Hovey v. Elliott

Citation167 U.S. 409,42 L.Ed. 215,17 S.Ct. 841
Decision Date24 May 1897
Docket NumberNo. 255,255
PartiesHOVEY v. ELLIOTT et al
CourtUnited States Supreme Court

A. S. Worthington and Everett P. Wheeler, for plaintiff in error.

John Selden, for defendants in error.

Mr. Justice WHITE delivered the opinion of the court.

The facts out of which this controversy grows are fully stated in Hovey v. McDonald, 109 U. S. 150, 3 Sup. Ct. 136, but we briefly reiterate those which are material to an understanding of the issues now presented.

A. R. McDonald, a British subject, obtained an award from the mixed commission appointed under the treaty of 1871 for the settlement of the 'Alabama claims.' 17 Stat. 863. Before the payment of the award, two suits in equity were commenced in the supreme court of the District of Columbia against McDonald and one William White, to whom it was asserted McDonald had made a fraudulent assignment of his claim. One of the suits was by Thomas R. Phelps, who alleged that he was the owner of the claim as the assignee in bankruptcy of McDonald. The other was brought by Hovey and Dole, who claimed to be entitled to a one-fourth interest in the award in consequence of an alleged contract which they asserted they had made with McDonald, entitling them to an interest, to that extent, for professional services rendered or to be rendered in the prosecution of the claim. Injunctions were issued against the collection by McDonald and White of the fund. In the Phelps suit a consent decree was entered, which was also assented to by the parties in the Hovey and Dole cause, releasing one-half of the award, and authorizing G. W. Riggs, who was appointed receiver, to collect the other half, and retain it to abide the result of both suits. The receiver, moreover, was directed to invest the money by him collected either in registered bonds of the United States or of the District of Columbia guarantied by the United States.

The bills and amended bills were demurred to in each suit, and, the demurrer in both cases being sustained, the bills were dismissed. The decree of dismissal in the Hovey and Dole case, entered on the 24th of June, 1875, simply stated that the demurrer was sustained and the bill dismissed, with costs. On the same day an appeal, without supersedeas, to the general term, was noted on the minutes of the court. This decree was, a few days thereafter, on the 28th of June, amended by ordering the receiver to pay over the funds in his hands, and providing for his discharge. This decree was presented to the receiver; and, in accordance with personal and verbal instructions given him by a judge of the court by which the decree of dismissal was rendered, the receiver delivered the bonds in his custody to McDonald. On the same day the firm of Riggs & Co., supposing that they had a perfect right so to do, purchased the bonds from McDonald at their full market value, and caused them to be transferred into their name. The decree of dismissal in the Phelps case, which was also appealed from, was affirmed by the general term of the supreme court of the District, but that in the case of Hovey and Dole was reversed. The latter case was put at issue by filing an answer averring fraud and wrongdoing on the part of Hovey and Dole, the answer alleging facts which, if found to be true, would have defeated a recovery by the complainants. After replication, testimony was taken at various times during the years 1875 and 1876.

In June, 1877, the complainants obtained an order from the supreme court of the District of Columbia at general term, requiring the defendants McDonald and White to 'pay over to the registry of the court' the sum of $49,297.50, which had been paid them by the receiver. This order was disobeyed, and thereupon the complainants, in September, 1877, moved the defendants McDonald and White to show cause 'why they and each of them should not be punished for disobedience of the order as for a contempt.' On December 8, 1877, the supreme court of the District of Columbia made a decree at general term that 'the rule upon the defendants to show cause why they should not be decreed to be in and punished as for a contempt of court, etc., be made absolute, and that the said McDonald and White be taken and deemed to be in contempt of the aforesaid order,' etc. Such decree further provided that, 'unless McDonald and White, within six days from the entry of this order and the service of a copy thereof upon their solicitors, shall in all respects comply with the said order of June 19, 1877, and pay unto the said registry of this court the sum of $49,297.50, the answer filed by them in the cause be stricken out, and that this cause proceed as if no answer therein had been interposed; and that, until the said defendants shall comply with the said order of June 19, 1877, all proceedings on the part of said defendants in this cause be, and the same are hereby, perpetually stayed.'

On December 29, 1877, the supreme court of the District of Columbia, at general term, on motion of the complainants, and proof of noncompliance on the part of the defendants McDonald and White with the requirements of the decree of December 8, 1877, 'ordered, adjudged, and decreed that the answer filed in this cause by the defendants McDonald and White be stricken out and removed from the files of the court, and that this cause do proceed as if no answer herein had been interposed.'

On February 12, 1878, the supreme court of the District of Columbia, at general term, made decree as follows:

'The answer of defendants having been removed from the files for their contempt in refusing to obey the order of court and deposit in the registry the sum of $49,297.50, it is now ordered, adjudged, and decreed that the bill be taken pro confesso against them.'

On April 17, 1878, that order was made absolute by another order or decree, which, after reciting material allegations in the complainants' bill as 'standing without denial on the part of the defendants,' ordered and adjudged 'that the complainants have a lien upon the claim of Augustine R. McDonald against the United States * * * of $197,190, and upon any draft, money, evidence of indebtedness, or proceeds thereof.'

Thereafter proceedings were taken in the court by which the judgment had been awarded to compel Riggs, as receiver, to account for the money which had come into his hands, and which he had paid over to McDonald under the circumstances already stated. This suit culminated in a judgment in favor of Riggs, affirmed by this court in Hovey v. McDonald, supra.

The suit now before us was subsequently commenced in the state of New York against the surviving partners of Riggs & Co., but service was had only on one of the partners, John Elliott, and, he having died, his executors were substituted as parties defendant. The object of the suit was to compel the defendants to account for the bonds or their value, upon the theory that Riggs & Co. had acquired them with actual notice of the pending litigation concerning the bonds, and were bound by the result of the judgment rendered as above stated in the suit of Hovey v. McDonald. The court of appeals of New York held that the judgment was not binding upon Riggs & Co. or the surviving members thereof, because, as it was rendered in a contempt proceeding after striking out the answer and refusing to consider the testimony filed in the cause, the judgment was beyond the jurisdiction of the court, as the power of courts of the District of Columbia to punish for contempt was restricted by the provisions of section 725 of the Revised Statutes. Hovey v. Elliott, 145 N. Y. 126, 39 N. E. 841. The New York court, moreover, held that, even assuming that the supreme court of the District had jurisdiction, and that the doctrine of the liability of purchasers pendente lite applied to a purchase made under the circumstances shown, the firm of Riggs & Co. were not such purchasers with reference to the judgment in question, as the lis in which the judgment was rendered was not the one pending at the time of the sale to the firm. From this judgment error was prosecuted to this court upon the theory that the decision of the court of appeals of the state of New York denied proper faith and credit to the judgment rendered by the supreme court of the District of Columbia.

Whether, as held by the court below, the courts of the District of Columbia are confined in all characters of contempt only to an infliction of the penalties authorized in section 725 of the Revised Statutes, and therefore have not power in any other form or manner to punish for a contempt, is a question which we do not deem it necessary to decide, and as to which, therefore, we express no opinion whatever. In the view we take of the case, even conceding that the statute does not limit their authority, and hence that the courts of the District of Columbia, notwithstanding the statute, are vested with those general powers to punish for contempt which have been usually exercised by courts of equity without express statutory grant, a more fundamental question yet remains to be determined,—that is, whether a court possessing plenary power to punish for contempt, unlimited by statute, has the right to summon a defendant to answer, and then, after obtaining jurisdiction by the summons, refuse to allow the party summoned to answer, or strike his answer from the files, suppress the testimony in his favor, and condemn him without consideration thereof, and without a hearing, on the theory that he has been guilty of a contempt of court. The mere statement of this proposition would seem, in reason and conscience, to render imperative a negative answer. The fundamental conception of a court of justice is condemnation only after hearing. To say that courts have inherent power to deny all right to defend an action, and to render decrees without any hearing whatever, is, in the very nature of things, to convert the court exercising such an authority into an instrument of...

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