Court Opinion

ID: 6613758
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:19:55.736453+00
Date Added: 2024-06-11T15:58:27.141303
License: Public Domain

Separate opinion of
Lewis, P. J.
I concur in affirming the judgment, but cannot adopt all the reasoning in the leading opinion delivered. It is not, in my view, essential to this conclusion that the decisions in Luthy v. Woods, 1 Mo. App. 167, and Beal v. McVicker be overruled. Those cases were different from this, in the special features whereby the results in all should be controlled.
In each of them the primary object of the proceeding was to reach a fund in the hands of a third party, to which there was no access possible by any proceeding at law. The Board of Public Schools, in the one case, and the City of St. Louis in the other, was unapproachable by garnishment, which was the only legal method for subjecting the debtor’s chose in action to the claim of his creditor. A judgment against the debtor would have been useless, not merely because he was insolvent, but because as to that fund an execution on the judgment would have accomplished nothing. This brought those cases within the applications of Russell v. Clark, 7 Cranch, 89, O’Brien v. Coulter, 2 Blackf. 421, and Miller v. Davidson, 3 Gilm. 523. The superadded insolvency of the debtor, showing that there was no other recourse possible for the creditor, gave additional point to the demand for equitable relief. Whatever prominence may have been given to that insolvency in either case, the fact *129that the municipal corporation could not be garnished was held essential to the conclusions reached.
In the present case the effort is made to reach two certain interests which, it is alleged, are hidden behind the legal title held by the debtor’s wife to the real estate described in the petition. One of these interests accrues from the fact that the debtor’s money was expended in the valuable' •erections and improvements thereon. The other interest is one which the creditors themselves claim, by reason of the fact that their money was, through the debtor’s fraud, also invested in the same erections and improvements.
As to the first, I perceive no reason why, if it can be reached at all, it cannot be reached by execution or attachment. If the debtor has, by reason of his expenditures on the property, a claim which equity might enforce against the wife holding the legal title, then he has an equitable interest which could be levied upon and sold. If, because the expenditures were voluntary, or for other reasons found sufficient, he has no such claim, then equity cannot create one for his creditors in this or any other proceeding. In either event, the wife’s collusion with her husband, if provable for any purpose, would be as available in behalf of a purchaser under the execution as it could be made for the creditors here.
The interest which the creditors claim in their own behalf has no proper part in this form of action. If it amounts to any thing, it is an interest in the real estate, wholly independent of the fact that the debtor owes them money. If they have assented to the investment, they have, so far, no claim remaining to be enforced against the debtor, and must stand or fall in a contest upon other ground, with the holder of the legal title. If they repudiate the investment, their claim subsists against the debtor for so much money improperly converted, and must be enforced as any other money demand might be.
I am, therefore, of opinion that no sufficient claim for *130equitable relief is shown in this ease, and that the plaintiffs should seek their remedy against the debtor in an ordinary judgment at law. If the facts stated in their petition be true, such a judgment would either not be unavailing, or would not be any more so than would the case they might make out in this proceeding.
Separate opinion by
Baeewell, J.
I do not consider this case as overruling the case of Luthy v. Woods, recently decided by this court. I concur in the conclusion arrived at by the court in the case at bar, but do not assent to so much of the reasoning as may be in conflict with what is said in the last-named case.
In Luthy v. Woods the petition had three counts, — one on an account, and two on a note ; all these causes of'' action were against Woods & Barnes ; the petition then alleged the insolvency of Woods & Barnes, and that process against them would be unavailing; that the defendant, the Public Schools, is a corporation not subject to garnishment, and is indebted to Woods & Barnes; and asked for judgment against them, and for a decree that the Public Schools pay plaintiff’s claim out of the money due by them to Woods & Barnes.
There was an answer of Woods & Barnes denying the indebtedness, and the Public Schools demurred to the petition. The Circuit Court sustained the demurrer, on the ground that plaintiff had not established his claim against Woods & Barnes in a court of law. It could have sustained the demurrer on no other ground, for it was already settled in this State that a municipal corporation not liable to garnishment could be reached by bill in equity.
In that case the court deliberately took a step forward which it is now asked to retract. It had been already held that, where judgment was obtained, a court of equity would entertain jurisdiction to reach assets not to be subjected to process at law without requiring execution and a return of *131nulla bona to be shown where the defendant is insolvent; but we were asked to say, further, that where the creditor is insolvent a court of equity will not, in every case, require that the claim shall have been established in a court of law; but in a proper case, and to prevent circuity of action, will give relief where a judgment had not been obtained, even though the debtor has not absconded, and where a judgment can be obtained against him, provided it is shown that there are no assets which execution issued on that judgment can reach.
It was believed that there had been for years a steady tendency to such a result, and it was said that such a- step, though a decided and marked advance, was but following to its strict logical consequences the case of Pendleton v. Perkins, 49 Mo. 565.
It was conceded that no adjudged case could be found in which it had been decided, as the very point in the case, that a court of equity would entertain a creditor’s bill where the demand eould be first established in a court of law against a living debtor and this had not been done. In all the cases the debtor was dead, or was beyond the reach of process.
But it had been said by Chief Justice Marshall, in Russell v. Clark, 7 Cranch, 89, that “ if a claim is to be satisfied out of a fund which is accessible only by the aid of a court of chancery, application may be made in the first instance to that court, which will not require that the claim should be first established in a court of law.”
In O’Brien v. Coulter, 2 Blackf. 421, it was held that, to the general rule that to reach the equitable interest of a debtor the creditor must first get his judgment at law, there are two exceptions: first, where the debtor is deceased; seeond, where the claim is to be satisfied out of a fund accessible only by the aid of a court of chancery.
And in Miller v. Davidson, 3 Gilm. 523, it is said, following Chief Justice Marshall: ‘ ‘ There are some peculiar cases, however, where a party seeks satisfaction of his debt *132directly, in wbicb he may come into a court of chancery in the first instance, without first obtaining a judgment. Thus, if a claim is to be satisfied out of a fund accessible only by the aid of a court of chancery, application may be made in the first instance to that court, which will not require that the claim should first be established in a court of law. Although the jurisdiction of the court might, in this case, perhaps, be sustained on that principle, yet it may be placed upon higher and more unquestioned grounds,” etc.
Though this doctrine has been accepted by this court as true in Luthy v. Woods, it has not been said to be of universal application. To justify a court of equity in granting relief in cases of this sort, the relief should be, as it was in that case, aud in the subsequent case of Beal v. Mc Vicker, of such a nature as a court of equity may properly grant. If, therefore, the proper relief be by an award of damages, which can alone be determined by a jury, there may be a strong reason for declining the exercise of the jurisdiction; and so in many other cases where a question arises purely of matter of fact, fit to be tried by a jury, and the relief depends on that question as a main question in the case, jurisdiction for relief should be declined; or, if retained, issues should be directed to a jury. Story’s Eq. Jur., sec. 72. This distinction furnishes a clear line,'— a line as clear, at least, as is furnished where equity, departing from matters of fraud, accident, mistake, and account as foundations of its jurisdiction, entertains, as it constantly does, bills of relief on the ground of discovery. In those cases where the remedy at law is considered more appropriate, equity sometimes declines the jurisdiction, and sometimes assumes and retains it, subject to a trial at law. Story’s Eq. Jur., sec. 73.
That the distinction between the remedies must be kept up is indisputable. In an action at law there is a constitutional right to a trial by jury, which has no existence in equity; and the defendant may stand upon and insist upon *133that right, and is not to be deprived of it merely because he is insolvent. But, in the cases heretofore presented to the court, the question of indebtedness was admitted. When this is so, I think it contrary to the spirit of our system of jurisprudence and to the course of modern decisions, especially in this State, to compel the suitor to establish his claim at law before he comes to equity for relief. Where this is a mere barren ceremony, it should never be insisted upon. Each case must stand on its own peculiar facts ; but I think that a court of equity will not refuse to entertain jurisdiction in cases of this sort merely because the claim is not in judgment.