Miller v. Gittings

Bryan, J., delivered the opinion of the Court. Ernest Gittings filed a bill in equity against Emanuel H. Miller and Arthur E. Wilson. It was alleged that Gittings was a citizen and resident of the State of Maryland and of the city of Baltimore; that Miller and Wilson were also citizens and residents of the same city and State ; that in the month of September, eighteen hundred and ninety-five, Gittings and Charles C. Allen, who is a resident and citizen of the State of New York, formed a partnership for the conduct of the stock brokerage business in the city of Baltimore under the name of Git-tings 8c Co., and that in said business Gittings was the active member who alone saw the customers, and conducted the operations with them; that in the summer and early fall of eighteen hundred and ninety-six Miller and Wilson had a large number of transactions with Gittings and Com ⁶¹⁴ pany in relation to stocks; that said transactions were in the form of purchases and sales of stock made by Gittings & Co., for the account and risk of Miller and Wilson, but were in reality gambling transactions, and that there was no .intention or belief-by any of the parties to the transactions that the stocks should ever be actually delivered, but that the sole purpose was that there should be an accounting and settling as the stocks rose or fell in price; that all these . gambling transactions were entered into in the city of Baltimore ; and all settlements were also to be made in the city of Baltimore ; that for the purpose of indemnifying Gittings & Co. against loss in executing their orders Miller and Wilson placed in the hands of Gittings as margins ten bonds of the par value of a thousand dollars, and two hundred shares . of the preferred stock of the Southern Railway Company ; that these bonds and shares of stock were delivered to Git-tings with the express intention and expectation on the part of Miller and Wilson that he would hypothecate them for the purpose of obtaining money to enable him to aid Miller and Wilson in their gambling transactions ; that the amount of money which would have been necessary to purchase the stocks and. carry them until Miller and Wilson should elect .to order the sale of them to make their settlements with Gittings & Co. would have been over two hundred thousand dollars, and Miller and Wilson both knew that neither Gittings nor Gittings & Co. had any such sum; and Miller and Wilson had no such sum with which to make payment for the stocks, as it would be necessary for them to do, if it (had been intended that there should be an actual delivery of them; that Gittings hypothecated the ten bonds in the First National Bank of Baltimore for the sum of eight thousand dollars, for which sum the account of Miller and Wilson was duly credited by him on the books of Gittings & Co.; that this hypothecation was made with the full knowledge at the time it was made of Wilson and of William H. Miller, the father of Emanuel Miller; that at that time Emanuel Miller was absent from Baltimore, and that on his ⁶¹⁵ return a day or two afterwards he was informed of it by Gittings; that the Southern Railway stock was also hypothecated in accordance-with the understanding and expectation of the parties when it was delivered to Gittings ; that it was hypothecated with Cuthbert & Co., stock brokers in the city of New York, through whom Gittings acted in carrying on the greater part of the speculative transactions for Miller and Wilson. The bill of complaint further alleges that on the tenth day of September, eighteen hundred and ninety-six, Gittings & Co. were unable to settle with Miller and Wilson for the winnings to which they would have been entitled if their dealings had not been illegal gambling transactions; and that Gittings would not have felt justified in making such a defence but for the perjuries and fraud, and the oppressive and dishonest conduct of said Miller and Wilson hereinafter set forth.

It also alleges that on the said tenth day of September Gittings gave to Miller a check on the Continental National Bank for eight thousand dollars in part payment of said winnings, and that at the time the check was given Miller knew that there were no funds to meet it, and that it would not and could not be good, unless Allen, the partner of Gittings, should provide for its payment, which he did not do; that Miller and Wilson brought two actions in the city of New York against Gittings and the said Allen, claiming in one of them about eight thousand dollars for non-payment of the check, and in the other seventeen thousand dollars, for the alleged conversion of the bonds and stock deposited as margin, and for the alleged conversion of the different stocks on whose fluctuations in price Miller and Wilson had been gambling; that Gittings was summoned to appear to these actions when he was in New York. (This was at the time hereinafter mentioned when he was arrested and held to bail); that Gittings has filed his answers to these actions, and copies of the answers are filed with the bill of complaint; that the complainant believes that Allen has also filed answers, but that complainant is not possessed of ⁶¹⁶ copies of them, and cannot therefore file them; that he believes and therefore avers that by the law and practice of the State of New York the complaints and answers in actions are kept in the offices of the attorneys of the several parties until the cause is ready for trial; and that the complainant believes and therefore avers that Allen’s answer is not filed in any public office from which a duly certified copy could be obtained. The bill of complaint further alleges that the right of Miller and Wilson to recover in these actions depends on the question whether the aforesaid transactions are wagering or gambling transactions, and that their validity depends' on the law of Maryland; that the complainant has a right to have their legality decided by the law of Maryland; that if these causes are tried in New York it will be necessary to aver and prove the Maryland law as a fact, while if they are tried in Maryland the law of the State will be judicially recognized, and more equal and complete justice can be done; that the complainant submits his rights to the jurisdiction of the Court, and is willing that such decree may be passed as is just between himself and Miller and Wilson; that the said Miller and Wilson went out of the jurisdiction in which both they and the complainant resided, for the purpose of evading and escaping the Maryland law and of obtaining a judgment in New York, to which they are not entitled by the law of the place where the transactions arose and where the parties are domiciled. The bill of complaint further alleges that they obtained an order for the arrest of the complainant from a Justice of the Supreme Court of New York in the second of the above mentioned suits upon certain affidavits made by them and others, which state, among other things, that the complainant wrongfully, and without the knowledge and consent of Miller and Wilson, hypothecated the before-mentioned bonds; that the said statement was false, and was known to be false by Miller and Wilson, and was made for the deliberate, malicious and unlawful purpose of enabling them to have the complainant arrested suddenly when away ⁶¹⁷ from home, and dishonestly and oppressively coercing him and his friends to pay their unlawful and fraudulent claims in order to secure complainant’s liberty; that the complainant was arrested when in the city of New York and held to bail in the city of New York in the sum of fifteen thousand dollars ; that the complainant moved by his attorney to vacate the order of arrest, but the Court overruled the motion without filing an opinion; that the said Allen has stated through his attorneys that he will voluntarily appear in this suit, if made a party defendant.

The prayer of the bill of complaint was for an injunction prohibiting the further prosecution of the suits in New York, and from any further proceedings looking to the arrest or imprisonment of the complainant in said suits ; and that the Court would assume jurisdiction, and for general relief. Process was prayed against Miller and Wilson and against Allen. The Court granted the injunction. Miller and Wilson having filed an answer appealed.

It is stated in the appellee’s brief that Allen has appeared as a defendant and submitted himself to the jurisdiction of the Court. He was represented by counsel at the argument in this Court. It appears by the exhibits filed with the bill of complaint that the suits were brought in the city of New York abouf the sixteenth of September, eighteen hundred and ninety-six, and that the order for the arrest of Gittings was issued on the twenty-seventh day of October. He was arrested on the same day and gave bail, by which he and his surety became bound that he should at all times render himselt amenable to any mandate which might be issued to enforce a final judgment against him in the action.

After his release on bail, that is, on the fourth of December, he filed his answers to the two suits against him and his partner Allen. The plaintiffs in the suits in anticipation of Gittings’ visit to New York prepared their own affidavits in the city of Baltimore on the seventeenth of October, and obtained about the same time the affidavits of other persons in the same city. The plaintiff Wilson made an additional affidavit in ⁶¹⁸ New York City on the twenty-seventh of October.' The bail given by Gittings required him to obey any mandate which might be made to enforce a final judgment in the action, and made it, therefore, necessary for the protection of his rights that he should answer and resist the complaint filed in the suit. It is not. a question in this case whether it was lawful for the plaintiffs in the New York suits to cause Gittings to be arrested.

The declaration of the Constitution is unconditional and absolute: “ No person shall be imprisoned for debt.” The payment of debts is to be obtained from the property of the debtor'; his body cannot be taken in satisfaction of it. Neither can it be seized and held in restraint as a means of coercing or inducing him to make payment. An attempt made in this State by a creditor to do so would subject him to serious consequences. It is presumed that no one would contend that the citizens and residents of the State are not bound to yield obedience to the supreme law of the land.

The important inquiry concerns the powers of a Court of Equity to interfere and protect the citizens of the State in their constitutional rights, when the processes of legal tribunals are inadequate to the purpose. An examination of authorities of high character will assist us in the decision of this question. In Keyser v. Rice, 47 Md. 203 , it appeared that Keyser and Rice were both residents and citizens of the State of Maryland, and that Keyser was an employee of the Baltimore and Ohio Railroad Company at Cumberland, and that the Railroad Company was indebted to him for wages in an amount less than a hundred dollars, and that Rice had caused an attachment to be issued in the State of West Virginia, and laid in the hands of the Railroad Company for the purpose of condemning the debt due to Keyser in payment of a debt due by him to Rice. The debt to Rice accrued subsequently to the passage of the Act of 1874, chapter 45.

This Act exempted from attachment the wages or hire due to any laborer or employee by any employer or corporation to the amount of ⁶¹⁹ a hundred dollars. This Court decided that Rice should be prohibited by injunction from prosecuting his suit for the condemnation of the wages due to Keyser. In its opinion it stated very explicitly certain principles applicable to cases of the kind. We will quote some of them : “As long as a citizen belongs to a State, he owes it obedience, and as between States, that State in which he is domiciled has jurisdiction over his person and his personal relations to other citizens of the State.” “ The power of the State to compel its citizens to respect its laws, even beyond its own territorial limits, is supported, we think, by a great preponderance of precedent and authority.” It also said that the jurisdiction to prevent by injunction suits in other States was not founded ‘ ‘ upon any right to interfere with or control the proceedings of other tribunals in other States, but on the clear authority vested in Courts of Equity over persons within their jurisdiction and amenable to process to restrain them from doing acts which will work wrong and injury to others, and are contrary to equity and good conscience.” It also strongly condemned the effort by a creditor to evade the laws of his own country by a resort to a tribunal of another State for the purpose of obtaining a preference to the injury of other creditors and said that it was against equity to do so.

And it also said at the conclusion of the opinion: “We think the intention to evade is necessarily presumed, when the act is persisted in after knowledge, and still inchoate, against the protestation of the complainant and the process of the Court.” Many high authorities were cited by the Court in support of their opinion. We may say that the decision in Keyser v. Rice has been quoted with approval in Courts of the highest repute. In Cole v. Cunningham, 133 U. S. 107 , this question was considered very fully and elaborately. Keyser v. Rice was quoted and many of the cases which this Court had cited in its opinion.

The learned Court also quoted with approval Dinsmore v. Neresheimer, 32 Hun. 204 , “Where the Supreme Court of New York held that an express company could maintain an action in New York to restrain the defendant, ⁶²⁰ a resident of the State of New York, from prosecuting actions against the company in the District of Columbia, brought to avoid a decision of the Court of Appeals of New York, differing from