6 Dakota 265 | Supreme Court Of The Territory Of Dakota | 1889
(After stating the above foots.) This is a bill filed by the plaintiff, as a judgment creditor, for the purpose of having declared void and set aside a conveyance of the defendants’ lands, alleged to have been made fraudulently, and praying that such lands may be subjected to the judgment recovered by said plaintiff against the defendant John J. Tressel, previous to the filing of this bill, and that the same may be sold in satisfaction of plaintiff’s judgment. The material allegations of the complaint are as follows: That the defendant John J. Tressel and one Stoner were copartners in 1884, engaged in the mercantile business under the firm name of Tressel & Stoner; that during the year 1884 said firm became indebted in the sum of several hundred dollars to the plaintiff; that at that time said firm, and particularly said Tressel, was solvent; that after said indebtedness was incurred the said Tressel purchased the entire interest of said Stoner in the property of the said copartnership, and became the exclusive owner thereof; that said Tressel pretended in 1885 to have become insolvent and unable to pay his debts ; that during that and the following year he made false and fraudulent assignments and conveyances of his property for the purpose of cheating and defrauding his creditors; that he has concealed his property and by sundry mesne conveyances has invested his wife, the defendant Mary S. Tressel, with the apparent title thereto; that on May 3, 1886, the plaintiff, in the district court of this territory, recovered a judgment against the defendant John J. Tressel and said Stoner, and that such judgment was duly entered and docketed in the proper office-; that execution was regularly issued upon said judgment to the sheriff of the proper county, and was before the commeucement of this action returned wholly unsatisfied; that by reason of the fraudulent conveyance made by said defendant John J. Tressel said execution cannot be made or collected ; that about April 8, 1886, said Tressel purchased of one Weisz certain real estate of the value of several hundred dollars, and paid the consideration therefor from his own funds, and became the owner thereof; but, instead of taking the title thereof to himself, pro
To this complaint the defendants demurred on the ground that the complaint did not state facts sufficient to constitute a cause of action, the particular ground of demurrer being that creditors’ bills will not lie in this territory, for the reason that the provisions of the Code of Civil Procedure in regard to proceedings supplementary to execution have superseded the remedy by creditors’ bills, and now furnish in this jurisdiction the exclusive remedy to judgment creditors to subject property to the satisfaction of their debts.
What were the powers of the court of chancery in reference to creditors’ bills ?
The court of chancery formerly had cognizance of bills filed by judgment creditors, after they had exhausted their remedies at law, to subject lands fraudulently conveyed to the payment of their judgments (Edgell v. Haywood, 3 Atk. 357; Edmeston v. Lyde, 1 Paige, 637); and by the filing of such a bill the creditor acquired a lien upon lands which were superior to any subsequent conveyanee. Such bills were sustainable under the ordinary jurisdiction of the court. Its power to hear such cases and set aside fraudulent conveyances which stood as obstructions to executions at law was inherent in the court, and not dependent upon any statute. Beck v. Burdett, id. 305.
Prom its earliest history the court of chancery has exercised the power of compelling the transfer of the title to real estate by obliging parties holding the legal title to convey it, or by directing it to be sold by some officer of the court appointed for the purpose, or by declaring the title by which it was held fraudulent, and subjecting it to sale under an execution at law. Mould v. Williamson, 2 Cox, Ch. 386; Edgell v. Haywood, 3 Atk. 357 ;
It is, therefore, settled beyond question that originally the court of chancery, in the exercise of its equitable powers, had jurisdiction of creditors’ bills brought for the purpose of setting aside fraudulent conveyances, or reaching equitable assets which the defendant had put in the hands of third parties; and the plaintiff in the suit at bar, having exhausted his remedy at law by the return of his execution, as appears from his bill, was in situation to ask the aid of equity to set aside 'the alleged fraudulent conveyance, if the facts sh.ould demonstrate that it was so, and to reach the equitable assets, if any, which had been put out of his reach by the defendant.
The supreme and district courts of this territory have, under the organic law, chancery, as well as common-law, jurisdiction (Organic Law, Comp. Laws, § 33); and hence this complaint in its present form may be maintained unless some other remedy equally effectual has been provided by law. It is claimed that such remedy has been provided by the Code of Civil Procedure in its provisions in regard to proceedings supplementary to execution, and that this remedy is exclusive. We are unable to assent to this
In Field v. Sands, 8 Bosw. 685, it was held that the commencement of supplementary proceedings and the appointment of a receiver therein did not create any lien upon assets previously assigned by the debtor; that such assets could only be reached by a creditor’s suit. A similar decision was made in Conger v. Sands, 19 How. Pr. 8. See, also, Gasper v. Bennett, 12 id. 307. It is doubtless true that in many jurisdictions adequate remedies have been provided by law to accomplish some of the purposes of
The right of a judgment creditor to maintain an action in the nature of a creditor’s bill, notwithstanding the remedy provided by proceedings supplementary to execution, has been frequently held. Thus, in Catlin v. Doughty, 12 How. Pr. 457, it was held that the former action by judgment creditor’s bill was still in force, and might be resorted to by a judgment creditor to reach equitable assets after the return of an unsatisfied execution. ' In Gere v. Dibble, 17 How. Pr. 31, it was held that a creditor’s bill would lie in favor of judgment creditors on their own account to set aside a fraudulent conveyance made by the judgment debtor on his real estate, even after the appointment of a receiver in proceedings supplementary to execution, the judgment constituting the basis of the action having been recovered before the receiver was appointed. In Bennett v. McGuire, 58 Barb. 625, it was held that a judgment creditor, even after having commenced proceedings supplementary to execution, had a right to abandon the same and maintain an action in his own name to set aside a mortgage executed by a judgment debtor as being without consideration, and fraudulent. The following cases will be found, also, to sustain this petition: Bartlett v. Drew, 4 Bans. 444; Phelps v. Platt, 50 Barb. 430; Taft v. Wright, 47 How. Pr. 1; Burt v. Hœttinger, 28 Ind. 217: Parsons v. Meyburg, 1 Duv. 206; and there are others of like import. We cannot assume that the legislature intended to take from creditors any of the remedies that they enjoyed under the court of chancery for the enforcement of their judgment, after having exhausted their remedy at law, and turn them over to the often inadequate and imperfect remedy provided by the statute in regard to proceed
The complaint in the case at bar contains all the allegations necessary under the Code, or which were formerly required by the courts having equity jurisdiction in creditors’ suits brought to set aside fraudulent conveyances as obstructions to an execution at law, and is sufficient.
The demurrer, therefore, must be overruled, and the proforma judgment of the district court reversed, with leave to the defendants to answer within thirty days, on payment of costs and disbursements.
Demurrer overruled, judgment reversed, and defendants have leave to answer within thirty days on payment of costs, in default of which the district court is directed to take the proofs, or direct