Court Opinion

ID: 3549387
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:02:38.598626+00
Date Added: 2024-06-11T14:22:37.325656
License: Public Domain

In the opinion of the majority of the court it is not considered necessary, in disposing of this case, to look into the evidence or proceedings of the court below, because the failure of the complaint to show that the court had jurisdiction over the person or property of *Page 392 
the defendant Steve Milisich is deemed fatal to this suit. As I dissent from this conclusion, I shall confine myself to the discussion of the point decided.
It appears affirmatively from the complaint that the plaintiff, prior to the bringing of this suit, had sued the defendant Steve Milisich on the law side of the court below to recover a money judgment upon his negotiable note for the sum of $7,800. It appears that, at the time of the issuance of the summons in the law action, an attachment was issued against the property of the defendant as security for the satisfaction of any judgment the plaintiff might recover. The record does not disclose upon which of the nine grounds allowable under the statute the attachment was issued, but I shall assume that it was issued upon the eighth ground, namely, "where a defendant has assigned, removed, disposed of, or is about to dispose of his property, or any part thereof, with the intent to defraud his creditors." Section 5147, Revised Laws. It is conceded that while the law action was pending this suit was filed against the defendant Steve Milisich, and his wife, Thora Milisich, was made a party defendant. She interposed a demurrer to the complaint, upon the grounds that the same did not state facts sufficient to constitute a cause of action against her, and that the complaint did not state facts sufficient to entitle the plaintiff to the relief sought by it. The demurrer concedes that the main purpose of this suit was to remove the fraudulent transfer by the husband to the wife of certain notes, referred to as the O'Sullivan notes, so that the same might be applied in satisfaction of the husband's debts, particularly his debt to plaintiff, which was sued upon in the attachment suit then pending and still undetermined. The ground for equitable relief, pleaded in the complaint, is the fraudulent transfer of the O'Sullivan notes with intent to hinder, delay and defraud the creditors of the assignor.
It is conceded that, at the time of the commencement of the law action and of this suit, the defendant Steve Milisich was not within the jurisdiction of the courts in *Page 393 
this state, and no personal service of summons could be made upon him. No service could be made by publication of the summons so as to procure a personal judgment against him, inasmuch as no attachment could be levied upon any property of his in this state after the making of the assignment to his wife of the O'Sullivan notes. The demurrer concedes, that, at the time of the commencement of the law action, Steve Milisich had departed from the jurisdiction of the courts of this state without leaving any property here except the O'Sullivan notes assigned to his wife; that he was insolvent; and that he resided at the time in the city of Juarez, Mexico. It thus appears, from the admitted facts, that the plaintiff could in no way secure a judgment in this state against Steve Milisich for the amount of his indebtedness, and that he was insolvent.
The assignment of the O'Sullivan notes with intent to defraud the creditors of the assignor is void by statute. Section 1083, Revised Laws. The complaint alleges, in substance, that Thora Milisich was concerned in the fraud and accepted the assignment with full knowledge thereof. She therefore became a trustee ex maleficio for the benefit of her husband's existing and subsequent creditors. 20 Cyc. 630.
While the authorities are in conflict, I am of opinion that the better reason supports the view that the resulting trust created by the statute (section 1083, Revised Laws) may be enforced in favor of the plaintiff, even though its claim had not been reduced to judgment, the debtor being a nonresident, and beyond the jurisdiction of the court, and having no property here which can be appropriated by proceedings at law to the satisfaction of the plaintiff's claim. Overmire v. Haworth,48 Minn. 372, 51 N.W. 121, 31 Am. St. Rep. 660. In addition to the authorities cited in Overmire v. Haworth, I cite the case of Patchen v. Rofkar, 19 App. Div. 475, 42 N.Y.S. 35; Id. 52 App. Div. 367,65 N.Y.S. 122.
I am not concerned with the prayer of the complaint, provided the same states facts which entitle the plaintiff to the equitable relief sought by it. My associates *Page 394 
seem to be of the opinion that while the complaint states an action for the equitable interposition of the court, the suit as an auxiliary proceeding to the plaintiff's action at law is not maintainable, for the reason that the law court had no jurisdiction over the person of Steve Milisich or his property, and therefore the court of equity was without jurisdiction to grant the relief sought. I am of opinion that, under the particular facts conceded by the demurrer, the ordinary course of legal proceedings in the action at law afforded the plaintiff no adequate or real means of redress. The defendant was a nonresident and had no property in this state out of which the plaintiff could enforce its claim, and plaintiff could not procure service of summons upon him so as to subject him to the jurisdiction of the courts of this state. The main question therefore for decision is: Is the plaintiff upon this state of facts entitled to invoke the aid of a court of equity?
Whether this suit is to be regarded as auxiliary to the plaintiff's action at law or as an independent action is immaterial. The case is one in which the plaintiff could recover upon its claim no judgment entitling it to have an execution issued and returned in the action at law. The support of this suit in any view of the complaint is dependent upon the inherent powers of the court of equity. No reason appears why these powers are not available to give a party, situated as plaintiff is, a standing in court.
The facts in the case of Patchen v. Rofkar, supra, are applicable to the facts of this case, as conceded by the demurrer. In the course of its opinion the court said:
"When a party has done all that is possible for him to do to prepare the way for his case to equitable cognizance, he is not to be denied access to the only tribunal capable of granting relief, merely because he had proceeded no further than he was, without any fault or laches on his part, permitted to go. That would be repugnant to the maxim that `there is no wrong without a remedy.'" *Page 395 
The very necessity for the interposition of a court of equity in this case was the impossibility of acquiring jurisdiction over the person of the defendant Steve Milisich in the action at law, and the impracticability, if not impossibility, of proceeding farther with that action. The plaintiff certainly had done all it was possible for it to do to prepare the way for its case to equitable cognizance, and I do not think that it should be denied access to the only tribunal capable of granting relief merely because it had proceeded no farther with its law action, for the obvious reason that it was impossible to secure a judgment therein for the amount of its indebtedness before commencing this suit.
The general rule that before a simple contract creditor can ask the intervention of a court of equity to set aside a fraudulent assignment he must reduce his claim to judgment against his debtor and procure an execution thereon to be issued and returned unsatisfied, is so thoroughly established as to be elementary, but the exceptions to the rule have become as well settled as the rule itself.
In Williams v. Adler-Goldman Commission Co., 227 F. 374, 142 C.C.A. 70, it is said:
"A prior judgment at law and unavailing process are not conditions on which equitable jurisdiction is founded. They do not constitute the basis on which the right to equitable relief rests. They are rather an element in procedure and not in equitable right. The facts which they are taken to establish, by the general rule, may be made to otherwise appear, and thus exceptions to the general rule are recognized and have become as well established as the rule itself."
Nonresidence of the debtor and also his insolvency have each been held sufficient to dispense with prior judgment and execution at law. There is abundant authority, both state and federal, for this proposition. See cases cited in Williams v. Adler-Goldman Commission Co., supra.
But, without pursuing this subject further, it may be said that when such a bill of complaint as this is *Page 396 
sustained without a judgment at law, it has been to enable the creditors to obtain a lien, either by judgment or execution. Anthony v. Jasper County, 101 U.S. 688, 25 L.Ed. 1004.
The most charitable view to be taken of the paragraph of the complaint quoted in the opinion of Justice DUCKER, in respect to the issuance of attachment, garnishment, and lien thereunder, is that the statements therein are incongruous and nullify its averments. I assume that the paragraph was inserted by way of anticipating the defense that the creditor must first establish his claim at law, before equity will take jurisdiction. Since the complaint states sufficient facts to dispense with prior judgment and execution at law, no unfavorable inference is to be drawn from the paragraph in respect to the issuance of an attachment and the acquirement of a lien thereunder.
I concede that a creditor must, if he can, first establish his claim at law, before equity will take jurisdiction of a cause to reach a fund which cannot be reached by process of law. But whether a court of equity will require the claim to be reduced to a judgment at law depends upon the peculiar circumstances of each case. Kent v. Curtis, 4 Mo. App. 121. I see no reason why the plaintiff in this instance should be required to do an impracticable, futile, and impossible thing as a necessary condition prerequisite to equitable interference.
The fact that an injunction is sought against the defendant Thora Milisich, as auxiliary to the plaintiff's action at law already begun and pending, is no bar to the present action, since the object desired cannot be obtained in the law action. High on Injunction (4th ed.), sec. 32.
The main object of chancery jurisdiction is to furnish a remedy when the strict rules of legal practice fail. This whole case, in my judgment, comes back to the fundamental inquiry: Had plaintiff a complete and adequate remedy at law? I think the absence of any legal remedy sufficiently appears by the complaint, and the plaintiff is entitled to the intervention of a court of *Page 397 
equity; otherwise, it must suffer a wrong without a remedy.
Entertaining these views, I dissent from the conclusion of the majority of the court, and feel that the case is one that should be reviewed upon its merits.