Year: 1861

ass, III New Hamp. $40, 326. Maino
53g, and has been followed bv the Chan.
cellor OF this State in the case OF WRIGHT
ct al. VS.. Petrie ct al. Smedes and Mar.
Ch. Rep. $40. This rule we consider to be
founded on the better reason.


The right Of the creditor 10 subject the
property Of his debtor to the payment Of
his debt, applies to whatever Is in law the
property OF the debtor, except such parts
OF II as are specially exempted by law,
and If this right be not available at law
by reason Of the nature or condition Of
the property, that is a sufficient reason
why il should be enforced by Court ol
Equity. II is upon this ground that !
Court Of Equity subjects equitable asset
- tha oaynaent Of debts, when the remedy
at law lus been exhausted and ID ineffec
tual. And it would, indeed, be strange
that Court Of Equity which is compe-
tent TO give relief against equitable assets
on the mere ground that they could not
be reached at law, should be incompetent
to give relief against assets fraudulently
transferred by the debtor, so as not 10 be-
within the reach of an execution at law.
considering that the fraud itself is one OF
the very grounds Of the jurisdiction OF
that Court.


The statute has generally received A
liberal construction for the suppression Of
fraudulent arrangements against the
rights of creditors, but to restrict its
operation to cases of fraudulent gifts or
conveyanoes of such property as might be
seized under execution, would be to des-
troy its beneficial effect, and to allow its
policy to be evaded II would rive tho
debtor the perfect power to dispose Of his
property so as to defeat the rights of
creditors, by conveying it for negotiable SO.
curlties, for the purpose of defrauding his
creditors, and then transferring the seouri.
ties and placing them beyond the reach
Of creditors. If the conveyance was
made to a party who purchased the pro-
perty in good faith and without notice of
the fraudulent intent, il might be inn
possible for the creditors to subject either
the property conveyed or the securities
given for it TO his debt, aud the statute
would be Intellectual against such fradu.
lent arrangement. This would open a
wide door for fraudulent conveyances,
and would Illustrate the manifest policy Of
the statute, unless tho plain rights Of
creditors, which it was tho object Of the
statute to protect, could be enforced in
such cases, in Equity. If such rule we're
sanctioned, it would produce the strange
result, TO deny to the creditor his right to
subject his debtors property to the pay
| ment of hissdebt by resort TO a Court
alone competent, and to deprive Court
of Equity OF one Of its clearest branches
of jurisdiction, TO give relief against fraud.


The rule under consideration appears
t9 PEossssSds sSs athaaFAe hSs s'fti thar
to declare it void and thereby remove the
, obstacle to an execution at law, and mas
much as after such decree, the execu
ton could not be levied of the chose in
action, therefore that the Court is incom.
petent to give relief.


But there appears TO be nothing in the
statute to justify this view. The mode of
proceeding to give to creditors the benefit
OF the debtors property fradulently con
veyed, appears not to be indicated, nor in
any wise restricted by the statute, and he
must, therefore, be left at liberty to resort
to that mode which the nature and cir.
cumstances of the fraudulent arrange
ment may render necessary to obtain his
rights. The spirit of the statute plainly
is, to enable the creditor to subject to the
payment Of his debt, the property of his
debtor fraudulently conveyed, whatever
may be its form, and il appears TO be an
utter subyersion of that object to allow
the fraudulent purpose TO be consumma-
ted by denying TO the creditor his sub
stantial right by reason of the form in
which the property is placed by tho
fraudulent contrivance. And yet such
would be the consequence, in many cases,
unless a Court of Equity had power TO
subject the chooses in action fraudulently
transferred to the payment Of debts.


But according TO the rule which wa
have held, and which is well supported
by authority this view s unsound, for
Court Of Equity has the power not only
TO set aside the fraudulent conveyance,
but to subject the property conveyed TO
the payment Of the debt, under it, own
jurisdiction Hunt VS.. Knox. ct. al "a
Miss. 6jj. And the principle is there
sanctioned, that every species Of property
belonging TO the debtor, may be reached
and applied to the satisfaction Of his
debts, and that the powers Of Court Of
b4ully aD p0Ii0ObiJ AuSiuato W carry
that principle into effect.


1t Is urged as an additional objection TO
the bill in this case, that complainants do
not show that they had ajudgment at law
or any thing equivalent TO it, at the time
Of filing the bill.


This appears to be an error Of fact as to
the statements Of the bill. ltalleges that
the claims of the complainants were
proved and allowed, that the estate was
reported and declared insolvent, and that
their claims were reported by the com
missoners Of insolvency as duly estab-
lished claims against the estate, all this was
before the filing Of the bill. These allega-
tons are equivalent in law TO Judgment
and return Of "Nulla Bona" at law, and
are sufficient basis for the filing Of the
bill.


We are Of opinion according to these
views that the Court erred in sustaining
the demurrer, and dismissing the bill,
and the decree must be reversed, the de
murrer oyerruled, and the cause remand
ed for answer within sixty days.