Hills v. Sherwood

By the Court, McKinstry, J.:

The defendant claims that the judgment in Stolces v, Sherwood and Winterburn is a bar to the present action.

For the purposes of this opinion it may be admitted that the judgment would bind the creditors of the estate of James Stokes to the same extent as the executors themselves would be bound; and that the defendants in ejectment would have been permitted to attack the deed made by the testator in his life-time, as made in fraud of his creditors. If, however, the matter relied on or relief sought is peculiarly of equitable cognizance, the judgment at law is not a bar to a bill addressed by the defendants in the ejectment, as plaintiffs, to the equity side of the District Court. (Lorraine v. Long, 6 Cal. 453; Hough v. Waters, 30 Cal. 309; Ayres v. Bensley, 32 Cal. 620.)

The general rule is that the jurisdiction in equity is limited to cases where there is no remedy at law, or none that is plain, adequate and complete. The application here is made in a case where the jurisdiction is, to some extent, concurrent, but where the peculiar remedy sought cannot be administered in a Court of law. The defendants in ejectment would perhaps have been able to maintain their possession, on the ground that the deeds of the testator and of Sarah B. Clark were void as against creditors; but they could not have obtained a decree annulling the deeds as against the creditors, except upon, the allegations of a cross-complaint praying affirmative relief. “Before the case can be considered beyond the reach of a Court of equity, it must be made to appear that the legal remedy would be adequate and complete.” (Hager v. Shindler, 29 Cal. 55.)

Appellants also contend that the plaintiff—as judgment creditor of the estate of James Stokes, deceased—cannot maintain an action to reach property fraudulently conveyed by the testator in his lifetime.

It was at one time much disputed whether an administrator could set aside a fraudulent conveyance of the personalty by the intestate; and, under our system, a fraudulent conveyance of the realty would stand upon a like footing. But the right of-the executor or administrator to maintain suit was settled by sections two hundred and two and two hundred and three of the Probate Act. Those sections provide that the executor or administrator may (on the application of a creditor, who shall give security for costs and expenses) prosecute any proper action with reference to such fraudulent conveyance.

The purpose of the statute is accomplished by empowering the executor or administrator to prosecute the suit. It does not purport to exclude the creditors from bringing it, if they are authorized so to do by the general law. “The creditors have their remedies independently of the administrator; for a fraudulent donee, taking or keeping possession of the goods, is at common law liable as exe'cutor de son tort; and the creditors are entitled to go into equity against the property in the hands of the fraudulent grantee.” (1 American Leading Cases, fourth edition, 43.)

The conveyance from James Stokes to his wife vested in her—as against the grantor and his heirs or devisees—his whole estate in the land conveyed. (Act concerning fraudulent conveyances, Sec. 20; Bank of U. S. v. Burke, 4 Blackf. R. 141.) Except for the sections of the Probate Act above referred to, the executor could not render available or reduce to assets that which the testator could not demand or recover; nor would the Probate Court have any control of the fund arising out of a sale of the property fraudulently conveyed. I express no opinion as to whether, if it appeared that there were other creditors than those who initiated the proceedings, the District Court would confine itself to annulling the conveyances as against'all the creditors. Here it does not appear that there is any other creditor, and there can be no reason why a Court of equity should not decree a sale of the premises .and an application of the proceeds to the plaintiff’s debt.

The judgment against the executor proves the indebtedness prima facie in favor of the plaintiff as against the grantees of the testator. (McLaughlin v. Bank of Potomac, 7 How. U. S. R. 221.) ■

Judgment and order, denying motion for new trial affirmed.