102 Ind. 233 | Ind. | 1885
The material facts stated in the complaint ■of the appellee are these: Vincent A. Quarl and Samuel Lefevre are non-residents of the State, and the latter endorsed to the appellee two promissory' notes, executed by Bledsoe .and others to the appellee. At the time the notes matured the makers were insolvent, and so remained. At the time of the ■endorsement made by him, Lefevre owed debts amounting to ten thousand dollars, and was the owner of twenty-four shares of the capital stock of a corporation known as the Indiana Chair Manufacturing Company, and to cheat and defraud his -creditors, entered into a conspiracy with Quarl, and, pursuant to the fraudulent purpose, did transfer and assign all of the stock to Quarl on the books of the company, which transfer was accepted with full knowledge of the assignor’s fraudulent intent. Nothing was paid by Quarl for the stock, and he appears on the books of the corporation to be the owner. The prayer is that the court will ascertain the amount due the plaintiff, adjudge the transfer of the stock to be fraudulent, and decree that the property be sold as on execution to .satisfy appellee’s claim. Concurrently with the complaint, the
An affidavit and undertaking in attachment were also filed, and the writ issued at the suit of the appellee was levied on the stock standing in the name of Quarl on the books of the company. The complaint and affidavit for publication were filed on the 17th day of April, 1878. On the 11th day of June, 1878, proof of publication of notice was made. The notice reads as follows:
“ Oliver H. P. Abbett v. Samuel L. Lefevre, V. Augustus Quarl, Indianapolis Chair Manufacturing Company.
“ No. 21,993. Room 4. April Term, 1878.
“Be it known, that on the 17th day of April, 1878, the above named plaintiff, by his attorneys, filed in the office of the clerk of the Superior Court of Marion county, in the State of Indiana, his complaint against the above named defendants for attachment, and that on the said 17th day of April, 1878, the said plaintiff filed in the said clerk’s office the affidavit of a competent person showing that said defendants, Samuel L. Lefevre and V. Augustus Quarl, are not residents of the State of Indiana. Now, therefore, by order of said court, said defendants last above named are hereby notified of the filing and pending of said complaint against them, and that unless they appear and answer or demur thereto at the calling of said cause on the second day of the term of said court, to be begun and held at the court-house, in the city of Indianapolis, on the first Monday in June, 1878, said com*236 plaint and the matters and things therein contained and alleged will be heard and determined in their absence.
“Austin H. Brown, Clerk.”
On the day last named the cause was submitted to the court and .a finding and judgment entered in favor of the appellee. In December, 1879, Quarl appeared and filed a motion to open the judgment, and his motion was sustained. On the 3d day of January, 1880, he filed an answer of general denial, and on the first day of the following July, the cause was, by agreement, submitted to the court for trial. The trial resulted in a finding and judgment for the appellee. In September, 1880, a motion for a new trial was overruled, appeal was taken to the general term, and the judgment of thd special-term affirmed on the 2d day of May, 1881.
The appeilant contends that no jurisdiction of the person of the defendants was obtained, and, therefore, no personal judgment could be rendered. ~We concur with counsel that no personal judgment can be rendered in a case where there is constructive service,.but we can not concur in the conclusion which is deduced from this proposition. It does-not follow that property fraudulently transferred may not be-reached and subjected to sale in an action commenced by publication. A personal judgment is one which binds the defendant; while a judgment which operates upon property is, in its essential features, a judgment in rem. Such a judgment creates no personal liability, but operates upon the particular property which constitutes the subject of litigation. A judgment operating solely upon property can not be made the foundation of an action against the defendant; nevertheless it may effectively operate upon the particular property within the jurisdiction of the court-. If the appellant is right,, then a citizen of Indiana can never reach property within our jurisdiction, if it is claimed by a non-resident. If the-appellant is correct, then our statutory provisions providing foi' attachments against non-resident debtors is absolutely null, for in every case it is necessary to ascertain the amount
It is a general principle that the process of the courts may reach and seize property within their jurisdiction. A man who brings property within the territorial jurisdiction of a ■State subjects it to the laws of that State. “If a.foreigner ■or citizen of another State,” says an able court, “send his property within a jurisdiction different from that where he resides, he impliedly submits it to the rules and regulations in force in the country where he places it. What the law protects, it has the right to regulate.” Clark v. Tarbell, 58 N. H. 88. This general doctrine has been declared by other ■courts, among them our own. Ames Iron Works v. Warren, 76 Ind. 512; Green v. VanBuskirk, 7 Wall. 139; Rice v. Courtis, 32 Vt. 460. It is upon this general principle that cur statutory provisions relative to notice by publication are founded. If property of a non-resident can not be reached by legal process upon constructive notice, then our statutes were passed in vain and are mere empty legislative declarations, without either force or meaning; for, if the person is not within the jurisdiction of the court, no personal judgment can be rendered, and if the judgment can not operate upon the property, then no effective judgment at all can be rendered, so that the result would be that the courts would be powerless to assist a citizen against a non-resident.' Such a result would be a deplorable one. If the rule were that which appellant’s argument asserts, a citizen with a chattel mortgage could not enforce it on property within our borders against a non-resident, nor could a creditor enforce a claim against a man who had fled to Canada and made it his residence, although he had abundance of property within the State. Nor, if the rule were as asserted, could property of non-resident corporations within our limits be reached. But the rule is not as contended for; property within our jurisdiction may be seized upon process issued upon constructive notice. This has been often decided with respect to attachment proceed
Freeman says: “ Proceedings by attachment are not, strictly speaking, in rem, and yet they are sometimes so spoken of; and in some respects their effect is more, and in others less comprehensive than the effect of proceedings in personam. Thus, by the seizure of the property, as where moneys are garnished, jurisdiction is acquired over the fund, so that orders-may be made for its distribution or payment which will bind the owner, though he has not appeared nor been personally summoned in the case, provided such owner is in law or in fact a defendant in the action.” Freeman Judg., section 607a. The Supreme Court of the United States, in speaking of notice by publication, says: “Such service may also be sufficient in cases where the object of the action is to reach and dispose of property in the State, or of some interest therein, by enforcing a contract or a lien respecting the same, or to partition it among different owners, or, when the public is a party, to condemn and appropriate it for a pub-
It is said by appellant’s counsel, that fraud is a question off fact, and, therefore, that such a question can not be tried upon constructive notice. This position is not tenable. Any question affecting the status of the specific property within the jurisdiction of the court and the rights of the parties in the-property may be tried. The purpose of notice by publication is to give the best notice practicable to non-resident defendants, and thus enable the court to fully decide the controversy respecting property within its jurisdiction, no matter what form the question may assume. If this be not true, then in attachment proceedings fraud could never be shown where non-residents were parties, and that this can not be true is too-clear to admit of debate.
The authority to hear and determine a cause is jui’isdiction to try and decide all of the questions involved in the controversy. This principle is an ancient one, and even in the time-when the contest between the chancery courts and the common law courts was hot and angry, it was recognized and enforced. Where the jurisdiction of the court once attaches it extends over the whole case, and the court will determine all
Where there is some notice, although defective, the judgment is not void; if there is notice, although irregular and defective, there is jurisdiction. Brown v. Goble, 97 Ind. 86, auth. p. 89; City of Terre Haute v. Beach, 96 Ind. 143; McCormick v. Webster, 89 Ind. 105; Oppenheim v. Pittsburgh, etc., R. W. Co., 85 Ind. 471; Stout v. Woods, 79 Ind. 108; McAlpine v. Sweetser, 76 Ind. 78; Hume v. Conduitt, 76 Ind. 598; Muncey v. Joest, 74 Ind. 409; Morrow v. Weed, 4 Iowa, 77; Smith v. Engle, 44 Iowa, 265; Ballinger v. Tarbell, 16 Iowa, 491; Freeman Judg., section 126. The rule with respect to notice by publication is the same as to notice by service of summons; there is, indeed, reason for being more liberal in cases of constructive notice than in cases where the service is by summons, for the defendant in the former class of cases is entitled, as
The case of Scott v. Indianapolis Wagon Works, 48 Ind. 75, decides, and rightly decides, that a creditor may maintain a bill against a debtor and his assignee to set aside a fraudulent transfer of the capital stock of a corporation. If that case-stands it rules here, and not only do we feel bound to adhere to it upon the principle of stare decisis, but for, the further reason that it asserts the true doctrine. We can conceive no reason why a fraudulent sale of capital stock in a corporation may not be declared void and the stock made liable to the-claims of the creditors of the assignor. Stock is property, and the policy of the law is to enable creditors to make their debts out of the property of the debtor. What imaginable equity is there in allowing,a fraudulent assignee to hold stock as against creditors ? The property is of a peculiar nature,, and when, as in this instance, transferred on the books of the-company, it can be most effectively reached by a decree of court setting the transfer aside and subjecting the stock to the claim of the creditor. A recent writer says: “ The tendency of the authorities is to reclaim every species of the debtor’s property, prospective or contingent, for the creditor. As has been seen, transfers of intangible rights and choses in action, such as stocks, annuities, life insurance policies, book roy
Suits to set aside fraudulent transfers of property are properly of equitable cognizance. This doctrine we have explicitly affirmed by our decisions, that such suits must be tried, by the court, and not by a jury. Hendricks v. Frank, 86 Ind. 278; Evans v. Nealis, 87 Ind. 262. But, under our code, we-have only one form of action and one tribunal, and while-there may be issues in the same action of an equitable and. legal nature, there is only one court for their trial, and hence-they may be embraced in one action.- We have, under this-principle, held that a plaintiff may have an attachment and may also foreclose a mortgage. Martin v. Holland, 87 Ind. 105. Upon a like principle, it must be held that an attachment may issue in an action brought to set aside a fraudulent, conveyance and subject to sale property fraudulently conveyed. It is, indeed, impossible to conceive how it could be otherwise, since there is but one court, and parties- are required, wherever practicable, to settle the entire controversy in one action. We have many cases recognizing and enforcing this principle, among them Field v. Holzman, supra, Frank
Counsel cite Griffin v. Nitcher, 57 Maine, 270, Tennent v. Battey, 18 Kan. 324, Weil v. Lankins, 3 Neb. 384, Bigelow v. Andress, 31 Ill. 322, Martin v. Michael, 23 Mo. 50, McMinn v. Whelan, 27 Cal. 300, Wiggins v. Armstrong, 2 Johns. Ch. 144, Dunlevy v. Tallmadge, 32 N. Y. 457, Jones v. Green, 1 Wall. 330, and Harrell v. Whitman, 19 Ala. 135, and we have examined them but find them not in point. They declare the general rule, which prevailed under the old system, that only judgment creditors can maintain a suit to set aside a fraudulent conveyance, and as our law is different, the cases cited are not applicable. But even under the old system the rule was a general one to 'which there were, as we have seen, notable exceptions. It is clear that there must be exceptions, for no rule can be sound which requires a creditor to obtain a judgment in personam where there can be no jurisdiction of the person, since that would be to require him to do an impossible thing. If a personal judgment can not be obtained, then the creditor must be permitted to resort to the only remedy open to him, a proceeding against the property. The case before us comes within another exception to the general rule, for it is a proceeding in aid of a legal writ and essential to secure a complete adjustment of the rights of the
Our statute and our decisions have long established the rule that property fraudulently conveyed may be levied on, and if this be true, as unquestionably it is, then it is subject to attachment. Hankins v. Ingols, 4 Blackf. 35; Herman Ex. 147, section 17.
Fraudulent transfers are void as to creditors when properly assailed, and if void, of course the thing transferred may be seized as the property of the assignor. Sanders v. Muegge, 91 Ind. 214. As said in the case cited: “But when the creditor elects in any manner provided by law to avoid the fraudulent conveyance, then such conveyance, as to him, is the same as though it had never had an existence.” The text-writers affirm that property fraudulently transferred may be. attached. One of them says: “ The simulated sale of land or other property, though accompanied by delivery, would not prevent its lawful attachment as the property of the fraudulent grantor.” Waples Attachment, 154. Another author says: “A transfer made to hinder, delay, or defraud creditors, as to such creditors, passes no title whatever; the property covered thereby may be attached in the hands of the transferee for the debts of assignor, and afterwards sold under execution.” Kneeland Attachment, section 334. As the property is subject to attachment, the writ becomes a lien and equity may interpose to remove impediments and make the lien perfect. This is the ruling of the best reasoned cases, where the defendants arelion-residents, even under the old system, and certainly must be the rule under our system. Hunt v. Field, 1 Stockton N. J. 36; Sheafe v. Sheafe, 40 N. H. 516; Ward v. McKenzie, 33 Texas, 297; Pendleton v. Perkins, 49 Mo. 565; Scott v.
If the question were an open one, we should not be inclined to yield to the New York decisions so earnestly pressed upon us by counsel, for we regard them as unsound in principle and unsupported by well grounded authority; and we, moreover, find that the decisions in that State are in hopeless conflict. The right of a creditor to invoke assistance in a case like the present was held in one of the cases to be perfectly clear, the judge who delivered the opinion saying: “Since the decision in Rinchey v. Stryker, I consider it no longer an open question, whether, when an attachment is issued under the code of procedure, the plaintiff in the action obtains such a lien on the property attached as will entitle him to the intervention of the equitable jurisdiction of the court to remove or set aside all fraudulent claims and transfers, or any other fraudulent obstacles, in the way of the realization of the lien, in case the plaintiff should recover a judgment.” Greenleaf v. Mumford, 30 How. Pr. 30. The decision of the court is supported by the decisions of that State, and the remarks quoted are abundantly justified, although since that time a departure has apparently been taken. Rinchey v. Stryker, 28 N. Y. 45; Kelly v. Lane, 42 Barb. 594; Thurber v. Blanck, 50 N. Y. 80, see p. 86.
The rule which prevails with us gives a direct road to the •end of the controversy, enables a citizen to proceed against the property of a non-resident debtor, while any other pro
We need only say of the other questions presented by the appellant, that they arise upon an erroneous view of the record.
Judgment affirmed.