McKibben v. Barton , 1 Mich. 213 ( 1849 )

By the court,

Miles, J.

There is undoubtedly a class of cases in which the aid of a court of equity may be invoked in behalf of a judgment creditor, where such aid is rendered necessary by the interposition by the defendant of some fraudulent or inequitable obstruction to the collection of the judgment, independently of which the remedy would have leen ample at law.

In such case the party proceeds upon the ground that the defendant lias property, either real or personal, liable to execution upon his judgment : but that by the obstruction interposed, such execution is prevented from having full effect.

The bill- in this case contains the necessary allegation that the defendant has such property, and also a sufficient statement as to the fraudulent conveyances; but it is insisted that the complainant has not acquired a title to the land by the issuing and levy of an execution thereon before the filing of the bill.

Much learning has been expended in this case as to the meaning of this word title. I take it to mean no more than this, that the party has acquired a right to the property in dispute — a right to question the title of the fraudulent grantee — who holds by conveyances giving him-a perfect title as against the grantor, but which may be avoided by a creditor.

In McElwain v. Willis, 9 Wendell 561, a leading case in New York on this subject, Nelson, J. says, “the jurisdiction of the court rests upon the right or title of the complainant acquired by the proceeding at law upon the judgment or execution.” It will be remembered that in that state a judgment at law becomes a lien upon real estate from the time it is docketed, and that personal property liable to execution is holden from the time of the delivery of a writ of fieri facias to the sheriff.. This doctrine seems to be well sustained by the authorities.

In the early case of Angel v. Draper, 1 Vernon, 399, a demurrer was sustained to a bill by a judgment creditor to reach the goods of his debtor in the hands of a fraudulent assignee, for the reason that the plaintiff ought actually to have sued out a fieri facias before he filed his bill. Shirley v. Watt, 3 Atk. 200, was a bill to redeem a leasehold estate: held, that until execution the plaintiff had no lien on the estate, and the bill was for that reason dismissed.

These two English cases are referred to in Wiggins v. Armstrong, 2 John. Ch. R. 144. Chancellor Kent there states, “ the reason of the rule seems to be, that until the creditor has established his title he has no right to interfere, and it would lead to an unnecessary, and, perhaps, a fruitless and oppressive interruption of the exercise of the debtor’s rights. Unless he has a certain claim upon the property of the debt- or, he has no concern with his frauds.” See, also, 1 Dev. Eq.R. 107.

The law upon this subject is so well settled and so clearly expressed in the opinion of Chancellor Walworth, in the case of Beck v. Burdett, 1 Paige 308, that I use his words as better than any language of my own. He says: “ There are two classes of cases where a plaintiff is permitted to come into this court for relief, after he has proceeded to judgment and execution at law without obtaining satisfaction of his debt. In one case, the issuing of the execution gives to the plaintiff a lien upon the property, but he is compelled to come here for the purpose of removing some obstruction fraudulently or inequitably interposed to prevent a sale on the execution. In the other, the plaintiff comes here to obtain satisfaction of his debt out of property of the defendant which cannot be reached by execution at law.”

It will be observed that in that case it was personal property that was alleged to have been fraudulently assigned, and that is why the chancellor speaks of the lien having been obtained by the issuing of an execution. It is true he speaks of an actual levy being necessary to enable the plaintiff to hold the property against other execution creditors, or bona fide purchasers: but this is founded upon the language of their statute, exempting such persons from the effect of the lien created by the mere delivery of the fi.fa. to the sheriff.

The chancellor refers to Angel v. Draper, and Shirley v. Watts, as being cases of the description first mentioned, and to McDermutt v. Strong, 4 John. Ch. R. 687, as one of the latter class — for the reason that in that cause the interest of the judgment debtor was not a proper subject of seizure and sale upon execution, and that in such case the actual return of the execution unsatisfied, is necessary to give the court of chancery jurisdiction to decree satisfaction out of the equitable property of the defendant.

In such case it is also held, upon the authority of Edgell v. Haywood, 3 Atk. 357, that it is the filing of the bill after the return of the execution at law, which gives the plaintiff the specific lien. In this state no lien is acquired at law upon real estate, until the actual levy of an execution.

The complainant in this case, therefore, had not acquired such a right to the real estate conveyed to Barton as to entitle him to be aided in enforcing his execution at law upon the judgment. He does not show that if he could successfully dispute the title of Barton he would be en-tilled to the benefit of tbe decree of this court. But it is insisted this is a good creditor’s bill under the statute.

Piad .the defendant Hubbard retained any equitable interest in the land, such interest would be the proper subject of a creditor’s bill; and if there was no fraud, the grantee would be an unnecessary party to the bill, as the complainant, by tbe decree of the court, would be subrogated to all the rights of the defendant, including tire right to call upon the trustee in the same manner as the defendant himself might have done. Edmeston v. Lyde, 1 Paige 637.

But where no rights remain to the debtor, none could by the decree be transferred to tbe plaintiff, and his bill would be entirely ineffectual for that purpose. Id.

The complainant cannot reach this property as equitable assets in the hands of Barton. The conveyance being fraudulent as. to him, he has a right to treat the property as though it had never been made, and only needs the assistance of this court to remove the cloud thrown over the title, to have satisfaction under his execution at law; but he is not entitled to that assistance until he places himself in a position to ask it.

It follows, that the decree in chancery must be affirmed.

Decree affirmed.