26 Haw. 351 | Haw. | 1922
OPINION OF THE COURT BY
Petitioner filed his bill entitled “Bill for Discovery, Injunction and Relief in Equity,” but essentially a creditor’s bill, to subject a certain promissory note and mortgage, executed by the respondents Cecil L. Bell and Nellie B. Heffernan, alleged to belong to the respondent Barton D. Slegman, but standing in the name of his wife Lucile R. Slegman, in the actual possession of the Henry Waterhouse Trust Company, Limited, to the payment of his alleged debt against said Barton D. Slegman. It is
Where tbe rule has not been modified by statute it is tbe general rule, to wbicb there are a few exceptions, that a creditor cannot resort to equity for aid in tbe collection of bis debt until be bas established bis claim by procuring judgment thereon. . (Middleditch v. Kalanianaole, 18 Haw. 272; D’Herblay v. Macomber, 20 Haw. 274; H. B. & M. Co. v. Bartlett, 23 Haw. 192.) It bas been held that our statute does not modify tbe general rule. (Middleditch v. Kalanianaole, supra.) It remains then for tbe petitioner to bring bis case within an exception to tbe general rule or else fail.
Creditors’ bills originated in tbe ineffectiveness of legal executions and were designed to aid creditors, who, having exhausted their legal remedies, still remain with their debts unsatisfied, to reach property of their debtors not reachable by ordinary legal process. Tbe theory upon wbicb equity jurisdiction bas developed is that it should afford a remedy for every wrong, reparation for wbicb is
It has also been held that the insolvency of a judgment debtor renders the issuance of an execution and a return thereof nulla bona unnecessary as a condition precedent to the filing of a creditor’s bill although this holding is not universally followed. (Thurmond v. Reese, 3 Ga. 449, 46 Am. Dec. 440; Miller v. Dayton, 47 Ia. 312; Turner v. Adams, 46 Mo. 95; Bomberger v. Turner, 13 Oh. St. 263, 82 Am. Dec. 438; Enright v. Grant, 5 Utah 334; Whitehouse v. Point Defiance etc. R. R.
As to whether or not the insolvency of the debtor will enable the creditor to file a creditor’s bill before having-reduced his claim to judgment the cases are also in almost hopeless conflict. In one line of cases it is held that a creditor should .not be required to procure a judgment upon which execution must prove fruitless—that it may be otherwise satisfactorily proved to the court that the debtor has not sufficient property of which levy can be made by legal process and that the creditor should not be prejudiced in the enforcement of his rights by useless delay. (Austin, Nichols & Co. v. Morris, 23 S. C. 393; Alabama Iron etc. Co. v. McKeever, 112 Ala. 134; Kempton v. Hallowell, 24 Ga. 52, 71 Am. Dec. 112; Earle v. Circuit Judge, supra.) It is believed, however, that these cases do not meet the argument set forth in the cases holding that a judgment is a prerequisite to the creditor’s right to file his bill against an insolvent debtor. The recovery of a judgment against an insolvent can scarcely be considered useless since it establishes the creditor’s claim, which cannot properly be done in- equity. (Austin v. Bruner, 169 Ill. 178; Clark v. Raymond, 84 Ia. 251; Kankakee Woolen Mill Co. v. Kampe, 38 Mo. App. 229; Estes v. Wilcox, 67 N. Y. 264; Ginn v. Brown, 14 R. I. 524; McKeldin v. Gouldy, 91 Tenn. 677.)
The petitioner has urged the insolvency of the debtor as a reason why he should be permitted to pursue his equitable remedy without first having obtained a judgment at law. In accordance with the great weight of authority and what we regard as the better reasoning we hold that the insolvency of the debtor does not excuse the creditor from first procuring a judgment before filing his bill.
It is also suggested that the debtor’s estate in the note and mortgage is a mere equitable one which cannot be
The decree sustaining the demurrer is therefore affirmed.