H. G. Middleditch, Tr. in Bankr. of Charles F. Herrick Carriage Co. v. Jonah Kalanianaole & Kapiolani Estate, Ltd.

• Decision Date: 11 March 1907
• Citation: 18 Haw. 272
• Parties: H. G. MIDDLEDITCH, TRUSTEE IN BANKRUPTCY OF CHARLES F. HERRICK CARRIAGE CO., LTD., v. JONAH KALANIANAOLE AND KAPIOLANI ESTATE, LTD.
• Court: Hawaii Supreme Court

18 Haw. 272

H. G. MIDDLEDITCH, TRUSTEE IN BANKRUPTCY OF CHARLES F. HERRICK CARRIAGE CO., LTD.,

v.JONAH KALANIANAOLE AND KAPIOLANI ESTATE, LTD.

Supreme Court of the Territory of Hawai‘i.

Argued March 4, 1907.

Decided March 11, 1907.

APPEAL FROM CIRCUIT JUDGE, FIRST CIRCUIT.

Syllabus by the Court

It seems that a judgment at law and return of execution unsatisfied should ordinarily be shown in order to sustain a creditors' bill under our statute as well as under the general rules of equity although not under the Massachusetts statute from which ours was taken, but, if not, it is necessary to show at least that the defendant has not property within the Territory liable to execution out of which the debt may be satisfied.

Counsel fees unreasonably incurred to obtain a dissolution of an injunction should not be allowed as damages under the injunction bond.

A. S. Humphreys for plaintiff.

C. W. Ashford for defendants.

FREAR, C.J., HARTWELL AND WILDER, JJ.

OPINION OF THE COURT BY FREAR, C.J.

This is a bill in equity by the trustee in bankruptcy of a corporation to enforce the payment of a note given to that corporation by the defendant Kalanianaole on September 8, 1902, for $518 payable six months thereafter with interest at 7 per cent. and to meanwhile have held and ultimately applied to the payment of such decree as might be obtained on the note certain shares of stock held by the said defendant in the defendant corporation, the Kapiolani Estate, Ltd. The circuit judge held that equity was without jurisdiction and dismissed the bill. The plaintiff appealed.

It is not alleged that judgment at law has been obtained on the note or that execution has been issued and returned unsatisfied. It is sought to obtain a decree directly in equity upon the note and then to have applied towards its payment the stock in question. It is conceded that this cannot be done under the general rules of equity relating to creditors' bills, but it is contended that it may be done as a special statutory right under the equity act of 1878 (Ch. 15), now embodied in the Revised Laws (Ch. 121), which was taken from the Massachusetts statutes (Mass. Gen'l. Sts., c. 113.) It is further contended that the statute must be thus construed here because it was so construed in the state of its origin, as shown by Lord v. Harte, 118 Mass. 271, and the earlier cases there cited,–under the rule that when a statute is adopted from another jurisdiction the construction placed upon it by the courts of that jurisdiction prior to such adoption should also be adopted.

The statute (R. L., Sec. 1834) confers upon circuit judges equity jurisdiction in all cases therein mentioned “when the parties have not a plain, adequate and complete remedy at the common law,” and mentions among other classes of cases “bills by creditors to reach and apply in payment of a debt, any property, right, title or interest, legal or equitable of a debtor, within this Territory, which cannot be come at to be attached or taken on execution in a suit at law, against such debtor.” Although corporation stock may now “be come at to be attached” in an action at law (L., 1905, Act 84, Sec. 9, Subd. 3), neither it nor any other property can be reached by attachment except under certain conditions which must be alleged under oath (Id., Sec. 3), which apparently cannot be done in the present case. The question then presents itself whether judgment at law and return of execution unsatisfied are prerequisites to the bringing of a creditors' bill under this statute as it is in equity in the absence of statute.

The first departure in Massachusetts from the application of the ordinary equity principles relating to creditors' bills in the construction of this statute was made (in Silloway v. Columbia Ins. Co., 8 Gray 199) at a time when this particular provision of the statute as originally enacted there (St. of 1851, c. 206) differed to some extent from the form in which it appeared when it was adopted in Hawaii, but perhaps that is unimportant. This court, however, has taken a very different view of the statute as a whole, ever since its adoption, from the view taken of it by the supreme judicial court of Massachusetts. There the statute is regarded as a grant of additional powers of an equitable nature to courts of law and was construed without much regard to the rules of general equity jurisdiction established in English practice. Here, on the other hand, it has been treated merely as declaratory, as far as it goes, of the jurisdiction already possessed by judges sitting in chambers as distinct courts of equity, who in that capacity previously possessed full equity jurisdiction as established in English practice. See Hawaiian Com. & Sug. Co. v. Waikapu Sug. Co., 8 Haw. 449; Dole v. Gear, 14 Haw. 554, 560. In the earlier of these cases, for instance, the court said: “The statute of 1878 has not enlarged the equity jurisdiction of the justices of the supreme court. They had full equity powers conferred upon them by section 847. The statute of 1878 makes clear many subjects of equity jurisdiction which, without the statute, might be disputed.” Again, the plaintiff concedes that the defendant is entitled to a jury trial of the claim upon the note, but contends that a jury trial may be had in equity and that in a case like the present, in which the claim is legal, the verdict of the jury may properly be regarded as binding upon the judge and not merely advisory as in other cases. But, while a jury trial might be had in a case of this kind in Massachusetts in the law courts to which the statute granted additional powers of an equitable nature, it could not be had before our circuit judges sitting in equity. It would be contrary to all precedent as well as the express and implied provisions of our statutes relating to circuit judges at chambers. As stated in the case just quoted from, “the jurisdiction in equity thus conferred is of necessity ‘in chambers.’ There is no jury impaneled to try the issues of fact.” In Byrne v. Allen, 10 Haw. 668, 670, the court, after saying that the bill was a creditors' bill provided for...