Court Opinion

ID: 6503665
Source: CourtListenerOpinion
Date Created: 2022-07-19 18:16:06.979726+00
Date Added: 2024-06-11T15:54:40.654394
License: Public Domain

DARGAN, J.
The first question to be examined is, whether a court of equity has jurisdiction under the facts alledged in the bill, to grant the relief sought by it ?
The jurisdiction is attempted to be maintained, first, upon the ground that Thomas, one of the debtors, has removed from the State of Alabama, and now resides in the State of Georgia, and is insolvent. It is true, that if a party is not within the jurisdiction of .the eourt, a court of equity will sometimes proceed against those who are, and afford relief, if it can be done consistently with the merits of the case, and the rights of the absent parties. See Story Equity Pl. 80; 2 Mason’s Rep. 96; 7 Cranch, 69; 3 Ib. 220; 2 Atkins’ Rep. 510.
But it is a well established rule, that if the parties absent from the jurisdiction of the court, are to be active in the performance of the decree, and are not mere passive objects of it, then a court of equity cannot proceed without having them before the court as parties, and if this cannot be done, no decree can be rendered. See Mit. Pl. 30, No. N.; Story’s Eq. PI. 81; 2 Swanston’s Rep. 278. These rules are applicable when the subject matter of the bill is purely of equitable cognizance; hence defects in the powers of a court of equity existed, for it was in many cases incapable of af*845fording relief, because the proper defendant was not within the jurisdiction of the court, although the rights of the complainant might be exclusively of an equitable character. This defect has been remedied by statute in this State, and indeed in all the States of the Union — and in granting relief against an absent defendant, who cannot be served with process, courts of equity derive their authority from statutes. And it is beyond doubt true, that the mere absence of the party from the jurisdiction of a court of equity, and upon whom no service can be effected, cannot convert a pure legal demand into an equitable one, or give a court of equity jurisdiction over a legal demand, unless such jurisdiction is conferred by statute. For it would be absurd to say, that if the demand be of equitable cognizance, no relief can be afforded, because the defendant is beyond the jurisdiction of the court, and cannot be served with process, but if the demand be purely legal, and the defendant is beyond the jurisdiction of the courts of the country, this gives a court of equity authority to grant relief. Hence we will inquire if the demand of the complainants is legal, or equitable, and in what cases our statutes authorized courts of equity to proceed and grant relief against absent parties, in those cases-where the subject matter is purely of equitable cognizance.. See the Heirs of Holman v. The Bank of Norfolk, 12 Ala. Rep. 428.
The complainants are simple contract creditors, and they* do not seek to enforce the trust created by the deed of assignment to Bradford, but to set it aside for fraud, and to subject the effects to the payment of their debts. As they are simple contract creditors, before they can come into a court of equity to collect their debts, or remove obstacles interposed to their collecting them, they must show either a lien, or that they had obtained judgments at law, the collection of which they cannot enforce without the aid of this court. See 1 Paige, 305; 4 Johns. Ch. Rep. 296; 3 Leigh’s Rep. 299.
It is true, that in Kentucky, the absence of a party from the State, is held to be a ground upon which a court of equity will take jurisdiction of, and enfore the collection of a sim*846pie contract debt, against property liable at law to satisfy it, but this jurisdiction is claimed by statute only. See 5 Litt. 49; 9 Dana, 93. And previous to the act of February, 1846, there was no statute in Alabama that authorized a court of equity to take cognizance of a mere legal demand, and enforce the collection of it against property liable to execution at law, on the ground of the absence, or non-residence of the defendant. And in this bill is not filed under this act, nor in pursuance of its provisions, it can derive no aid from it.
The demand being a simple contract debt, and purely of a legal character, before the complainants can come into this court for its collection, they must establish a trust in their favor, upon the effects they seek to subject to its payment, and if they fail to do this, their bill is without equity.
It is contended, that the insolvency of the partners, and the transfer by Hunter to Thomas, creates a trust on the partnership effects, to pay the partnership debts; and as the complainants’ debts are of that character, they are seeking to enforce a lien for their payment.
The partnership creditors, as such, have no lien on the partnership effects, for the payment of their debts ; and they stand in respect to partnership property, as individual creditors do to the property of individual debtors, without having any lien thereon, until their debt is reduced to judgment, which will create a lien on real estate, and when execution is issued thereon, a lien is created on the personalty. See Sto. on Part. 509, 510. But as the partners themselves have a lien on the partnership effects, to pay the partnership debts, .this lien may, in many cases, be made available in favor of the creditors. But the equity, or lien of the creditors, is to "be worked out through the partners themselves; and when they can by this lien reach the partnership effects, and subject them to the satisfaction of their debts, it is because they are considered as subrogated to the rights and equities of the partners themselves, and not as having any lien, or equity upon the joint effects, by virtue of their debts merely, independent of this equity of the partners.
*847Having, then, no lien by virtue of their debts merely, the partners may sell, and dispose of the effects of the firm as' they please, or as individual debtors may, for a fair and bona fide consideration, and their sales cannot be set aside by the creditors. One partner may sell to his co-partner, and if the sale is fair, it will vest the exclusive title in his co-partner. See Story on Part. 510; Ex parte Ruffin, 6 Vesey, 119, 126; 11 Yesey, 3, 5, 8. If the consideration of the transfer be, that the partner buying, shall pay the debts, this will not, by force of the contract, raise a trust in favor of the creditors, because they (the creditors) derive their lien from, or through the partners; and if the retiring partner parts with his lien, by the terms of the contract, and takes the personal security of the other to pay the debts, it would be difficult to maintain the proposition, that a creditor could assert a lien through the retiring partner, by virtue of an act that extinguished the lien of the partner himself. See Story on Part. 510; Clow on Part. 238 to 241.
By the terms of the deed from Hunter to Thomas, all the interest, right and title of Hunter, passed to Thomas, and no lien was reserved by the terms of the contract in favor of Hunter. But he relied on the personal security of Thomas alone, for the payment of the debts. If this deed is valid, or bona fide, it cuts off the equity of Hunter, and of course the creditors could not assert a lien through Hunter in their favor, if Hunter had none.
The answer of the defendants denies all fraud, as well in the execution of the deed to Thomas, as in the deed to Bradford ; and there is no evidence to show, that the deed of the 12th of December, executed by Hunter to Thomas, was without consideration, or fraudulent. Hence, the complainants have failed to show a lien in their favor, and their debts being simple contract debts, not reduced to judgment, they cannot come into this court to ask for their payment. Their remedy is at law, and to that forum they must be remitted.
*848This conclusion renders >it unnecessary to examine the questions raised on the deed of assignment do Bradford. Let the decree be affirmed.
Chilton, J._, .not sitting.