Allen v. McRae

91 Wis. 226 | Wis. | 1895

' PiNNBT, JV

Under the statute of uses .and trusts'(seo¡ 2077, R. S.) no use or trust resulted in favor of H. S. Allen in respect to the land purchased and paid for by him, the title to which he had caused to be conveyed to the defendant Alice G. McRae by the parties from whom he had purchased it, ■ but the title to the land vested in the defendant Alice G. McRae, the grantee. By sec. 2078, such conveyance'is presumptively fraudulent as against the creditors of Allen, and, if the fraudulent intent is not disproved, a, trust results in favor of such creditors to the extent that may be necessary to satisfy their just demands. In such case the statute, it is held, imposes upon the legal estate in the hands of the grantee in the conveyance a pure-trust in favor of existing creditors of the party paying the consideration, which can be enforced in equity. Miner v. Lane, 87 Wis. 348; Garfield v. Hatmaker, 15 N. Y. 475; Wood v. Robinson, 22 N. Y. 564. The object of this action is to enforce this statutory trust against the property in question, which the debtor never owned and in which he, by the transaction in question, acquired no interest -which he could ever assert. The trust is to be enforced ih favor of his existing creditors “ to the extent that may be necessary to satisfy their demands.” The equity which the plaintiff seeks to enforce is the same, in effect, as in the case Of Miner v. Lane, 87 Wis. 348, where the whole subject was fully considered, and it was shown that a judgment creditor of such debtor could not reach and sell on execution land's thus conveyed, and that an action such as this creates no right to the land, but is a step to enforce a prior existing right; that the equitable rights of all creditors existing at the time of the conveyance “ are equal, and each is entitled to his proportionate share of the property so held in trust.” The case of Miner v. Lane, supra, is clearly decisive of this appeal, and we must hold that the technical questions made as to the mode and form of procedure are not well taken.

1. It is contended that each and all the creditors of Allen -entitled to reach the lands in question to satisfy their debts ought to have been joined by name as plaintiffs, unless it ■appears that they are so numerous that it would be impracticable to join them; and also that the amount and fact of allowance of each claim should have been averred. "We think, however, the action was properly brought in its present form. It is alleged that Allen’s estate is insolvent, and further that an execution on a certain judgment against him in the circuit court had been returned unsatisfied for want of property; and it is alleged in the complaint that no funds belonging to his estate have come into the hands of his administrator, and that there is no property out of which plaintiff can collect her claim. The complaint shows, therefore, that there was just reason to apprehend a failure or want of personal assets for the payment of his debts. German Bank v. Leyser, 50 Vis. 259. Vhere such apprehension exists, the statute (sec. 3835, E. S.) permits “ any one or more of the judgment creditors, or creditors whose claims against the deceased shall have been allowed by the county court or commissioners appointed by said court, on "behalf of all, to bring an action in the circuit court to reach and subject to sale any real estate or interest therein, or any other assets, not included in the inventory, which ought to be subjected to such debts,” without regard to the question of the numerousness of such creditors or whether those having such common interest are few or many. It is impracticable for a creditor desiring to bring such an action to determine in advance what persons, being creditors of the deceased, were such when the real estate in question was purchased and paid for and conveyed to a third party, so that it became subject to a trust in favor of his existing creditors to the extent that might be necessary to satisfy their demands.

2. By sec. 3836, E. S., the action is denominated a “ creditor’s action,” and it is provided that it “ shall not be brought to trial until the sufficiency or the insufficiency of the estate in the bands of the executor or administrator to pay the debts of the deceased shall be' ascertained; if found sufficient, such action shall be dismissed at the cost of the plaintiff; if found insufficient, such action may proceed to trial and judgment, and any property described in the complaint which ought by law to be subjected to the payment of the debts of the deceased, shall be sold under the order of such circuit court; and the proceeds, after paying costs, shall be-applied to the payment of such debts in the same manner as other assets.” The action, under the statute, is a creditor’s action sui generis. It is not necessary that the creditor-bringing it shall have exhausted his remedy at law by judgment and execution. It is enough if he has established his. claim against the estate of the deceased. Nor is it necessary that any inventory shall have been returned, nor that the county court shall authorize or direct the action to be-brought; but “just reason to apprehend,” on the part of the creditor, an insufficiency of assets, is sufficient. When the action is once brought, it awaits further proceedings to apply any assets already in the hands of the executor or administrator, and to determine whether any insufficiency of assets exists so as to justify a trial of the action; and equitable relief will be denied unless it is made to appear that, the debts cannot be realized by the ordinary process of administration in the county court. German Banlc v. Leysery 50 Wis. 258. The creditor takes the risk of having his action dismissed with costs if sufficient assets appear, but, if not, he obtains the benefit of a lis pendens in the meantime,, and has a right to proceed with his action. After the death of Allen it became impossible for the plaintiff to obtain a-judgment at law upon which execution could be issued. She established her claim by its allowance in the county court,, but no execution could be awarded on it. Under such circumstances, equity would have jurisdiction, in the absence of the statutory provisions cited, to grant relief, especially where the creditor suing has a trust in his favor. National T. Bank v. Wetmore, 124 N. Y. 241; Case v. Beauregard, 101 U. S. 688, 690, 691.

3. The allegations that Allen paid and advanced the entire consideration for the purchase of the lands in question, that he caused the title thereto to le conveyed to the defendant Alice C. McRae by good and sufficient warranty deed in the usual form, and that she became invested with the legal title thereto, sufficiently show that the deed to Mrs. McRae had been delivered. The complaint states a sufficient cause of action against her in respect to what appears to be her separate property.

4. Under the former statute (R. S. 1858, ch. 122, sec. 15} it was necessary to join the husband as defendant with the wife, although the action concerned her separate property (Oatman v. Goodrich, 15 Wis. 589); but, under E. S. 1878,, sec. 2608, he may be joined as defendant with her or not, at the option of the plaintiff. The complaint presents a case in respect to which such option exists, and the separate demurrer of the husband, Sector O. McRae, is not well taken.

It follows from these views that the demurrers were properly overruled.

By the Court.— The order of the circuit court is affirmed..

Maeshall, J., took no part.