54 W. Va. 324 | W. Va. | 1903
Lead Opinion
William II. Frye complains of the dissolution of an injunction and dismissal of his hill, by a decree of the circuit court of Hardy County. It appears from the bill that, on the 18th day of February, 1902, John R. Miley executed his negotiable note for the sum of $1,511.75, payable to the order of Annie L. Miley nine months after date, with interest from date, at the Shenandoah Valley Bank of Winchester, Virginia, and endorsed by the said Annie L. Miley, G-. W. Miley and P. J. J. Walker, and then delivered to said Frye. The note was given for the purchase money. of property purchased by said John R. Miley at a sale made by Frye. On the 22nd day of September, 1902, about seven months after the date of the note, two months before its maturity, Frye instituted this suit, and, at October rules, following, filed his bill, setting forth in detail conveyances by John R. Miley, Annie L. Mile)', G-eorge W. Miley and P. J. J. Walker of all the real estate, and practically all the personal property, owned by each and every one of them, made between the 17th day of July, 1902, and the date of the institution of the suit, alleging all of said conveyances to have been made for the purpose of hindering, delaying and defrauding the plaintiff in the collection of his said debt, and praying that each and all of them be set aside and the real estate subjected to the payment of the debt, and that Annie L. Miley, George W. Miley, and P. J. J. Walker be restrained, by injunction, from transferring or assigning certain purchase
The injunction was awarded on the 11th day of September, 1902, and, on the 29th day of May, 1903, the bill was held insufficient on demurrer, the injunction dissolved and the bill dis-dismissed.
This decree is based upon the theory that a suit to set aside conveyances on the ground of fraud cannot be instituted by a creditor whose debt is not due; and on the further ground that if an attachment would, in such case, be maintainable and give equity jurisdiction to charge the land with a lien in favor of the creditor, the bill docs not pray an attachment, and the record does not show any affidavit therefor, nor any application to the court for an order of attachment.
Prior to the enactment, in 1849, of what is now section 2 of chapter 133 of the Code of this state, a creditor could not resort to a court, of equity to impeach a conveyance for fraud, without having first reduced his demand to judgment. This made it a lien upon the debtor’s real estate, and, the fraudulent conveyance being an obstruction to the enforcement of the lien, equity interposed for the removal of the obstruction. When the property, fradulently conveyed and sought to be subjected, was personal property, the creditor was required, not only to obtain a judgment, but also to take out execution and have it levied, or returned, so as to show that he. had exhausted all legal remedies. Chamberlain v. Temple, 2 Rand. 384; Tate v. Liggat, 2 Leigh 84; Kelso v. Blackburn, 3 Leigh 300; Rhodes v. Cousins, 6 Rand. 189; Wallace v. Treacle, 27 Grat. 479.
In the absence of statutes conferring jurisdiction in equity at the instance, of creditors at large, the general rule is that there is no such jurisdiction. There are exceptions to the rule, it is true, but this case does not fall within any of them. “Occasional exceptions may be found in some states to the rule that equity will not interfere at the instance of a simple contract creditor. But the exceptions prove the force of the rule.” Wait Fraud. Conv. section 53. This author, in the same section, analyzes the cases which are supposed to establish these exceptions and substantially denies their soundness. He concludes by saying: “Creditors will, as a rule, find these exceptional cases not easy
The reasons assigned for this rule are that a court of law is the proper forum in which to establish debts; that the aid of a court of equity is given for the enforcement of a lien and the removal of obstructions in the way of execution at law; that equity w'ill not aid any person until it is made certain that he has a claim upon the debtor; and that a creditor at large has no right to interfere with the debtor in the disposition of his property. 5 Enc. PI. & Pr. pp. 470-473.
Section 2 of chapter 133 of the Code of 1899 does away with this rule by providing that a creditor, before obtaining a judgment or decree for his claim, may institute a suit in equity to set aside fraudulent conveyance, and, in such suit, have all the relief which he would be entitled to after obtaining a judgment or decree for his claim. This statute gives such creditor a lien upon the property fraudulently conveyed from the time of the commencement of the suit in equity. Wallace v. Treacle, 27 Grat. 479; Clark v. Figgins, 27 W. Va. 663; Foley v. Ruley, 50 W. Va. 158; Sweeney v. Sugar Co., 30 W. Va. 443; Geiser Mfg. Co. v. Chewning, 52 W. Va. 523.
But for this statute, it is plain that no such suit could be brought. It is an enabling statute, doing away with the rule which prevented relief under certain conditions. It does away with that rule only to the extent of the right given by the statute, namely, to sue in equity to annul a fraudulent conveyance before reducing the claim to judgment. Whether such suit can be brought before the debt is due is an entirely different matter. This last question came before the Virginia court of appeals in Duvries v. Johnson, 27 Grat. 805, and the court divided evenly upon it, Judges Moncure and Anderson standing for the affirm a-
In Alabama, there is a statute similar to ours, providing that a creditor who has not acquired a lien .for his debt may sue in equity to set aside a fraudulent conveyance. The supreme court of 'that state, although most liberally expounding the statute
This seems to be the construction put upon such statutes in most, if not all, the states where they exist. Thus, in Maryland, it is held that the jurisdiction of equity is not thereby so extended as to warrant the appointment of a receiver to take charge of the property or an injunction to restrain the debtor from disposing of his property. Uhl v. Dillon, 10 Md. 500; Hubbard v. Hubbard, 14 Md. 114; Balls v. Balls, 69 Md. 388.
Of such statutes, 5 Ene. PI. & Pr., at page 477, says: “But they do not authorize the filing of a bill before the maturity of the debt, nor do they, unless it is expressly so provided, authorize a bill to enjoin a contemplated disposition by the debtor of his property.” Mr. Hogg, in his valuable work, entitled Equity Principles, at section 183, says: “But no suit can be maintained to set aside a conveyance as fraudulent, unless the debt upon which the plaintiff’s suit is predicated, is due and payable at the time the suit is brought.”
A very substantial reason suggests itself at this point for so limiting the efEect of the statute. The commencement of suit under it gives a lien and priority of lien over the claims of all creditors at large subsequently suing. To hold that one whose debt is not due may acquire it, confers upon him a great advantage not expressly given by the statute. It also overturns the
Much is said in the brief of counsel for the appellant on the subject of the odium of fraud in the eye of a court of equity and the extent to which it vitiates transactions into which it enters. All this is granted, but it does not rise to the question presented here. The inquiry now is, not the extent to which equity may go in relief against fraud when the court has acquired jurisdiction, but when and how the jurisdiction may be invoiced. It is a question of time when the remedy sought may be had.
As already indicated, a creditor has a remedy against his fraudulent debtor by attachment in a suit in equity, before the debt is due, and counsel for appellant here insists that the bill ought not to have been dismissed because it shows sufficient ground for an attachment. But no attachment was ever taken out or applied for. Whether, in order to give jurisdiction in such case, the attachment must be sued out at the institution of the suit, and the bill show, by proper allegations, that it is a suit by attachment, it is unnecessary to say. It is certain that, in order to confer such jurisdiction, an attachment must be taken out or asked for at some stage of the proceeding. Nor is it necessary to say whether, in addition to the allegations of the bill sworn to, there must be an affidavit setting forth the grounds of the attachment. It seems.-however, that there should be. Taylor's Exr. v. Cox, 32 W. Va. 148; Ciroda v. Buchanan, 22 Grat. 205. Hogg’s Equity Principles, at section 37, says: “It would
There is a very short paragraph in the bill charging that all the conveyances were made for the purpose of giving preferences among the creditors of the parties to the note. In addition to this, there is an averment of the insolvency of said parties. But the bill does not indicate the existence of antecedent debts to secure which the conveyances were made. One deed of trust is alleged to have been made to secure what may have been an antecedent debt, but it is not averred to have been antecedent, but the property thereby conveyed was twelve - head of cattle and plaintiff says in his bill he is informed that they have been driven to market and disposed of. One or two other deeds of trust are set out, reciting that the debts thereby secured were for money loaned at the time of the execution of the instruments. Most of the conveyances are, on their faces, absolute, not purporting to have been given to secure debts. It is deemed unnecessary to go through, and analyze, in this opinion, all these conveyances, for the purpose of showing that the bill is insufficient under the preference statute. In this respect, there is an absolute want of that certainty and definiteness required in such bill.
The decree complained of sustains the demurrer to the bill, dissolves the injunction, dismisses the bill and gives the defendants their costs, without putting in any clause saving to the plaintiff the right to prosecute any other proper suit for relief in the premises. Obviously, he is entitled to.relief after the maturity of the debt by just such a suit as he has brought, if the allegations of his bill be true. Moreover, if he had sued out an attachment in this suit at its inception or at any time before it was dismissed, upon a sufficient affidavit, or possibly upon the facts set forth in his bill verified by affidavit as it is, he might have had relief without waiting for the maturity of his debt. Then ought the court to have put into the decree a saving clause ? This depends upon whether the decree would bar another suit for relief in respect to the same matters.
It is a decree upon a demurrer sustained. By demurring, the
In Gould v. Railroad Co., 91 U. S. 526, 533, Mr. Justice Clifford, after reviewing many authorities, lays down the following rules as dedueible from them:
“(1) That a judgment rendered upon demurrer to the declaration or to a material pleading, setting forth the facts, is equally conclusive of the matters confessed by the demurrer as a verdict finding the same facts would be, since the matters in controversy are established in the former case, as well as in the latter, by matter of record; and the rule is, that facts thus established can never bé contested between the same parties or those in privity with them.”
“(2) That if judgment is rendered for the defendant on demurrer to the declaration, or to a material pleading in chief, the plaintiff can never after maintain against the same defendant, or his privies, any similar or concurrent action for the same cause upon the same grounds as were disclosed in the first declaration; for the reason that the judgment upon such a demurrer determines the merits of the cause, and a final judgment deciding the right must put an end to the dispute, else the litigation would be endless.”
“(3) But it is equally well settled, that, if the plaintiff fails on demurrer in his first action from the omission of an essential allegation in his declaration which is fully supplied in the second suit, the judgment in the first suit is no bar to the second, although the respective actions were instituted to enforce the same right; for the reason that the merits of the cause, as disclosed in the second declaration, were not heard and decided in the first action.” The syllabus of this ease reads as follows: “If judgment is rendered for the defendant on demurrer to the declaration, or to a material pleading in chief, the plaintiff can never after maintain against the same defendant or his privies any*333 similar of concurrent action for the same cause upon the same grounds as were disclosed in the first declaration; hut, if the plaintiff fails on demurrer in his first action from the omission of an essential allegation in his declaration which is supplied in the second suit, the judgment in the first suit is not a bar to the second.”
As to when, a judgment upon a demurrer is a bar to a subsequent suit, see Bissell v. Spring Valley Township, 124 U. S. 225; McLaughlin v. Doane, 40 Kan. 392; Insurance Co. Smith, 117 Mo. 261, 297; Skinner v. Hock. Musser & Co. 16 Ia. 23; Terry and Others v. Hammons et al, 47 Cal. 32; Robinson v. Howard, 5 Cal. 428; Eslep v. Larsh, 21 Ind. 190; Wilson v. Ray, 24 Ind. 156; Campbell v. Hunt, 104 Ind. 210; Los Angeles v. Mellus, 58 Cal. 16; Gray et al v. Gray et al 34 Ga. 499; Carlin v. Brackett, 38 Minn. 307; Johnson v. Pate, 90 N. C. 334; Felt v. Turnure, 48 Ia. 397; Bouchad v. Diaz, 3 Denio (N. Y.) 238; Aurora City v. West, 7 Wall 82; Gilman v. Rives 10 Pet. 298.
“A decision upon a demurrer which has, however, clearly gone to the merits of the case, bv being based distinctly upon a specific allegation of the facts touching the substance of the action or the defense, is an effectual bar to further litigation; and upon the facts admitted it is held to be as conclusive as a verdict; and this will be true in regard to such facts, though the second litigation, being between the same parties, is not upon the same cause of action.” Big. on Est. 56.
The conclusion resulting from an examination of the record in the light of these principles is, that another suit by attachment, based upon the same facts as it would have been, and will still be, barred, by the decree in this cause. Whether a second suit, under section 2 of chapter 133 of the Code, brought after fhe maturity of the debt, would be barred is not so clear. A new essential fact, namely, the maturity of the debt, would appear in the case, and it would not be the same matter as that determined in the present suit. This, hoivovcr, we do not decide as it is unnecessary; but as it would clearly bar a proceeding by attachment upon the same facts, a remedy to which the plaintiff ivas entitled, as clearly appears from the allegations of the bill, the court ought not to have pronounced such a decree, but should have dismissed the bill without prejudice. In failing to do this,
Ought the appellant to have costs in this Court? In Vandorn v. County Court and Christian v. Vanca, costs were given to the appellees, as the parties substantially prevailing, but, in those eases, nothing was said in the court .¡below against the failure to put in the clause, “without prejudice.” In Carberry v. Railroad Co., costs in this Court were awarded the appellant, but objection to the decree for want of saving clause, was made in the court below. In this case, no such objection appears and the appellant stands as did the appellants in the two cases .above mentioned in which costs were awarded the appellees.
There are two reasons in those cases, and in this one, for refusing costs to the appellant. Hie brought his suit in a court which could not entertain it, and thereby superinduced the error of which lie has the right to complain. He is also in fault, in having remained silent when the decree was entered. Had he objected to it and asked that it be made to show that the dismissal was for want of jurisdiction or that it was to be without prejudice, his situation would be far better, and like that of the appellant in Carberry v. Railroad Co., and there would probably have been no necessity for his coming hero at all. On the ground of their having been in fault, the appellants in Freer v. Davis, 52 W. Va. 1, were refused costs. In doing so, this Court followed the Supremo Court of the United States in Railroad Co. v. Swan, 111 U. S. 397, in the opinion in which the question is fully discussed. The reason of that opinion as quoted in Freer v. Davis, 52 W. Va. 16, clearly applies here.
For the reasons above given, the decree eomplianed of is to be amended so as to save to the appellant the right to prosecute •rnv other proper suit, in respect to the matters complained in his bill, and then affirmed as amended, and costs in this Court are to be adjudged to the appellees, as the parties substantially prevailing.
Modified.
Dissenting Opinion
(dissenting.)
I do not agree to the fourth point in the syllabus. It is the duty of the trial court to pronounce, and have entered on its
Concurrence Opinion
I concur with Judge Millek in the above note.
