Court Opinion

ID: 7275560
Source: CourtListenerOpinion
Date Created: 2022-07-25 19:59:00.106766+00
Date Added: 2024-06-11T16:18:50.591903
License: Public Domain

Mr. Justice Shepard
delivered the opinion of the Court:
There was no error in sustaining the demurrer, because the allegations of the bill do not make a case that is cognizable in equity. It is a settled principle of equity jurisprudence that courts thereof have no jurisdiction to grant relief where plain and adequate remedy can be had at law. This rule is necessarily most closely adhered to in all of the United States courts. It is declared in the Judiciary Act, in strict accord with those provisions of the Constitution which establish the distinction between law and equity, ,-and preserve the right of trial by jury in all cases at law where the value in controversy shall exceed twenty dollars. This right is not compensated by sending issues out of chancery to be tried by jury, and is therefore to be carefully guarded from the 'encroachments of courts of equity.
For aught that appears in this bill, defendant Horton may have property subject to execution in the State of New York, where he resides, more than sufficient to satisfy complainant’s demand. The complainant, who resides in Maryland, could as easily have resorted to the courts of the place of defendant’s residence, where he may have property subject to execution, as to the courts of this District, where defendant once had property which, it is alleged, has been conveyed by him without consideration and to defraud his creditors.
If the defendant should have property remaining and subject to execution where he resides, it ought not to be *86unlawful for him to make voluntary conveyances of his property situated here, in so far, at least, as the rights of nonresident creditors are concerned. If the debt be contracted in the ordinary course of business in this District, by one who has since removed, or if it be due to a resident thereof, then an exception to this rule might be made in its favor. But this question is not before us, and we are not to be understood as even intimating an opinion upon it. It is enough that this bill shows upon its face that the complainant is a resident of Maryland, and does not show that the debt was contracted in the District of Columbia, .or that defendant Horton ever even resided therein.
Again, no reason appears why, if the allegations of the bill be true, complainant could not have commenced his action at law, and sued out a writ of attachment against the nonresident defendant. Counsel undertakes to explain the failure to pursue this course on the ground that defendant Horton has only an equitable interest remaining in the lands conveyed, and this is beyond the reach of legal process under the law prevailing in this District. This reasoning is not satisfactory. The conveyance by Horton to his wife passed a complete title to her, as against him, whether made in good faith or in bad. If made' for the purpose of defrauding creditors, neither Mrs. Horton nor Duvall cai be held as trustees for their benefit, because as to them the conveyance is void.
Another question raised by the demurrer and much discussed is this: Can the complainant maintain his bill to set aside the fraudulent conveyance, without first having reduced his debt to judgment?
The doctrine of the Supreme Court upon this point is stated in Scott v. Neely, 140 U. S., 106, by Mr. Justice Field, as follows:
“ In all cases where a court of equity interferes to aid the enforcement of a remedy at law, there must be an acknowledged debt, or one established by a judgment rendered, accompanied by a right to the appropriation of the property *87of the debtor for its payment; or, to speak with greater accuracy, there must be in addition to such acknowledged debt an interest in the property, or a lien thereon created by contract,. or by some distinct legal proceedings.” See, also, Smith v. R. R. Co., 99 U. S., 398; Nat. Tube Works Co. v. Ballou, 146 U. S., 517.
In this last case, it was said: “ When it is sought by equitable process to reach the equitable interests of the debtor, the bill, unless otherwise provided by statute, must set forth a judgment in the jurisdiction where the suit in equity is brought, the issuing of an execution thereon, and its return unsatisfied, or must make allegations showing that it is impossible to obtain such a judgment in any court within such jurisdiction.”
Appellant contends that he has brought himself within the exception above stated by the averment of his bill, “that defendant has no property in the District of Columbia which can be reached by any known legal process.” We cannot assent to this. But, even if his view of the scope of the exception in general were sound, it could not apply to this case, because,' as we have before said, he must, at least, have shown by averment of the bill, that defendant Horton had no property that could be reached by legal process in the State where he resides.
We will not say that there is no possible case in which this exception, as claimed, may. not be made to apply, but wherever it has been held by the Supreme Court that judgment at law and fruitless execution thereon are not indispensable prerequisites to the right to resort to equity for relief, it will be found that complainant had some interest in, or equitable lien upon, the fund or property sought to be subjected to his demand, as was the case in Case v. Beauregard, 101 U. S., 688, another of the authorities relied on by appellant.
The question seems to be definitely settled by the case of Cates v. Allen, 149 U. S., 451. In that case a bill was filed by simple contract creditors to set aside a fraudulent convey*88anee made by their debtors to an assignee for the benefit of creditors. The remedy was pursued under a statute of the State of Mississippi, conferring jurisdiction in such cases upon courts of equity, in the first instance. The majority of the court reaffirmed the doctrine of Scott v. Neely, supra, to the effect that even an express statute of the State could not confer equity jurisdiction in such a case upon the courts of the United States, because “in conflict with the constitutional provision by which the right to a trial by jury is secured.” The Chief Justice, speaking for the majority of the court, said:
“The principle that a general creditor cannot assail as fraudulent against creditors an assignment or transfer of property made by his debtor until the creditor has first established his debt by the judgment of a court of competent jurisdiction and has either acquired a lien upon the property, or is in a situation to perfect a lien thereon, and subject it to the payment of his judgment, upon the removal of the obstacle presented by the fraudulent assignment or transfer, is elementary. Wait on Fraud. Conv., Sec. 73 and cases cited. The existence of judgment or of judgment and execution is necessary, first, as adjudicating and establishing the legal demand; and, second, as exhausting the legal remedy.” The dissenting minority conceded the soundness of this principle, but held that the jurisdiction in that particular case was maintainable under the statute.

TJte decree dismissing the bill must be affirmed, with costs to the appellees ; and it is so ordered.