Ownbey v. Morgan

• Decision Date: 11 April 1921
• Docket Number: No. 99,99
• Parties: OWNBEY v. MORGAN et al
• Court: U.S. Supreme Court

256 U.S. 94

41 S.Ct. 433

65 L.Ed. 837

OWNBEY

v MORGAN et al.

No. 99.

Argued Nov. 18, 1920.

Decided April 11, 1921.

Mr. Louis Marshall, of New York City, for plaintiff in error.

[Argument of Counsel from pages 94-97 intentionally omitted] Messrs. Willard Saulsbury, of Wilmington, Del., and Harlan F. Stone, of New York City, for defendants in error.

Mr. Justice PITNEY delivered the opinion of the Court.

This writ of error brings under review a judgment of the Supreme Court of the state of Delaware, affirming a judgment of the Superior Court in a proceeding brought by defendants in error by foreign attachment against the property of plaintiff in error pursuant to the statutes of that state.

Proceedings were commenced in the Superior Court December 23, 1915, by the filing of an affidavit entitled in the cause, made by one Joyce, a credible person, and setting forth that defendant Ownbey resided out of the state and was justly indebted to plaintiffs in a sum exceeding $50. Thereupon a writ of foreign attachment was issued to the sheriff of New Castle county, which plaintiffs caused to be indorsed with a memorandum to the effect that special bail was required in the sum of $200,000, and under which the sheriff attached 33,324 1/3 shares of stock (par value $5 each) held and owned by defendant in the Wootten Land & Fuel Company, a Delaware corporation, and made a proper return. Plaintiffs filed a declaration demanding recovery of $200,000, counting upon a combination of the common money counts in assumpsit. Whether such pleading was required or even permitted by the statutes is questionable; but this is not material for present purposes. Not long afterwards, defendant, by attorneys, without giving security, went through the form of entering a general appearance, and filed pleas of non assumpsit, the statute of limitations, and payment. Plaintiff's attorneys moved to strike out the appearance and pleas on the ground that special bail or security as required by the statute in suits instituted by attachment had not been given. To this motion defendant filed a written response setting up that the Wootten Land & Fuel Company, although a Delaware corporation, was engaged in coal mining and all its other activities and business in the states of Colorado and New Mexico, where it had large and valuable property; that defendant was a resident of Colorado, and the stock in said company attached in this case constituted substantially all his property; that the company was in the hands of a receiver, and because of this the market value of the shares attached was temporarily destroyed, so that they were unavailable for use in obtaining the required bail or security to procure the discharge of the shares from attachment, and that it was impossible for defendant to secure bail or security in the sum of $200,000, or any adequate sum, for the release of the shares so attached; that defendant had a good defense, in that there was no indebtedness upon any account or in any sum due from him to plaintiffs; that by the true construction of the Delaware statutes the entry of bail or security for the discharge of the property attached was not a necessary prerequisite to the entry of defendant's appearance, and such appearance might be made without disturbing the seizure of property under the writ or its security for any judgment finally entered; and that if the statutes could not be so construed as to permit appearance and defense in a case begun by foreign attachment without the entry of bail or security for the discharge of the property seized, they were unconstitutional under the first section of the Fourteenth Amendment, in that (a) they abridged the privileges and immunities of citizens of the United States; (b) deprived defendants in cases brought under them of property without due process of law; and (c) denied to such defendants the equal protection of the laws.

Upon motion of plaintiffs this response and the attempted appearance and pleas of defendant were struck out upon the ground that special bail or security as required by the statute had not been given by defendant or any person for him; the court in banc holding that in a foreign attachment suit against an individual there could be no appearance without entering 'special bail,' that the requirement to that effect was not arbitrary or unreasonable, and the statute was not unconstitutional. Morgan v. Ownbey, 29 Del. (6 Boyce) 379, 398-406, 100 Atl. 411.

Thereupon judgment in favor of plaintiffs and against defendant for want of appearance was ordered, collectible only from the property attached, the amount to be ascertained by inquisition at bar. The inquisition afterwards proceeded, and resulted in the finding of damages to the amount of $200,168.57, for which final judgment was entered.

Defendant repeatedly asked that the proceedings be opened and he be permitted to appear and disprove or avoid plaintiff's debt or claim, saying that shortly after the issuance of the writ of attachment, and as soon as advised thereof, he had proceeded to Delaware, retained counsel, and used every possible effort to secure bail in the sum of $200,000, offering the attached stock as collateral security to indemnify a surety, but because the property of the Wootten Company was in the hands of a receiver he had found it impossible to obtain any surety; and that he was not at present nor was he at the time of the issuance of the writ of foreign attachment indebted to plaintiffs in any sum whatever, but had a just and legal defense to the whole of the alleged cause of action. These applications were denied, upon opinions of the court in banc (29 Del. [6 Boyce] 417, 434-436, 100 Atl, 411), and the Superior Court ordered the shares of stock in question sold in order to satisfy the debt, interest, and costs.

The Supreme Court affirmed the judgment (7 Boyce, 297, 105 Atl. 838, 849), and the case comes here upon the contention that the statutes of Delaware, as thus construed and applied, are repugnant to the first section of the Fourteenth Amendment.

The statutes are found in the Delaware Revised Code of 1915, and the provisions bearing upon the controversy are set forth in the margin.¹

The principal contention is based upon the 'due process of law' clause of the Fourteenth Amendment. It is said the essential element of due process—the right to appear and be heard in defense of the action—is lacking. But the statute in plain terms gives to defendant the opportunity to appear and make his defense, conditioned only upon his giving security to the value of the property attached. Hence the question reduces itself to whether this condition is an arbitrary and unreasonable requirement, so inconsistent with established modes of administering justice that it amounts to a denial of due process. And this must be determined not alone with reference to a case of peculiar hardship arising out of exceptional circumstances, but with respect to the general effect and operation of the system of procedure established by the statutes.

The act concerning foreign attachments has been upon the statute books of Delaware since early colonial days. Like the attachment acts of other states, it traces its origin to the custom of London, under which a creditor might attach money or goods of the defendant either in plaintiff's own hands or in the custody of a third person, by proceedings in the mayor's court or in the sheriff's court. The subject is treated at large in Bohun's Privilegia Londini (3d Ed. 1723) p. 253 et seq. See also Bac. Abr. (Bouv. Ed.), tit. Customs of London (H); Com. Dig. (4th Ed.) tit. Attachment, Foreign (A); Pulling, Laws & Customs of London (2d Ed.) 187 et seq.; Serg. Attach. Appendix, p. 205 et seq. As is said in Drake on Attachment, § 3:

'This custom, notwithstanding its local and limited character, was doubtless known to our ancestors, when they sought a new home on the Western continent, and its essential principle, brought hither by them, has, in varied forms, become incorporated into the legal systems of all our states. * * * Our circumstances as a nation have tended peculiarly to give importance to a remedy of this character. The division of our extended domain into many different states, each limitedly sovereign within its territory, inhabited by a people enjoying unrestrained privilege of transit from place to place in each state, and from state to state, taken in connection with the universal and unexampled expansion of credit, and the prevalent abolishment of imprisonment for debt, would naturally, and of necessity, lead to the establishment, and, as experience has demonstrated, the enlargement and extension, of remedies acting upon the property of debtors.'

By the custom a defendant could not appear or raise an issue about the debt claimed without entering special bail, or else surrendering his body. Andrews v. Clerke, Carth. 25, 26. Hence it naturally came about that the American colonies and states, in adopting foreign attachment as a remedy for collecting debts due from nonresident or absconding debtors, in many instances made it a part of the procedure that if defendant desired to enter an appearance and contest plaintiff's demand he must first give substantial security, usually in the form of special bail. Besides Delaware, this was true of New Jersey (Pat. L. p. 296, § 7; Id., p. 298, § 16 ; Watson v. Noblett, 65 N. J. Law, 506, 508, 47 Atl. 438); Pennsylvania (McClenachan v. McCarty, 1 Dall, 375, 378, 1 L. Ed. 183); Maryland (Campbell v. Morris, 3 Har. & McH. 535, 552, 553); Virginia (Tiernans v. Schley, 2 Leigh, 25, 29); North Carolina (Britt v. Patterson, 31 N. C. 197, 200; Alexander v. Taylor, 62 N. C. 36, 38); South Carolina (Acock v. Linn, Harp. 368, 369, 370; Fife v. Clarke, 3 McCord, 347, 352; Callender v. Duncan, 2 Bailey, 454); Tennessee (Boyd v. Buckingham, 10 Humph. 434, 437); and Ohio (1 Chase's Stat. 462, § 15, cited by counsel in Voorhees v. Bank of...