Court Opinion

ID: 6625949
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:34:30.341396+00
Date Added: 2024-06-11T15:58:50.512174
License: Public Domain

GOODE, J.
(after stating the facts). — Appellant appears in the petition as a creditor at large of defendant LaMothe without either a judgment against said defendant or a lien on his property. Cases are in the books, mostly in the Pennsylvania Reports, wherein actions by such creditors against parties alleged to have assisted debtors in shuffling their property to defeat executions, were sustained. [Mott v. Danforth, 6 Watts 304; Penrod v. Mitchell, 8 Sarg. & Rawl. 522; Kelsey v. Murphy, 26 Pa. St. 78; Merchants’, etc., Bank v. Tinker, 158 Pa. St. 17; Meredith v. Benning, 1 Hen. & Munf. (Va.) *585.] In these cases usually a conspiracy is alleged between the debtors and the parties who assisted him in the fraudulent scheme, but the gist of the cause of action is the damage tb the creditors by the fraudulent transfer or concealment of the property, and not the conspiracy. [1 Cooley, Torts (3 Ed.), 210.] The current of decision runs against allowing the remedy to creditors at large, or perhaps to any creditor save one who holds a judgment lien or other lien on the property fraudulently disposed of by conveyance, removal or otherwise. [Adler v. Fenton, 24 How. 407; Findlay v. McAllister, 113 U. S. 104; Field v. Siegal, 99 Wis. 605; annotated 47 L. R. A. 433; Lamb v. Stone, 11 Pick. 527; Gardner v. Sherrod, 9 N. C. 173, and many other cases cited in said note to Field v. Siegal; 6 Ency. Law (2 Ed.), 878, 8 Cyc. 648.] It is certain judicial authority preponderates in favor of withholding the remedy where there is neither a judgment establishing the demand, nor a lien on the debtor’s prop*650erty. In most of the opinions denying the remedy where there is no judgment or subsisting lien in favor of the creditor, the courts have proceeded on the theory that the conspiracy and fraudulent acts done to make it effectual are so remotely related to the damages alleged to have followed as to render it unsafe for the law to accept such conduct as a basis of recovery. [Bump, Fraudulent Conveyances (4 Ed.), sec. 528; Tasker v. Moss, 82 Ind. 63; Lamb v. Stone, supra.] This reasoning is vague, but understood in connection with the facts of the cases where it has been adopted, it seems to mean the courts think damages might be recovered though, in the nature of things, it is impossible to prove with requisite certainty the creditor would have been able to collect his alleged demand from the property fraudulently disposed of if there had been no such disposition of it, or that he was prevented by the fraud from reaching the property of the debtor sufficient to satisfy his claim. . Another argument is the one adverted to in Lamb v. Stone, based on the practical inconvenience of the remedy and the chance of its working injustice to other creditors of the debtor than the one who files the first action. It is said the creditor who first proceeds against the parties supposed to have assisted the debtor in a scheme to defraud his creditors would have done nothing to entitle him to priority, if, perchance, the property conveyed was not more than enough to satisfy his demand, and yet there would be no method of apportioning its value among other creditors. We appreciate more the inconvenience of trying in such an action the validity of the creditor’s demand against the debtor, a question in which the parties alleged to have conspired with the latter would have only a contingent interest, and trying, too, the question of a fraudulent transfer in which all the defendants would be directly interested. Closely scrutinized the petitions in this case and others like it contain two distinct causes of *651action, the first of which is against only part of the defendants and the second against them all; a form of pleading forbidden by the code, bnt sometimes allowed in snits in equity. [R. S. 1899, section 593, and cases cited, p. 621, 1 Mo. Ann. Stat]
So much for the case attempted to be stated upon general principles. Even if a creditor at large was entitled to the action, facts are not well pleaded in the present petition to state a case. To organize the War-dell Land & Lumber Company was, of course, a perfectly legal act, as was also the rescission by the individual defendants, LaMothe, Murphy and Schwerd, of the contract by which the former had sold to the two latter his timber and mill. The tortious act, if any there was, consisted in the subsequent conveyance of the property to the Land & Lumber Company for the purpose of preventing plaintiff from collecting the debt LaMothe owed her. After the rescission of the contract of sale, the title to the timber and mill stood in LaMothe alone, and he had full power to convey them to the company without the consent or assistance of Murphy or Schwerd. Hence we do not perceive how the averment that defendants caused all the right, title and interest of LaMothe in the timber and mill to be transferred to the company could be true, or hów Schwerd and Murphy could have aided in the transfer so as to constitute them participants in the fraud of LaMothe, if a fraud was intended by him. What they could do to effect the transfer to the company that LaMothe was unable to do without their assistance is neither shown by averments, nor obvious in itself.
Counsel for appellant cites us to the statute which says every person, who, being a party to the sale and delivery of any goods or chattels, or to any conveyance or assignment of any estate or interest in real estate, goods, chattels, etc., made or created with intent to defraud prior or subsequent purchasers, or to hinder, *652delay or defraud creditors or other persons, and every person privy to or knowing of such conveyance, assignment or charge, who shall willingly put the same in use, as having been made in good faith, shall, upon conviction he adjudged guilty of a misdemeanor. [R. S. 1899, sec. 1931.] It is argued a civil action for damages will lie for a violation of that section; hut the averments of the petition do not suffice to state a case on the section if we grant one will lie. It is not alleged, expressly or by necessary implication, any of the defendants put in use the transfer by LaMothe to the company as having been made in good faith. From neither statutory nor common law point of view is a cause of action stated against all the defendants, and plaintiff asks no judgment against LaMothe for the debt he is said to owe.
The judgment is affirmed.
All concur.