(after stating the facts as above.) 1. The first question in order is whether the state should be allowed a priority for either or both of the tax-bills? It seems to be the law in Missouri that for taxes assessed on personal property the state has no lien on the property until an actual levy has been made under the tax-bill. A sale made by an owner of personal property after taxes have been assessed against the same, and
The tax-bill against real estate, as to which the state has a lien paramount to all other liens, stands on a very different footing. The property was sold on the express condition stated in the decree, — that purchasers would take “subject to all tax-liens.” Bids were no doubt made with reference to that provision of the decree, and an order made at this time, directing the payment of the tax-bill in question out of the proceeds of the sale, would, in effect, change the terms of the sale. The proceedings in this court have not interfered with the collection of the bill by the state, or in any manner impaired its security for the same, which is still ample to insure payment. Under the circumstances, no obligation rests on the court to direct the payment of the tax-bill against realty-out of the proceeds of the sale, and the collector will accordingly be left to enforce the lien of the state for that bill by the usual remedy.
2. The next question to he answered is whether persons who have intervened on open accounts against the railway company, either prior or subsequent to the interlocutory decree, are entitled to participate in the distribution of the proceeds of sale, the fund being inadequate to pay even the judgment creditors in full. The bill in this case must be classified as a judgment creditors’ bill, to reach property that either could not be reached by execution at law, or that could not be seized and sold under such process, so as to realize the full value of the judgment debtors’ interest. The fund in court, therefore, is not such a fund as is technically termed “equitable assets,” and as to which the maxim applies that “equality is equity.” Trust Co. v. Earle, 110 U. S. 710-717, 4 Sup. Ct. Rep. 226.
I understand the doctrine to be well settled that the holder of an un-liquidated legal demand — that is to say, a demand not reduced to judgment — cannot maintain such a bill as this, and cannot properly intervene in such a proceeding until his demand is reduced to judgment. A court
There are one or two exceptions to the rule, covering cases where a creditor for any reason cannot sue at law; but the exceptions to the rule are unimportant so far as the case at bar is concerned.
It is not apparent to the court that the claims now under consideration derive any support from the doctrine announced by the supreme court of the United States in a series of cases beginning with Fosdick v. Schall, 99 U. S. 253, and ending with Kneeland v. Trust Co., 136 U. S. 89, 10 Sup. Ct. Rep. 950. As already appears, this is not a bill by bondholders to foreclose a mortgage covering the entire property of a railroad company, and all of its future acquisitions of property, as well as the net income of the company. The case shows no application of earnings by the defendant company to the payment of claims of judgment creditors, that should of right have been otherwise applied to the payment of the unliquidated demands now on file. There has been no diversion of funds, such as a court of equity can remedy by using the funds in its hands to pay such demands. The fact seems tobe that all the claimants stand on the same‘plane, save that some have been more expeditious in reducing their claims to judgment. All the demands — those that are liquidated and those that are'unliquidated — are for money or materials supplied to the railway company to enable it to operate its road and discharge its duties to the public.
In cases like the one at bar, where the aid of a court of equity is sought by judgment creditors to reach property that cannot be reached by execution, the court does not proceed, when the property'is in its hands, to distribute it ratably among all classes of creditors. On the contrary, it follows the law, and recognizes the priority that those judgment creditors who have moved in the .cause would have obtained by the levy of an execution at the time of filing the bill, if no obstacles had stood in the way. of the levy of such process. The filing of a bill by judgment creditors has often been termed an “equitable levy,” entitling those who file the bill to, priority. Trust Co. v. Earle, supra; Pullis v. Robison, 73 Mo. 201; Rappleye v. Bank, 93 Ill. 396; Gordon v. Lowell, 21 Me. 251; Miers v. Turnpike Co., 13 Ohio, 197; Jones v. Arkansas, etc., Co., 38 Ark. 17; Edmeston v. Lycle, 1 Paige, 637; Sage v. Railroad Co., 125 U. S. 379, 8 Sup. Ct. Rep. 887.
I conclude, therefore, that the claimants on open account are not entitled to participate in the proceeds of the sale,, inasmuch as the fund is insufficient to pay the judgment creditors.
3. The remaining question to be disposed of is one that arises between the judgment creditors themselves. The original complainants concede, or rather consent, that all judgment creditors who came in prior to the interlocutory decree, and whose judgments were established by that de-
Upon the whole, I conclude that those creditors whose judgments were established by the decree are entitled to a priority. From what has been heretofore said, it follows, also, that the St. Louis Ore & Steel Company is not entitled to any preference over other judgment creditors whoso demands were established by the decree. An order of distribution may be prepared, in accordance with these views, and, if deemed necessary, a reference may be made to a master to apportion the fund, and compute how much is due to each creditor after payment of ail costs.
ON REARGUMENT.
(November 24, 1890.)
The question considered in the third paragraph of the foregoing opinion has been reargued. In behalf of those judgment creditors who did not intervene until after the interlocutory decree had been (filtered, it is strenuously contended that they have the right to share in the distribution of the fund on an equality with those who intervened prior to the decree. Many authorities are cited and relied upon, particularly , Jones v. Davenport, 19 Atl. Rep. 22, and Johnson v. Waters, 111 U. S. 640, 4 Sup. Ct. Rep. 619. Roth of the cases last mentioned were bills filed by creditors of a deceased person against his executor, to obtain payment of their debts out of the estate of the deceased. Incidentally, the bills prayed to have certain fraudulent conveyances sot aside that had been made by the deceased in his life-time, or by the executor subsequent to his death. But in both cases the object of the complainants was to obtain an account and distribution among creditors of
Now it is true, as has been urged, that the suit at bar is not a creditors’ bill, but is a proceeding by judgment creditors to reach property that either could not be reached at all, or that could not be effectively reached by execution at law; and, in such cases as is sufficiently shown by authorities heretofore cited, the filing of a bill is an equitable levy, and entitles the complainants in whose behalf such a bill is first filed to a priority. I have no doubt that the three complainants by whom the bill in 'this .case was filed might have secured a priority by filing the same for their own benefit; but they did not do so. By the very terms of th'e bill, they professed to be acting, not only for themselves, but “in
Another matter that cannot be overlooked is the fact that no order had been made, prior to the interlocutory decree, requiring persons in whose behalf the bill was filed to intervene by a given day, or be barred of their rights. Under all these circumstances, and in view of the strong disposition invariably shown by courts of equity to preserve the rights of parties rather than to forfeit them, unless there has been gross negligence or laches, I ain compelled to hold that those judgment creditors of the defendant, who have intervened since the 24th of April last, when the interlocutory decree was entered, are entitled to a ratable share of the proceeds of the sale, if on an examination of their judgments before the mas’er they are found to be valid.
After a more thorough consideration of the question, I am convinced that the former ruling is indefensible. The case of Trust Co. v. Earle, supra, does not sustain the former ruling, because the bill in that case was filed in behalf of the complainant alone, in consequence of which he secured a priority.
It is suggested by complainants’ counsel that, although the bill in this case was filed in behalf of all judgment creditors, yet the prayer of the bill is, that after the sale the fund realized may be distributed among tne parties in whose behalf the suit was brought, “according to their respective rights and equities.” by reason of the form of the prayer for relief, it is suggested that the original complainants did not waive any of their rights; and, as the original complainants and those who intervened prior to the decree all hold judgments rendered at the October term, 1889, of the St. Louis circuit court, whereas the other judgment creditors hold judgments recovered at a subsequent term, it is argued that the former are entitled to priority on that ground. This suggestion would have some weight if it appeared that complainants, when the bill was filed, had, by virtue of their judgments, a lien under the statutes of Missouri on all of the property sold by order of this court, out of which the fund for distribution arises. But such is not the fact. The bill in this case did not allege the existence of such a lien, nor has the court by its previous decree so determined. According to the avermeiits of the bill, the complainants were not entitled, under the laws of the state, to sell the defendant’s railroad by execution under a judgment at law,
The previous order of distribution, made on the' 28d of September, must be modified in accordance with these views.