Mathews v. Mobile Mutual Insurance

75 Ala. 85 | Ala. | 1883

BRICKELL, 0. J.

The court of probate lias power, equivalent to that of courts of law, to enforce satisfaction of its decrees for the payment of money, by the ordinary writ of fieri facias, or execution. — Code of 1876, § 711. All writs of fieri facias, issuing from a court of record, are a lien-on the lands and personal property of the defendant, subject to levy and sale, within the county of the sheriff to whom it is delivered for execution ; the lien commencing from the day of delivery, and continuing as long as there is a continuation of the writ, and of its delivery to the sheriff, without the lapse of an entire term. — Code of 1876, § 3210. As to the lien, there has been no distinction, and there is no room for a distinction, between writs of fieri facias issued from the court of probate, and such writs issued from courts of law — they stand upon an equality.

The lien of an execution, by which is intended a fieri facias, is operative upon, and binds all property, real or personal, which is the subject of levy and sale in obedience to its mandate ; and, of consequence, it is sometimes termed a general lien, to distinguish it from liens which operate only on specific or particular property. And the lien operates and binds, not only the property subject to its mandate, which is in the possession of the defendant, or the title to which stands in his name; but it operates equally ou all such property, with the title to which he has parted for the purpose of hindering, delaying, and defrauding his creditors, until there is the coming in of a bona fide purchaser, without notice, and for a valuable consideration, from the fraudulent grantee or donee having possession. The conveyance or transfer of the property, though it may be valid between the parties, is invalid — it is void — as to creditors. And creditors may disregard it entirely, and proceed to levy and sell the property under legal process; or they may proceed, in a court of equity, to remove the conveyance or transfer as an obstacle to the advantageous enforcement of their legal rights. Whichever is the remedy they elect to pursue, it is but a remedy for the enforcement of the lien of the fieri facias.—Freeman on Executions, §§ 136, 430; Carter v. Castleberry, 5 Ala. 277; Dargan v. Waring, 11 Ala. 988. The lien, so long as the creditor keeps it alive by the regular issue and delivery of executions to the sheriff, can not be defeated or impaired by the activity of creditors acquiring a junior lien ; nor is it lost by mere passiveness — by mere neglect to force a levy and sale; there muse be culpable laches, or fraud upon the part of the creditor, to work its loss. Wood v. Gary, 5 Ala. 43 ; Johnson v. Williams, 8 Ala. 529 ; Turner v. Lawrence, 11 Ala. 426 ; De Vendell v. Hamilton, 27 Ala. 156.

These well settled principles leave no room for doubt, that the executions issuing from the court of probate, which were in the hands of the sheriff when the bill was filed by the insurance company, for the subjection of lands, the legal title to which had' resided in the defendant in execution, and which he had conveyed fraudulently, were a lien, operative and binding upon the lands, and, by reason of its seniority, entitled to prevail over all conventional liens, and all liens acquired by legal or equitable process, which were junior in point of time.

In the absence of statutes enlarging its jurisdiction, a court of equity did not intervene for the assistance of creditors who had not reduced their demands to judgments at law. Until the creditor had obtained judgment at law, the justness of his demand, and his right and relation as a creditor, were not established; and to compel payment of a mei’e legal debt, the court would not interfere.—Lehman v. Meyer, 67 Ala. 396. But the creditor having obtained judgment and execution at law, the court assisted him, first, to remove fraudulent transfers or conveyances of property, upon which the judgment or execution operated a lien. The court, in this case, simply rendered aid in carrying into effect the judgment and execution at law. The lien of the creditor was acquired at law, and not through the instrumentality of the court of equity.—Dargan v. Waring, 11 Ala. 988 ; Evans v. Welch, 63 Ala. 250. And the court intervenes without awaiting the return of execution — it intervenes because the creditor had a lien.—Lehman v. Meyer, supra; Evans v. Welch, supra. Until the filing of the bill, the issue and service of process, the lien of the execution is general, binding and operative upon all property subject to levy and sale ; to which all subsequent alienations made by the judgment debtor, and all subsequent liens arising by operation of law, are subordinate, so long as the execution is kept alive. The filing of the bill is not the creation of a new or other lien ; like a levy, it simply individualizes and renders the general lien specific as to the particular property, separating that property, in this respect, from other property covered by the general lien. The court also assisted judgment creditors, who, by a return of execution “ no property found,” showed that legal remedies had been exhausted, to reach assets not subject to execution at law. The assets not being subject to execution at law, a lien upon them could not be acquired otherwise than through the aid of a court of equity. The filing of the bill, and the due issue and service of process, created a lien upon such assets as the bill sought to reach; it was said to be in the nature of an “ equitable levy.”—Miller v. Sherry, 2 Wall. 237 ; Tilford v. Burnham, 7 Dana, 109; Beck v. Burdett, 1 Paige, 305 ; Corning v. White, 2 Ib. 567 ; Storm v. Waddell, 2 Sandf. Ch. 494. The creditor first filing bill, and obtaining service of process, acquired the prior lien, which would prevail against creditors subsequently coming in, though they were senior judgment creditors, and, at law, may have had a priority of right to satisfaction from legal assets.—Boynton v. Rawson, 1 Clarke Ch. 410; Lucas v. Atwood, 2 Stew. 378; Eaton v. Patterson, 2 St. & Port. 9. But a junior judgment creditor, proceeding in a court of equity for the removal of fraudulent conveyances or transfers of property, subject to execution at law, did not acquire a preference over senior judgment creditors who had the prior lien at law.—Dargan v. Waring, supra ; Scouton v. Bender, 3 How. Pr. 185 ; Bump on Fraud. Con. 535. A court of equity, in dealing with legal rights, adopts and follows the rules of law, in all cases to which those rules are applicable; and whenever there is a direct rule of law governing the case in all its circumstances, the court is as much bound by it as would be a court of law, if the controversy was there pending. — 1 Story Eq. § 64. The court comes as an auxiliary, to give effect to, and render more available legal liens, not to displace them, nor to subvert the order of priority which the law has established. The senior judgment creditor may have lost his priority, and will lose it by the neglect to sue out execution from term to term; and if it is lost by such neglect, the junior creditor who is more diligent, and ' has resorted to equity, will be preferred. But, until the priority given by law is lost by laches, it will be protected and preserved. All liens acquired by operation of legal or equitable process, are in subordination to prior liens or equities, unless protection against them is afforded by the statutes of registration. The lien operates upon, and binds only the right, or title, or interest, or estate of the debtor; they are incapable of creating any higher right, title, interest, or estate.—Smith v. Perry, 56 Ala. 266.

The statute (Code of 1876, § 3886), authorizes a creditor not having a lien, a creditor at large, to proceed in equity to subject property which the debtor has fraudulently conveyed, or attempted to convey fraudulently. It was under this statute, that the insurance company, a simple contract creditor, filed the bill to reach and subject the land which Matthews had conveyed in fraud of his creditors. Whether a simple contract creditor, proceeding under the statute, acquires a lien upon the property which the debtor has conveyed, or attempted to convey fraudulently, or whether the bill operates as a Us pendens, affecting and binding all parties acquiring rights and interests in the property subsequently, is not, probably, of practical importance. In either event, it is in subordination, not in destruction of prior liens and equities which are bona fide. It is rights, or interests, or equities which are acquired subsequently, that must yield to the lien' or Us -pendens. The creditor at large, resorting to a court of equity under the statute, has the rights of a judgment creditor, so far as a judgment was deemed essential to the jurisdiction of the court. But he has no higher rights, and when the lien or right of a judgment creditor would yield to senior rights or equities, the rights of the creditor at large derived from the statute must also yield. We can dis-sover no reason for displacing the prior lien of the execution issuing from the court of probate. If the controversy were in a court of law, which was proceeding to direct the sheriff in the distribution of the proceeds of the sale of the lands, they would be entitled to priority of payment; and it is the duty of the court of equity, in this respect, to follow the law.

The result is, the chancellor erred in not decreeing satisfaction of the execution in priority of the decree in favor of the insurance company ; and for the error the decree must be reversed and the cause remanded.