President of the Middletown Bank v. Russ

Hosmer, Ch. J. The first objection, in this case, is, that there is an adequate remedy at law against the indorsers of the notes mentioned in the plaintiffs’ bill. It does not lie in the mouths of the defendants to make this objection. It is sufficient for the plaintiffs, that there is not adequate remedy at law against the defendants. The plaintiffs aver, that the Middletown Manufacturing Company is indebted to them in a large sum ; and the allegations sufficiently shew that it is a corporation. The bill proceeds on the ground, that the individual members of this company are under personal obligation to discharge the debt; and stripped of this principle, it is wholly destitute of merits. The members of the corporation, in that event, may say, they are not answerable to tlie plaintiffs: and this ⅛¾1 good ground to sustain a demurrer, both to the discov relief. Coop. Eq. Plead. 174. It would be absurd ceed on a bill, when it is apparent, that the defendant interested in the subject of it. Now, on this point, ti tiffs have wholly failed in limine. The charter of incorp is neither recited, nor counted on ; and the court cannot notice of a private act of the legislature, unless it is duly pleaded. By the common law, the members of a corporation are not individually liable for the debts of the corporate body; and no liability has been averred, other than what the common law sanctions. This objection to the plaintiffs’ bill is undoubtedly fatal. I cannot discover any force in the remark, that in a case otherwise unexceptionable, the members of the corporation would be protected from giving the discovery sought. In support of it, no adjudged case, or established principle, has been cited. A discovery from the members of a corporation, made personally liable by statute, although new in the instance, would be sustained, on the ordinary equitable ground upon which discoveries are enforced. There is nothing unusual in [140] demanding of a debtor the disclosure of facts, which may ensure his liability, and that of others Connected with him. Had it appeared, that the corporation had books and papers containing the names of its stockholders, it would still be a question whether a discovery from this source would effect the equitable object of the plaintiffs’ bill. But nothing of this kind is apparent; much less, does it appear, that the books and papers, if they existed, would comprise all the information desired ; or that the production of them would answer the reasonable exigencies of the case. The plaintiffs have averred, that the defendants possess full knowledge on the subject of enquiry ; and nothing short of a demand unnecessary and vexatious, should protect them from the discovery sought. An objection, however, exists to the discovery, that it would be immaterial, inasmuch as the court could not follow it up with the relief solicited. It is a well established principle, that “ if a bill be brought for a discovery and relief, and the discovery is sought for the purpose of the relief, if a demurrer or plea will hold to the relief prayed, the plaintiff cannot have a discovery.” 1 Coop. Eq. Plead. 117. 188. 1 Madd. Chan. 175. 2 Fonb. Eq. 494. n. Price v. James, 2 Bro. Ch. Ca. 319. Collis v. Swayne, 4 Bro. Ch. Ca. 480. It is because the discovery is auxiliary and incidental to the relief; and if the relief is unattainable, the discovery can answer no imaginable purpose. This brings me to consider, whether a court of chancery, having taken jurisdiction for enforcing a discovery, will universally assume cognizance of the cause, settle every question which may arise, and grant ultimate relieh I have no hesitation in giving a negative to this question. The practice of -this state, on this subjeet, has only existed at the circuits in a few instances ; and neither from their frequency, nor from the discussion and deliberation with which they have been attended, ought to be considered as possessing the force of precedent. I cannot find, that in Westminster-Hall, or in any of the sister states, a similar practice has been adopted. On the contrary, the distinction is familiar between bills technically denominated bills of discovery, in which the discovery is auxiliary to a suit in a court of law, and bills of discovery and relief, in which the case is terminated in chancery. The enquiry yet remains, whether on a bill like the present, [141] to ascertain the parties to a contract, chancery, having caused a discovery, will administer relief. No such case has been shewn; and no principles of analogy, warrant the supposition. To strike out the distinguishing principle, on which courts of equity universally refuse relief after a discovery, is matter of considerable difficulty; but it is obviously clear, that it is never given in cases similar to the one under consideration. It is a very unfounded conception, that every resort to chancery, for the ascertainment of a fact, transfers the jurisdiction over the cause from law to equity, when many, and perhaps most, of the facts are disputed, and many questions of law remain open for decision. It is true, that chancery, having acquired cognizance of a suit for the purpose of a discovery, will entertain it for the purpose of relief, in most cases of fraud, account, accident and mistake. 1 Fonb. Eq. 11. Butin Geast v. Barber, 2 Bro. Ch. Ca. 61., which was a bill for discovery of the quantity of coal and coke from a mine, the Master of the Rolls said, he was clear the remedy, that is, the relief, was at law. And in Lee v. Alston, 1 Bro. Ch. Ca. 194. it was observed by Lord Thurlow, that “if the case,” (which was to ascertain the quantity of timber cut down,) “required nothing but a discovery, it should not come here, but, on the discovery had, they should proceed at law; but Where an account is necessary, it cairies relief with it.” Had the plaintiffs averred, (having first shewn the liability of the members of the Middletown Manufacturing Company to their claim,) that they were desirous of bringing a suit against them, and intended to do it, I should entertain no doubt relative to the propriety of enforcing a discovery, in aid of the legal jurisdiction. But, as I am clear, that the relief prayed for is inadmissible, the discovery would be futile; and, for the several reasons assigned, the plaintiffs’ bill ought to be dismissed. The other Judges were of the same opinion. Demurrer to be sustained.