Court Opinion

ID: 7291861
Source: CourtListenerOpinion
Date Created: 2022-07-25 20:35:02.642243+00
Date Added: 2024-06-11T16:19:22.740832
License: Public Domain

Reed, V. C.
The bill is filed b}r a trustee in bankruptcy to compel the First National Bank of Hightstown to pay over to the complainant certain moneys received by the defendant from the bankrupt.
The demurrer seems to be rested upon the authority of a case decided by one of the appellate courts of Illinois — the case of McCormick v. Page, 3 N. B. N. Rep. 1009. In that case the *89demurrer was sustained upon the ground that the trustee had an adequate remedy at daw, and therefore it followed that tlie remedy by equitable proceeding was excluded. But in this state the jurisdiction of equity is not' excluded in all cases where there is an adequate remedy at law. There is a class of cases where the jurisdiction of the courts are concurrent, and this class includes suits in which the gravamen is fraud, actual or constructive. The remedy at law may be perfectly adequate and yet the jurisdiction of a court of equity to afford relief exists, although it is not always exercised. Ramshire v. Bolton, L. R. 8 Eq. Cas. 294; Anderson v. Eggers, 18 Dick. Ch. Rep. 264.
In matters -Involving a recovery of the property of insolvent debtors, equity has alwa3rs asserted its authority. Nor does it matter whether the property of a debtor has gone into the hands, of a party in a transaction between the debtor and the defendant in which there existed actual fraud, or whether the transaction was constructively fraudulent. A voluntary deed made by an insolvent to a person entirely innocent of any knowledge of the grantee’s condition, will be set aside in equity at the suit of an antecedent creditor.
The transaction set out in.the bill is constructively fraudulent or unlawful, by force of the provisions of the federal Bankruptcy act. Because the property was received by the bank in the shape of mone3r, and therefore the decree asked for is that the bank pay the money to the trustee, the cause presents an aspect which at once suggested the adequacy of an action at law, and therefore suggested the exclusion of any equitable remedy. But the money held by the bank stands in exactly the same posture as any other property which the bank might have received, and the decree asked for only requires the bank to turn over to the trustee the property which it has received.
Besides, the property sought to be recovered is in its nature trust property, held by the bank for the benefit of the creditors of the bankrupt. The trustee has the right to follow it in a court of equity.
1 think there should be a decree for the complainant.