Crippen v. . Hudson , 13 N.Y. 161 ( 1855 )

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[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] The first question in these cases is, whether the suits can be sustained as creditors' bills, founded upon the judgments and executions thereon returned unsatisfied. The judgments were rendered before a justice of the peace, and the executions ran only against personal property. It is, therefore, necessary to consider, in the first place, whether in the court of chancery such a suit could have been sustained without first docketing the judgment, so as to make it a lien on the defendant's real estate, if any he had, and issuing an execution on which that might be sold. In Dix v. Briggs (9 Paige, 595), it was decided by the chancellor that the legal remedy upon a justice's judgment was not exhausted until the judgment had been docketed in the county clerk's office, and an execution against real estate had been issued. In Coe v. Whitbeck (11 Paige, 42), the same proposition is maintained. In that case the chancellor intimates a doubt whether an averment, that the defendant, neither at the time of issuing the execution nor at the time of filing the bill, had any real estate or chattels real which could have been reached upon execution, might not suffice to entitle the plaintiff to maintain his bill, on a justice's judgment, and an execution against personal property only. The question is, however, left undetermined; the case not requiring a decision upon the point. For the same reason its determination is not now necessary, because the averment of insolvency in the complaints now before us is made to refer to the time of the execution of the mortgages and assignments set out therein, and not to the time of the issuing of the executions or of the commencement of the suit. Upon these authorities, it is quite clear that this suit, in this aspect of it, would not have been sustained in the court of chancery.

It is argued, on the part of the plaintiff, that the requirement of an execution actually returned unsatisfied is matter of form merely; and that the substantial fact to make out which satisfactorily, that requirement was introduced, is made to appear in these complaints by averment; that under the Code, such an averment should be deemed sufficient, especially as the legal and equitable jurisdictions are now blended. To these arguments there are several answers. In the first place, the complaints contain no averment, either that at the time when the execution was issued, or at the time of the commencement of the suit, the defendants in the judgments had no property, real or personal. There is, therefore, no averment of that which, as it is contended, the return of an execution unsatisfied tends to prove. In the next place, it is clearly shown in McElwain v. Willis (9 Wend., 548), that the actual return of an execution unsatisfied was essential to the maintenance of such a bill, both before and under the Revised Statutes; and that the place of such an averment could not be supplied by an allegation of a total want of property. This rule, thus well established, is not directly changed by the Code of Procedure; and as the court of chancery required executions to be returned unsatisfied, when issued on its own decrees, before it would entertain creditors' bills founded upon them, I do not see that the union of legal and equitable jurisdiction in the supreme court furnishes any reason for departing from the well established rule. In this aspect, there fore, the plaintiff cannot sustain his suit.

There was, however, another class of cases in which a judgment creditor might resort to a court of equity. Where the property was, in its own nature, subject to sale upon execution, and the creditor had obtained judgment and issued execution, and thus acquired a specific lien upon the property in question, but was prevented from obtaining satisfaction of his debt by some fraudulent or inequitable obstruction or embarrassment. In these cases, the aid of the court of chancery was sought in the execution of the legal process, so that the satisfaction, when obtained, was had by means of and through the instrumentality of the legal process alone. To entitle the party to this aid, it was incumbent upon him to show that there was property on which he had obtained a legal lien, either by virtue of his judgment docketed, if real estate, or by virtue of an execution issued, if chattels; so that, the obstructions being removed by the action of the court of equity, he could pursue his legal remedy with effect. (McElwain v. Willis, before cited.) The complaints now before us do not show that any property of the judgment debtors was of that kind that could be sold upon execution, except what was actually levied upon by the sheriff. As to this portion of the property, it appears by the complaints that it had been taken out of the custody of the sheriff and sold by the defendants other than the judgment debtors. It does not, therefore, affirmatively appear that any determination of the court, in respect to the validity of the incumbrances or assignments which had been made of the property levied on, would have enabled the plaintiffs to subject it to sale for the satisfaction of their claims. In this aspect, therefore, the complaints cannot be sustained.

The remaining view upon which the suits are sought to be supported is, that they are to be regarded as instituted to procure an equitable administration of the assets of an insolvent partnership among the creditors of the firm. The answer to this position is, that to entitle the plaintiff to interfere adversely in the administration of the partnership assets, he must, in the first place, acquire an equitable lien by exhausting his legal remedy, or in some other way. A creditor at large has no standing in court upon such a question. Before the case ofDillon v. Horn et al., (5 How. P.R., 35), no such doctrine was ever started. That case seems to have proceeded upon the supposed analogy between its circumstances and those which appeared in Innes v. Lansing (7 Paige, 583), while it is quite apparent that Chancellor Walworth put the decision in that case upon the plain distinction which exists between a limited partnership under our statute and a common mercantile partnership. The question is well considered in Greenwood v.Brodhead (8 Barb., 593), by Justice Parker, and he arrives, after considering all the cases, at the conclusion that a lien must be obtained upon the property, before the creditor can invoke the equitable powers of the court to control its administration.

I am, therefore, of opinion that upon neither of the grounds taken by the plaintiff can these suits be maintained, and that the judgments appealed from should be affirmed.

CRIPPEN, J., took no part in the decision.

Judgment affirmed.