McCreery v. Bay Circuit Judge

• Citation: 53 N.W. 613,93 Mich. 463
• Court: Michigan Supreme Court
• Decision Date: 18 November 1892
• Parties: McCREERY et al. v. BAY CIRCUIT JUDGE.

53 N.W. 613

93 Mich. 463

McCREERY et al. v. BAY CIRCUIT JUDGE.

Supreme Court of Michigan

November 18, 1892

Original application on relation of James McCreery and others for mandamus to Bay circuit judge. Denied.

J. L. Stoddard, for relators. Pratt Van Kleeck & Gilbert and C. L. Collins, for respondent.

PER CURIAM.

Petitioners filed a bill in chancery against the Bancroft-Thompson Company, a corporation, and against its stockholders and directors, and against the members of a mercantile firm known as "C. R. Hawley & Co." Petitioners had obtained a judgment against the corporation, and then filed this a judgment creditors' bill against the defendants, charging fraud. The fraud is alleged to consist in the nonpayment of the capital stock, the withdrawal of the capital stock by the directors and stockholders, the fraudulent giving and foreclosure of a chattel mortgage, the fraudulent purchase of goods by Hawley, when the corporation was insolvent, and the fraudulent purchase of goods by the firm at the mortgage foreclosure sale. The bill is in the usual form, and prays for a discovery as to the assets of the firm of Bancroft Thompson & Co. turned over to the corporation, and the liabilities of said firm assumed by the corporation; when and how such liabilities were paid; for an inventory of all the property and effects sold under the mortgage of all accounts, choses in action, and bills receivable that defendant Bancroft took possession of; and of all moneys securities, and property collected or received by him; and all accounts or claims that were settled at less than their face value; and of all money and property that were received by the directors and stockholders of said corporation. In brief, the bill prays for a discovery of all the dealings and transactions of the corporation, and of its directors, and all the dealings of the firm with it. The bill prays for answer under oath.

The answer, which is under oath, contains a full and specific denial of all the charges of fraud made by the bill, but does not disclose the evidence prayed for. The answer contains an offer on the part of the defendants to submit to an examination under oath touching these matters, and to produce all books and papers relating thereto, in their possession. Complainants filed exceptions to the answer. These exceptions were referred to a circuit court commissioner, who made a report sustaining some exceptions and overruling others. Upon a hearing of this report, the court held "that the practice of excepting to answers for insufficiency has been superseded, and rendered obsolete, by the statutes ^[1] making parties to suits generally competent to testify as witnesses, and that such practice is no longer permissible or, if permissible, is not obligatory on the courts, but rests in their discretion." The court thereupon entered an order sustaining the exceptions made on the part of the defendants, and overruling those on the part of the complainants. The order recites that it was made "without considering the merits of said exceptions to said answer." In his answer respondent says that, in passing upon the questions described in the said order, he came to the conclusion that the practice of excepting to answers for insufficiency, as a matter of right, was obsolete; that the allowance of such exceptions under the present practice was within the discretion of the court; that he examined the bill of complaint, the answers excepted to, the exceptions to the answer, the report thereon, and the exceptions to said report, so far as to satisfy himself that, under the practice, complainant's exceptions should be overruled, but that he did not examine into the merits of each exception, as he would have done under the old practice.

The exceptions to the answer relate only to those matters as to which discovery is sought. In this respect the bill is one purely for discovery. It seeks evidence, to be used upon the hearing of the case. Under the liberal rules of practice in our chancery courts, this evidence can be readily obtained by the testimony taken before a commissioner or in open court. The court can upon application order all the books of the defendants to be produced, for the examination of complainants, and this in ample time to permit complainants to prepare for the final hearing. This court has decided that, since parties have become...