Morgan v. Ownbey

• Court: Superior Court of Delaware
• Writing for the Court: PENNEWILL, C. J.,
• Citation: 29 Del. 379,100 A. 411
• Parties: JOHN PIERPONT MORGAN, WILLIAM P. HAMILTON, HERBERT L. SATTERLEE and LEWIS C. LEDYARD, Executors of JOHN PIERPONT MORGAN, deceased, v. JAMES A. OWNBEY
• Decision Date: 27 November 1916

100 A. 411

29 Del. 379

JOHN PIERPONT MORGAN, WILLIAM P. HAMILTON, HERBERT L. SATTERLEE and LEWIS C. LEDYARD, Executors of JOHN PIERPONT MORGAN, deceased,
v.
JAMES A. OWNBEY

Superior Court of Delaware, New Castle County

November 27, 1916

Superior Court, New Castle County, March Term, 1916.

FOREIGN ATTACHMENT, No. 46, January Term, 1916.

Argued before PENNEWILL, C. J., BOYCE, CONRAD, RICE and HEISEL, JJ., in Court in Banc.

Action by foreign attachment in the Superior Court by John Pierpont Morgan, William P. Hamilton, Herbert L. Satterlee and Lewis C. Ledyard, executors of John Pierpont Morgan, deceased, against James A. Ownbey. Entry of appearance by attorneys for defendant on the appearance docket, etc., as in ordinary actions, without giving security required by statute. Motion to strike off. Granted. Judgment for want of appearance at the second (March) term, amount to be ascertained by inquisition at bar. Motion to open judgment and permit defendant to appear and disprove claim of plaintiffs, without giving security. Denied. Final judgment obtained by inquisition at bar, at the subsequent (May) term. Motion to open final judgment, and permit defendant to appear without security and disprove or avoid the debt or claim of plaintiffs. Denied.

These several motions, in turn, were, without prejudice to plaintiffs, first heard by the Court in Banc.

The writ of foreign attachment was issued upon affidavit required by the statute, with direction to the sheriff, indorsed on the writ, that he summon as garnishee the Wooten Land and Fuel Company, and demand bail in the sum of two hundred thousand dollars. The sheriff made due return of the writ that he attached all the shares of the capital stock of James A. Ownbey in the Wooten Land and Fuel Company, a corporation of the State of Delaware, with all the rights thereunto belonging, and left a copy of the process with certain directors of the company and received from the same a certificate, made part of the return, showing the number of shares held or owned by the defendant to be thirty-three thousand three hundred and twenty-four and one-third.

On the first rule day plaintiffs filed a declaration on the common counts, without bill of particulars, with copy, and ruled pleas by first general rule day thereafter.

Ward, Gray and Neary, attorneys for defendant, for the purpose of entering an appearance for defendant, wrote their names on the appearance docket as in ordinary cases, and on the same day filed pleas with the Prothonotary, who marked the same "Filed," and made the following entry in the appearance docket:

"March 2, 1916. Defendant pleads, with copy, non assumpsit, statute of limitations, payment. Rule reps. and issues by second rule day in March."

On March 13, 1916, the attorneys for the plaintiffs presented a written motion to the court, asking that the appearance and the entry so made be stricken off, and that the pleas be stricken from the files of the court, for the reason that security required by the statute had not been given.

On March 14, 1916, at the request of the attorneys for defendant, the time for the argument of the motion was enlarged; and on March twenty-first they filed with the Prothonotary another paper in the nature of an answer to the motion, which after reciting the docket entries is as follows:

"3. The said Wooten Land and Fuel Company, while a corporation of the State of Delaware, is engaged in coal mining and all other of its activities and business in the states of Colorado and New Mexico, where it has much and valuable property, and is not and never has been engaged in business in the State of Delaware.

"4. That James A. Ownbey is a resident of the State of Colorado and that the stock in the said the Wooten Land and Fuel Company, which has been attached in this case, constitutes substantially all of his property, assets and estate.

"5. That a suit was instituted in the United States District Court for the District of Colorado in the month of February, 1915, by the plaintiffs in this cause and Francis H. McKnight, a person under the control of the said executors of John Pierpont Morgan, deceased, against the said the Wooten Land and Fuel Company, this defendant and other persons, praying for an accounting by this defendant, who had been the General Manager of said Wooten Land and Fuel Company, and the appointment of a receiver for said company. And in said cause a recevier for said company was duly appointed and certain matters therein referred to a master to take testimony. That the master is still engaged in taking testimony in said cause and the receiver so appointed is now in possession and control of the property of the said the Wooten Land and Fuel Company. That by reason of the premises the market value of the shares of said company owned by this defendant and attached as aforesaid has been temporarily destroyed, although in fact of great value, so that the defendant has found said shares unavailable to assist him in securing the required bail or security to procure the discharge of said shares from said attachment.

"6. That by reason of the premises, the defendant has found it impossible and avers it is impossible to secure bail or security in the said sum of two hundred thousand dollars ($ 200,000), or in any adequate sum for the release of his shares in said Wooten Land and Fuel Company, attached in this case.

"7. That the defendant in the above stated case has a good defense to the whole of any cause of action stated in said suit, the nature of which defense is that there exists no indebtedness upon any account or for any sum or sums of money whatsoever, due to said plaintiffs or their decedent, the said John Pierpont Morgan, from said defendant either at this time or at the time said suit was instituted.

"8. That the said writ of foreign attachment, issued as original process in said cause, is a process existing under and defined and limited by the statutes of the State of Delaware, in that behalf. That said statutes, upon due interpretation or construction thereof, provide:

"a. That entry of the bail or security for the discharge of the property seized under such writ of foreign attachment is not a necessary prerequisite for the entry of appearance by the defendant in such writ.

"b. That the entry of appearance by the defendant in the said writ may be made without disturbing the seizure of property thereunder or its security for any judgment finally entered in this suit.

"c. That the purpose of the writ of foreign attachment is two-fold, to wit: To compel the appearance of the defendant in the cause and to devote or apply the value of the property attached to the judgment, if any, obtained in the suit begun by such process.

"d. Where, in any case, appearance has been entered by the defendant, and pleas filed, no judgment can be entered until the trial of the issue so raised in said cause.

"9. If the statutes of the State of Delaware, relating to foreign attachment, cannot duly be construed so as to permit appearance and defense, in case of a cause begun by foreign attachment, without the entry of bail or security for the discharge of the property seized under such writ, such statutes are unconstitutional under the first section of the fourteenth amendment of the Constitution of the United States, in that:

"a. Such statutes are laws abridging the privilege and immunities of citizens of the United States.

"b. Such statutes deprive parties defendant in cases brought thereunder of property without due process of law.

"c. Such statutes deny such defendants the equal protection of the laws.

"10. To require the defendant in this cause to give bond in the sum of two hundred thousand dollars or in any sum adequate to secure the payment of the amount of monies claimed by plaintiff therein, or to procure the dissolution of said attachment and the release therefrom of the shares of stock so attached, as a condition precedent to the allowance, of an appearance and entry of pleas in bar, in said cause, by said defendant, is oppressive, unreasonable and in violation of fundamental principles for the administration of justice."

The Prothonotary marked the same "Filed," and made the following entry in the appearance docket:

"March 21, 1916. Reply to plaintiff's motion to strike appearance and defence filed."

On March 27, 1916, attorneys for plaintiffs filed a further written motion to the effect that the entry so made in the appearance docket be stricken off; that the paper writing containing reply to plaintiff's first motion be stricken from the files, for the reason that security required by the statute had not been given; and on the same day, they also filed another written motion, viz.:

"* * * It appearing that * * * the defendant has not entered special bail, * * * the * * * plaintiffs, by * * * their attorneys, move, at this the second term after issuing the writ, for judgment, collectible from the property attached, pursuant to Sections 20 and 28, Chapter 126, being Sections 4137 and 4145 of the Revised Code, 1915.

"And further, that the amount of said judgment be ascertained by inquisition at bar."

The Superior Court, considering that the questions of law raised by the motions ought to be heard by the Court in Banc, did, upon the joint application of the parties, without prejudice to the plaintiffs, direct the same to be so heard.

Accordingly the motions came on to be heard by the Court in Banc.

ARGUMENT FOR PLAINTIFFS.

In foreign attachments under the Delaware statute a common appearance cannot be entered and the defendant cannot appear and defend without entering special bail. Section 4137, Revised Code of 1915; Section 4123, Id., Reybold v. Parker, 6 Houst. 544.

The Act passed in 1770 (Rev. Laws 1829, p. 46) is with very few changes the act of today. Parts of Sections 3, 10 and 16 thereof cited; also, "A...