informed and believe that, in the course of such business pursuits of the said Frank Cargill and E. L. Dennis, divers persons became indebted to them to a large amount, and that the defendants. Cargill & Dennis, have, at the time of filing this, your petitioners', bill of complaint, debts due to them, and for which they hold divers securities and evidences to a large amount, and have divers goods, wares, and merchandise, or other articles of personal property, which belong to them, or in which they are in some way beneficially interested, and that they have equitable interests and things in action, of some kind or nature, which might or ought to be applied to the payment of your petitioners' said judgment against them, the defendants, Cargill & Dennis. And your petitioners further represent that the defendants. Frank Cargill and E. L. Dennis, more especially E. L. Dennis, are owners of, or in some way or manner beneficially interested in, some real estate in this or some other state or territory, or some chattels real, of some name or kind, or in some contract or agreement relating to real estate, or rents or issues and profits of some real estate, and also that the defendants are the owners of, or in some way or manner beneficially interested in, the stock of some company, incorporated or unincorporated, or in the profits of some company or copartnership, and also that they have in their possession at the time of filing this, your petitioners', bill of complaint, some money or bank bills, or that they have money deposited in some bank or elsewhere to their credit, or that they have money, or securities for the payment of money, held by some other person, in trust or otherwise, for their benefit. And if the defendants, Frank Cargill and E. L. Dennis, have made any sale or assignment of their property or effects, or any part thereof, your petitioners expressly charge that they believe that such sale, transfer, or assignment is merely colorable, and made with the view of protecting the property or effects of the defendants, so assigned, and placing the same beyond the reach of your petitioners' said judgment, and to enable the defendants to control and enjoy the same, and the avails thereof, and that it would so appear if the defendants, Frank Cargill and Edward L. Dennis, would state and set forth when and to whom such sale, transfer, or assignment was made, and what was the amount, in value, of the property and effects assigned, sold, or transferred, and what were the terms and conditions upon which such sale, transfer, or assignment was made, and what disposition had been made of the property or effects so sold, transferred, or assigned, and in whose possession the same is now, or what has been done with the avails thereof. And your petitioners claim a full discovery and complete disclosure of all such property and effects and things in action belonging to the defendants, Cargill & Dennis, and all trusts whereby any property, debts, or other effects are held for the use and benefit of the defendants, Frank Cargill and Edward L. Dennis, and of every sale, transfer, or assignment which defendants have made of their property, debts, or other effects, and of the person or persons to whom such assignment, sale, or transfer has been made, the amount and value of the property, debts, or effects so assigned, sold, or transferred, and the trusts or other conditions upon which said sale or assignment or transfer was made, and all the facts and circumstances relating thereto, and particularly what is the situation of the property, debts, or other effects assigned or transferred at the time of the filing of this, your petitioners', bill of complaint. And your petitioners further represent that they have reason to believe, and so charge the facts to be, that the defendants have property, debts, and other equitable interests, things in action, or effects, of the value of more than $1,054, interest and costs, exclusive of all prior just claims thereon, and which your petitioners have been unable to reach by execution on said judgment against said defendants, Cargill & Dennis, and that this, your petitioners', bill of complaint is not exhibited by collusion with the defendants, or with any other person, or for the purpose of protecting the property or effects of defendants, Frank Cargill and Edward L. Dennis, against the claim of other creditors, but for the sole and only purpose of compelling payment and satisfaction of the judgment so as aforesaid recovered by your petitioners against the defendants, Frank Cargill and Edward L. Dennis." The petition concludes with a prayer that each of the defendants be required to disclose, under oath, all their assets, of every description whatever, and that they also be required to answer certain special interrogatories, which are set out therein. The trial court sustained a demurrer to the petition, and dismissed the suit. The plaintiffs having sued out a writ of error, the court of civil appeals reversed the judgment, and remanded the cause. The case comes to us upon a writ of error from this court to the court of civil appeals.

Goldth waite Ewing and H. F. Ring, for plaintiffs in error. Stewart & Stewart, for defendants in error.

GAINES, J., (after stating the facts.)

We are of the opinion that the district court was correct, and that the court of civil appeals erred in its ruling. Broad expressions of eminent text writers would seem to sanction this proceeding. We think, however, the propositions announced by them are not supported by the cases cited, except in a restricted sense.

Mr. Freeman, in enumerating "the objects which may be accomplished by proceedings in equity to obtain satisfaction of a judgment at law," says: "(1) A full and complete discovery may be obtained of all the defendants' assets, and, when discovered, they may be compelled to contribute to the payment of the plaintiff's judgment." 2 Freem. Ex'ns, § 424. A review of the cases cited by the learned author will show that none of them can be held a precedent for a general bill of discovery, like that under consideration. The first is Cresswell v. Smith, 8 Lea, 688. Its nature is shown by the following quotation from the opinion: "The bill must therefore be regarded as filed against the defendant Smith alone, and the question is, can it, in this view, be maintained? The question is a new one in this state, so far as I know, and merits, as I think, a very careful consideration. It will be observed that it is not a bill for the purpose, merely, of compelling the defendant to discover generally whether he owns property, money, or effects for the payment of the debts, in the nature of a `fishing bill.' It is true there is a prayer that the defendant be required to discover whether he owns any property or stock or choses in action, of any character; but the stating part of the bill points out specifically the property about which the discovery is specially sought, and states circumstantially the information upon which it is charged that the defendant owns the property. If the right to discovery and relief in this particular property can be maintained, then that the prayer of the bill is too broad would not be material. We think the prayer is too broad, but that part should be rejected." The opinion then proceeds to hold that the jurisdiction of the court to entertain the bill should be upheld as to the property specially pointed out by virtue of the authority conferred by a statute of the state. Carter v. Hampton, 77 Va. 631, was a bill brought by the creditor of a decedent against the administrators and heirs, to compel a discovery of assets belonging to the estate. Thomas v. Adams, 30 Ill. 37, and Clarke v. Webb, 2 Hen. & M. 8, are cases of the same character. It is well established that such a bill may be maintained, as we shall hereafter show. Gordon v. Lowell, 21 Me. 251, was a suit to set aside a fraudulent conveyance of certain property, specifically described, and to subject it to the payment of the complainant's debt. Lore v. Getsinger, 7 N. J. Eq. 191, was a bill filed under the provisions of the New York statute. Miers v. Turnpike Co., 11 Ohio, 273, was a proceeding against a corporation for the discovery of assets, and specifically pointed out the assets in reference to which the discovery was sought Among other things, it sought to subject unpaid subscriptions to the capital stock to complainant's debt, which is a well-recognized ground for equitable interference. Cadwallader v. Society, 11 Ohio, 298,...