Perrine v. Perrine

63 N.J. Eq. 483 | New York Court of Chancery | 1902

Pitney, Y. C.

The petitions and orders are all within the rule laid down in Iauch v. de Socarras, 11 Dick. Ch. Rep. 524, and are therefore not orders of course. The decision in Iauch v. de Socarras was not varied or disturbed by the decision in Morehouse v. Kissam, 13 Dick. Ch. Rep. 364. In the latter case several judgment creditors united in a bill to set aside a conveyance of land on the ground that it was fraudulent against each of them. And the defendant who held the title attacked had his “day in court,” and an opportunity to defend as to each of them. This opportunity to defend as to each judgment is a right of which this court cannot deprive the defendant. It is not necessary, however, to express any opinion as to the merits of the present applications as tested by the rule laid down in Iauch v. de Socarras. The orders must be set aside, for two reasons.

In the first place, they were made without any notice to either the complainant or defendants, and, as before observed, being orders to which the petitioners are entitled as of course, notice must be given. It is to be observed that the second amended bill, which is the one under which the cause proceeded, does not contain any statement that it is filed for the benefit of all creditors. Hence it cannot be treated as a consent on the part of the complainant for other judgment creditors to come in. In lauch v. de Socarras the complainant did consent, in open court, that the other judgment creditors should come in as parties complainant; but the orders were stricken out because the defendant did not so consent. Hence, I repeat, notice was necessary to both complainant and to such of the defendants as hold the title attacked.

The necessity of this notice is manifest when we consider that, in cases like the present, the real defendants are not the judgment debtors, but the holders of the' title attacked for fraud, and this title may be judicially determined to be invalid as against the complainant, and, at the same time, to be quite valid as against other judgment creditors of the grantor. Iauch v. de Socarras, supra. And as between the grantor or settler and the depositary of the title, the proceeds of the sale belong to the holders of the title, so that those proceeds are not necessarily assets which must be applied to the payment of all the judgment creditors of the grantor or settler.

The question whether other judgment creditors can participate in such surplus as remains after paying complainant, raises a distinct issue, which, in my judgment, this court has no power to determine, except after the holder of the title attacked has had an opportunity to be heard upon it, according to the rules and practice of the court and the fundamental principles of justice.

If, upon proper notice given, and after hearing both the complainant and the defendants, the court should be of opinion that it is a proper case to allow the petitioners to come in as parties complainant, I am of the opinion that the terms upon which they should come in should be settled by the court in the first instance.

In the second place, the orders were made upon the. advice of the advisory master—and, of course, without inspection by the chancellor—in direct disregard of Eule 194, which provides that after a cause has been referred to a vice-chancellor, all proceedings therein must be had before him, and hence it was not in the province of another judge to make these orders. It was for this reason that the chancellor declined to hear the present motion.

In this case, as in Iauch v. de Socarras, the petitions untruly stated .that the bill was filed for the benefit of the complainant and all other creditors who chose to come in and contribute to the expense of the suit. As remarked in Iauch v. de Socarras, I think this statement in a bill entirely immaterial. It can only operate as an invitation by and consent on complainant’s part to other creditors to come in. It cannot alter the essential character of the bill, or dispense with the necessity of notice to the defendant whose title is attacked.

The five orders will be set aside and discharged, with costs. I add “with costs” because the solicitor of the petitioners should have known what was the rule as settled in Iauch v. de Socarras, and the order admitting them was apparently produced by the untruthful statements of the petitions.

I have not overlooked the circumstance that the decree heretofore made in the cause on the merits, so far as it affects Samuel E. Perrine, is appealed from. That appeal leaves undisturbed the power of the court pending the appeal to deal with the proceeds of the sale of the land mortgaged to the other son, and also to deal with the conveyances to the wife. The cause is only partially removed by the appeal, and hence it is unnecessary to consider the power of the court to deal with the present question if the whole cause had been removed.