59

§ 21. Discovery.-A court of chancery will compel a discovery to detect fraud and imposition in a suit to set aside a fraudulent conveyance.58 Where the creditor has knowledge of an assignment of the debt which he attaches, and believes it fraudulent, he should summon the assignee, and compel a discovery. A judgment creditor may demand from his debtor a disclosure of his assets, and of the names of his creditors in general terms. A creditors' bill still lies to obtain discovery from debtors of certain book accounts concealed, withheld, and transferred in fraud of creditors, although the same relief may be obtained by supplementary proceedings.61 On a creditor's bill the plaintiff is entitled to a full discovery as to every trust created for the defendant's benefit; he is also entitled to a full discovery of all the property owned by the defendant, at the time of filing the bill, although it be out of the jurisdiction of the court of law.62 Where the bill points out the property conveyed and specifies the particulars in which the fraud consists, the complainant may, as ancillary to the main relief sought, have a discovery as to the property alleged to have been fraudulently concealed or conveyed by the debtor, and the consideration received therefor.63 But a

58. Skinner v. Judson, 8 Conn. 528, 21 Am. Dec. 691.

59. Gordon v. Webb, 13 Mass. 215; Dix v. Cobb, 4 Mass. 508. The provisions of St. 1846, chap. 168, § 1, authorizing proceedings "against any one suspected of having fraudulently received, concealed, embezzled or conveyed away any of the money, goods, effects or other estate" of an insolvent debtor, extend to fraudulent conveyances of real estate. Tufts, 58 Mass. 448.

Harlow v.

60 Cadwallader v. Granville Alexandrian Soc., 11 Ohio, 292; Miers v. Zanesville, etc., Turnpike Co., 11

Ohio 273.

61. Hart v. Albright, 18 N. Y. Supp. 718, 28 Abb. N. Cas. 74.

62. Le Roy v. Rogers, 3 Paige (N. Y.), 234.

The creditor must have obtained judgment and actually issued execution. Detroit Copper, etc., Rolling Mills v. Ledwidge, 162 Ill. 305, 44 N. E. 751; Rambaut v. Mayfield, 8 N. C. 85.

63. U. S.-Lanmon v. Clark, 14 Fed. Cas. No. 8,071, 4 McLean, 18; Verselius v. Verselius, 28 Fed. Cas. No. 16,925, 9 Blatchf. 189.

Ala.-Guyton v. Terrell, 132 Ala. 66, 31 So. 83; Sweetzer v. Buchanan, 94 Ala. 574, 10 So. 552; Lawson v. Warren, 89 Ala. 584, 8 So. 841. Ill.-Scott v. Moore, 4 Ill. 306. Md.-McNeal V. Glenn, 4 Md.

87.

bill for that purpose must state some specific fund, equity, or chose, in which the debtor has an interest; a general charge that he has been in receipt of a large salary, has acquired property by marriage, has drawn a large prize in a lottery, and is now in the possession or enjoyment of the use of property of considerable value, which cannot be reached at law, is insufficient." Discovery will not be granted to the creditor of an insolvent trader on the ground that certain mortgages executed by the latter are fraudulent, where the bill for discovery fails to disclose that any assets would remain after payment of certain other mortgages which are not shown to be invalid.65 Bills of discovery are not authorized under the Texas practice, in which law and equity are blended into one system, and in which statutory provisions have been made for the discovery of evidence by simple interrogatories in a pending suit, and for depositions of the adverse party. A bill cannot be sustained solely for discovery where parties in interest are competent to testify, and can be compelled to answer under oath all relevant interrogatories either at the trial or in proceedings supplementary to execution, except possibly under peculiar and exceptional circumstances." The remedy, however, still exists where it has not been abolished by statute.68 The defendant cannot be required to make a discovery of facts which would subject him to a criminal prosecution or a forfeiture and he may claim his privilege in his

66

Va.-Saunders v. James, 85 Va. 936, 9 S. E. 147.

Wis.-Pierce v. Milwaukee Constr. Co., 38 Wis. 253.

64. Verdier v. Foster, 2 Rich. Eq. (S. C.) 227.

65. Cortland Wagon Co. v. Gordy, 98 Ga. 527, 25 S. E. 574.

66. Cargill v. Kountze, 86 Tex. 386, 25 S. W. 13, 22 S. W. 1015, 40 Am. St. Rep. 853, 24 L. R. A. 183, 194.

67. Ex parte Boyd, 105 U. S. 647,

26 L. Ed. 1200; Field v. Hastings, etc., Co., 65 Fed. 279; Preston v. Smith, 26 Fed. 884.

68. Hart v. Albright, supra; Floyd v. Floyd, 77 Ala. 353; Dutton v. Cameron, 97 Mich. 93, 56 N. W. 229; Treadwell v. Brown, 44 N. H. 551.

69. Bay State Iron Co. v. Goodall, 39 N. H. 223, 75 Am. Dec. 219; Horstman v. Kaufman, 97 Pa. St. 147, 39 Am. Rep. 802; Michael v. Gay, 1 F. & F. 409.

§ 22. Injunction to restrain fraudulent conveyance by debtor.-A general creditor who has not reduced his claim to judgment, or in any other manner acquired a lien upon his debtor's property, cannot, in the absence of a statute permitting it, maintain a bill or action for an injunction to restrain or prevent the debtor from disposing of his property in fraud of creditors.70 Certain cases do not fall within the rule that a general creditor cannot ask the preventive aid of a court of equity before he gets a judgment at law, but they depend upon a state of facts giving the complainant an equitable interest in the property which creates a peculiar equity which gives jurisdiction to the court and authorizes the granting of an injunction." Equity will interfere by injunction to prevent one summoned as trustee from fraudulently conveying his property so as to defeat the collection of the judgment which he anticipates may be rendered against him as such trustee.72 A court of equity will grant an injunction restraining a married woman, buying and selling in her own name in a state by the laws of which she is a free dealer, from fraudulently disposing of her goods to defeat the demands

70. N. Y.-Reubens v. Joel, 13 N. Y. 488; Neustadt v. Joel, 9 N. Y. Super. Ct. 530; Brooks v. Stone, 19 How. Pr. 395, 11 Abb. Pr. 220; Wiggins v. Armstrong, 2 Johns. Ch.

144.

Fla.-Barrow v. Bailey, 5 Fla. 9. Ga.-Mackenzie v. Thomas, 118 Ga. 728, 45 S. E. 610; Guilmartin v. Middle Georgia, etc., R. Co., 101 Ga. 565, 29 S. E. 189; Mayer v. Wood, 56 Ga. 427; Dortic v. Dugas, 52 Ga. 231. Ill.-Bigelow v. Andress, 31 Ill.

322.

Md.-Balls v. Balls, 69 Md. 388, 16 Atl. 18; Rich v. Levy, 16 Md. 74; Hubbard v. Hubbard, 14 Md. 356; Ehl v. Dillon, 10 Md. 500, 69 Am. Dec. 172.

Neb.-Brumbaugh v. Jones (1904), 98 N. W. 54; Crowell v. Horacek,

12 Neb. 622, 12 N. W. 99; Adams v. Miller, 4 Neb. (Unoff.) 464, 94 N. W. 711.

N. J.-Meyers V. Wedel (Ch. 1904), 57 Atl. 1008; Mittnight v. Smith, 17 N. J. Eq. 259, 88 Am. Dec. 233; Robert v. Hodges, 16 N. J. Eq. 299.

Ohio.-Marion Deposit Bank v. McWilliams, 2 Ohio Dec. 142, 1 West. L. Month. 571.

Va.-Rorrer v. Guggenheimer, 87 Va. 533, 12 S. E. 1054; Kelso v. Blackburn, 3 Leigh, 299; Tate v. Liggat, 2 Leigh, 84; Rhodes v. Cousins, 6 Rand. 188, 18 Am. Dec. 715.

Wis.-Almy v. Platt, 16 Wis. 169. 71. Heyneman v. Dannenberg, 6 Cal. 376, 65 Am. Dec. 519; Cohen v. Meyers, 42 Ga. 46.

72. Moore v. Kidder, 55 N. H. 488.

75

of a creditor who cannot sue her at law." Partnership creditors are entitled to an injunction to restrain a transfer of partnership property between the partners, alleged to have been fraudulently made, the firm being at the time insolvent.74 Where defendant mortgages his property during the pendency of an action, for the purpose of rendering worthless any judgment which may be rendered against him, a petition by plaintiff for a cautionary judgment against defendant will be granted. After judgment and execution at law against a debtor, the court will, in a proper case, grant an injunction to restrain the debtor from disposing of his property,76 and the court will entertain a bill by a judgment creditor to prevent, by injunction and receiver, the fraudulent disposition of assets by the debtor, although the property sought to be reached is not specifically described." A creditor is not precluded in equity from suing to restrain a fraudulent disposition of certain property belonging to the debtor by the fact that his claim is secured by a mortgage on other property of the debtor. In some states it is provided by statute that an injunction may issue to restrain the removal or disposition of property where, during the pendency of an action in which judgment is about to be recovered, the defendant therein threatens or manifests an intent to dispose of his property with intent to defraud his creditors, or to place it beyond the reach of an execution.79 Under such a statute a general creditor before judg ment may enjoin his debtor from disposing of his property. Several creditors may join in filing a bill to enjoin a debtor from

73. Sands v. Marburg, 36 Ga. 534, 91 Am. Dec. 781.

74. Sanderson v. Stockdale, 11 Md. 563.

75. Witmer V. Port Treverton Church, 17 Pa. Co. Ct. 38.

76. Candler v. Pettit, 1 Paige (N. Y.), 168, 19 Am. Dec. 399; Conolly v. Riley, 25 Md. 402.

77. Shainwald v. Lewis, 6 Fed. 766, 1 Sawy. 148.

80

78. Robinson v. Springfield Co., 21

Fla. 203.

79. Reubens v. Joel, 13 N. Y. 488; Mitchell v. Bettman, 25 Barb. (N. Y.) 408; Brewster v. Hodges, 8 N. Y. Super. Ct. 609; Perkins v. Warren, 6 How. Pr. (N. Y.) 341; Pomeroy v. Hindmarsh, 5 How. Pr. (N. Y.) 437; Morey v. Ball, 90 Ind. 450.

80. Mitchell v. Bettman, 25 Barb. (N. Y.) 408; Morey v. Ball, 90 Ind. 450.

84

82

fraudulently conveying his property, when they have similar rights with respect to the property of such debtor,31 although their claims are several, and not in judgment. One who is not made a defendant in the cause cannot, however, be enjoined from paying over money due a debtor for property fraudulently transferred.83 A court of equity will not issue an injunction to restrain a debtor from transferring property beyond its jurisdiction, if the creditor can have as perfect a remedy by judgment, execution, or attachment at law. The right to such injunction depends on the fact of the pendency of the action, and the existence of the fraudulent intent, and a mere suspicion of the intent to dispose of property for a fraudulent purpose is not sufficient. 86 Such remedy is applicable only where the act is threatened, or is about to be done, and not where it has been done.s An injunction pendente lite will not be granted unless plaintiff establishes an equitable ground for interference by showing that he is a creditor, or that he will be injured by the threatened fraudulent transfer.88 If plaintiff's legal right to recover in the action is denied on oath and not supported by any evidence, an injunction pendente lite should be refused."

85

87

§ 23. Injunction to restrain disposition of property by fraudulent grantee.—A court of equity will not intervene by way of injunction in behalf of a simple contract creditor or general creditor upon the ground that his debtor's transferee is about to

81. Orr v. Moore, 1 Tex. App. Civ. Cas., § 588.

82. Field v. Holzman, 93 Ind. 205. 83. Reed v. Baker, 42 Mich. 272, 2 N. W. 959; Meyers v. Wedel (N. J. Ch. 1904), 57 Atl. 1008.

84. Rogers v. Michigan, etc., R. Co., 28 Barb. (N. Y.) 539; Carstarphen Warehouse Co. v. Fried, 124 Ga. 544, 52 S. E. 598.

85. Comyns v. Riker, 65 Hun (N. Y.), 626, 20 N. Y. Supp. 578; Mitchell v. Bettman, 25 Barb. (N.

Y.) 408; Brewster v. Hodges, 8 N. Y. Super. Ct. 609; Pomeroy v. Hindmarsh, supra; Baker v. Naglee, 82 Va. 876, 1 S. E. 191.

86. Pomeroy v. Hindmarsh, supra. 87. Reubens v. Joel, 13 N. Y. 488; Perkins v. Warren, 6 How. Pr. (N. Y.) 341.

88. Comyns v. Riker, supra; Perkins v. Warren, supra.

89. Perkins v. Warren, supra; Empire Paving, etc., Co. v. Robinson, 11. N. Y. Supp. 540.