Court Opinion

ID: 6604744
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:11:10.576146+00
Date Added: 2024-06-11T15:58:08.174826
License: Public Domain

LyoN, T.
Actions to enforce contribution between sureties, and to subrogate a surety who has paid the debt of the principal debtor to the securities and rights of the creditor, are constantly sustained by courts of equity, and have been from the earliest times. In so far as this action seeks to compel the defendant Lallier to reimburse the plaintiffs such sum as, between the sureties, he equitably ought to pay upon the judgment, it was properly brought as an equitable action, although courts of law have a very extensive concurrent .jurisdiction over the same subject. The right of the plaintiffs to be subrogated to the remedies of the judgment creditor is, also, clearly a matter cognizable by a court of equity.
The extent to which subrogation may be decreed has been a matter of some conflict between the courts of this country and' of England. It was formerly held in England, following the Roman law, that a surety subrogated to the rights of a creditor had precisely the same, rights the creditor had, and stood in his place; but in later times the rule has been restricted in that country, and it is there now held that the right of subrogation extends only to securities other than the obligation or instrument which is the evidence of the debt. Thus, if the debt be evidenced by a bond, payment by one of two sureties of the whole debt cancels the bond, *245or if it be upon a judgment, such payment cancels the judgment, and the surety so paying becomes a mere general creditor of his co-surety, to whose demand none of the peculiar incidents of a debt upon specialty or judgment adheres.
The courts of this country, however, have very generally adhered to the ancient rule, and hold that although the lien or obligation be extinguished at law by the payment of the debt, yet, for the benefit of the surety, it continues in equity in full force. This is believed to be the more just and reasonable rule. The cases which illustrate the above propositions are very numerous in both countries. A great many of them will be found cited in Story’s Equity Jurisprudence, in the notes to sections 492, 493, 495, 496, 499, a, b, o; 3 Pom. Eq. Jur. §§ 1418, 1419, and notes.
The American rule is fully recognized in our statute, which prescribes the procediire by which one of several judgment debtors, who has paid more than his just share of the judgment, may keep the judgment alive, and retain the lien thereof upon the lands of the other judgment debtors, for the purpose of enforcing contribution by the latter. R. S. secs. 3021-3024.
"We are of the opinion, therefore, that the complaint states an equitable cause of action against the defendant Lallier. It remains to be determined, however, whether the complaint states such a cause of action against the defendant Pierron. The judgment obtained by the city in the original suit did not go against Pierron; hence it never became a lien upon his real property. The deed by which Lallier reconveyed to him the property which the plaintiffs seek to reach in his hands was.executed and recorded before the judgment was docketed in Eond du Lac county. There is no averment in the complaint that Lallier is insolvent, or that the demand of the plaintiffs against him could not be *246collected on. execution without resorting to this property, or that any execution has been returned unsatisfied. The question is, therefore, Can the plaintiffs maintain an action against Pierron to cancel his conveyance from Lallier, and subject the land to the claim of the plaintiffs, until they exhaust all legal remedies to collect it of - Lallier? or, at least, until they show that he is insolvent?
In Hyde v. Chapman, 33 Wis. 391, the plaintiff was a judgment creditor, of B. A. Chapman. Before the judgment was obtained, the latter had made a voluntary conveyance of certain real estate to James A. Chapman. An execution had been issued upon the judgment, but before the return thereof the plaintiff commenced his action against both the Chapmans to have such conveyance set aside as fraudulent, and to subject the land to the hen of the judgment. On these facts the present chief justice, delivering the opinion of the court, says: “ Under these circumstances it is difficult to say that the plaintiff ever acquired any lien upon the property. And if he did not, the law seems to be well settled that this right to relief depends upon the fact of his having exhausted his legal remedies without being able to obtain satisfaction of his judgment. The issuing of an execution, and its return unsatisfied, was essential to his right to maintain this action. Beck v. Burdett, 1 Paige, 305; Gates v. Boomer, 17 Wis. 455; Cornell v. Radway, 22 Wis. 260.”
In Cornell v. Radway, cited by the chief justice, the judgment had become a legal lien upon the property described in the fraudulent conveyance before such conveyance was executed, and it was held that in such a case an action might be maintained to cancel such conveyance without the return of an execution unsatisfied. The case is entirely consistent with that of Hyde v. Chapman. Gates v. Boomer, 17 Wis. 455, is like the present case,— the fraudulent con*247veyance antedating the judgment. But there an execution ■was returned unsatisfied before the equitable action to avoid the fraudulent deed was commenced.
The only case determined by this court, cited as sustaining the opposite doctrine, is that of Blake v. Van Tilborg, 21 Wis. 672. In that case the plaintiff intrusted the defendant with his money, with which the defendant fraudulently purchased and paid for certain lands, and caused a portion of such lands to he conveyed to one of his co-defendants, and a portion to the other, neither of them paying any consideration therefor. The plaintiff sought in the action to obtain these lands in which his money had thus been invested. It was held that the complaint was not multifarious. The distinction between that action and the present one is obvious, and requirés no elucidation.
There are cases in this court, however, which apparently approach nearer sustaining the position of the learned counsel for the plaintiffs than does that of Blake v. Van Tilborg. One of these is Damon v. Damon, 28 Wis. 510, in which it was held that a wife suing for a divorce' from her husband, and for alimony or a division of her husband’s estate, might properly join a fraudulent grantee of the husband, of property purchased with the separate estate of the wife, as a defendant to the action. The judgment went upon the general ground that it was necessary to ascertain the extent of the husband’s estate before the court could intelligently fix an allowance for alimony, and that it was also necessary to clear the property of the fraudulent conveyance for the purposes of a division of the estate, and a vesting in the wife of the title to the portion thereof adjudged to her. The same rule was applied to a different state of facts, but involving the same principle, in Gibson v. Gibson, 46 Wis. 449. But in Varney v. Varney, 54 Wis. 422, the court refused to apply the rule because it was unnecessary for the protection of the plaintiff. In the latter case, Mr. Justice *248Taylob states the rule as applicable to judgment creditors to be that the alleged fraudulent conveyance can only be set aside when there is not enough property remaining in the hands of the judgment debtor to satisfy the judgment, and he says further that, “ as a general rule, equity will not interfere to aid the judgment creditor to set aside a conveyance as fraudulent until it is shown that the defendant has no other property with which to satisfy the same.”
Considering the special grounds upon which the judgments in the divorce cases were rested, it is obvious that there is no conflict between those cases and Hyde v. Chapman, but they all may well stand together.
Divested of all extraneous circumstances, this is a case in which the plaintiffs seek to obtain a judgment for a certain amount of money against the defendant Lallier, and to subject certain lands, to which the defendant Pierron obtained the legal title by conveyance from Lallier before the original judgment became a lien upon them, to the payment of the judgment to be obtained herein, or to the lien of the original judgment; and this without averring the insolvency of Lallier, or any necessity for resorting to such lands to satisfy any judgment that may be obtained against him. It seems very clear to us that the complaint, so far as Pierron is concerned, is fatally defective in that it thus fails to show a necessity for resorting to the lands conveyed by Lallier to Mm for the purpose of enforcing contribution against Lal-lier. It was said in the argument that the circuit court sustained the demurrer because of such omission.
This being an action in equity to determine the sum Lal-lier ought to pay his co-sureties, and to enforce payment thereof, it is unlike a creditors’ suit, which is usually brought to enforce a liability already ascertained in an action at law. Because of this difference in the two actions, we think the strict rule which prevails in creditors’ suits, applied in Hyde v. Chapman, should not prevail here, and hence that the *249return 5f an execution unsatisfied against Lallier is not essential to the maintenance of this action against Pierron. Had the insolvency of Lallier been alleged, the complaint would have been sufficient as to both defendants.
By the Gov/rt.— Order affirmed.