Ward v. McKenzie

Lindsay, J. The principal question raised by the pleadings and the evidence in this case is, whether a non-resident creditor, who has obtained his judgment in another State, can successfully assail and set aside a voluntary conveyance, made by his insolvent debtor, of his lands in this State, and subject them to the payment of his demand. In April, 1849, the plaintiffs, now defendants in error, recovered a judgment in the State of Louisiana against Samuel Ward, as the indorser of a bill of exchange. On this unsatisfied judgment, in Louisiana, they again recovered a judgment in New York, in May, 1858. The demand still remaining unsatisfied, the judgment debtor in New "York, in April, 1856, made a voluntary conveyance to his son, of six hundred acres of land which he owned in Texas; and the son, pending the suit in New York, in Octobei’, 1857, made a conveyance, without consideration, of the same land to a stranger, charged with notice of all the facts connected with the alienation of the land and the indebtedness of the judgment debtor of the defendants in error. By an original attachment, sued out in the county of Colorado of this State, where the six hundred acres of land were situated, the defendants in error commenced their suit upon their judgment obtained in the State of New York. This suit was commenced on — 314 — the twenty-third of March, 1859, and was finally decided by the district court on the twenty-third of September, 1868. This judgment is brought here for revision by writ of error. - It may be assumed that whatever privilege, benefit or advantage. a resident citizen may derive from the provisional remedy of attachment, which has been created by the attachment law of this State, is equally accessible and available to any citizen of any State of t the United States, because the Constitution of the Unitéd States has declared, that “ the citizens of each State shall be entitled to all the privileges and immunities of citizens in the several States.” All the civil rights and obligations conferred or imposed by the laws of a State, upon its own citizens, may be enjoyed and must be submitted to by the citizens of other States, whenever the action of a State tribunal is invoked for their adjustment, or enforcement. It is not a matter of mere comity among States, but it is a constitutional guaranty. Whatever of right, then, exists in a resident citizen to proceed by attachment upon such a state of facts as is presented by this record, exists, also, in any citizen of the United States who may seek the interposition of the courts here to' enforce his just or equitable demands. If, therefore, a resident citizen, who holds a just claim against a non-resident or absent debtor, can proceed by attachment against such non-resident or absent debtor, whatever be the character of the claim, provided it bo a-just one; so may a non-resident creditor proceed in the same way, when he shall have complied with the requisitions of the attachment laws. The same verification by oath of the amount and justice tf the demand is necessary in either case, with a statement of the existence of any one of the causes enumerated in the statute, to warrant the issuance of the attachment. But then, in either case, there must be property of the absent debtor within the territorial jurisdiction of ■ the court to sustain the proceeding. If neither the person, nor any property of the defendant be found within the ter — 315 — ritorial limits of the jurisdiction of the court, the whole proceeding de inlegro is a nullity. There must either be the person of the defendant or the property of the defendant to confer jurisdiction upon the court. This is indispensable, whether the proceeding be by judicial or original attachment. In a judicial attachment, upon suit instituted, the. citation must be returned “ not found ” to entitle the party to the writ. If no property be found in the jurisdiction and taken into the custody of the law,„by virtue of the writ, no valid judgment can be rendered in the cause. Such a judgment would be an absolute nullity, both at home and abroad. It is obvious, therefore, that it is not the character of the claim or demand which confers jurisdiction upon the court in proceedings by attachment. "It is the writ of attachment itself, when served, demonstrating the existence of property belonging to the defendant within the territorial jurisdiction of the court, which confers the actual jurisdiction in the particular ease. The potential jurisdiction of the court exists over all civil rights and obligations which arise within its territorial jurisdiction; but that jurisdiction, to become, actual, must be acquired by some step taken by an actor in some suit or proceeding in the court. This may be done as well by original attachment as by an ordinary petition filed, and a citation issued, served and returned by the proper officer. When the citation is returned “ executed ” upon the person in the one case, and the writ of attachment is returned “ levied ” upon the property in the other, the potential jurisdiction is then acquired; and the subject matter, or the lis mota, then being under the control of the court, whether it be of legal or of equitable cognizance, according to the laws of Texas, the court has full power to deal with it, and dispense justice according to the right of the case. But it is plausibly and ingeniously argued, that before the voluntary conveyance can be contested by the creditor, he was bound to get a judgment, upon his New York judgment, in this State, — 316 — before he could obtain a lien upon the land ■ attached; and in support of this view, the opinions of Justice Story and Chancellor Kent, two of the ablest expounders and brightest luminaries of the law on this continent, it is readily conceded, are relied upon. But if this conclusion he correct, it will forever preclude a nonresident creditor from subjecting the property of a non-resident debtor, situated in a State different from his domicile, to the payment ofohis debts, however ample that property might be for that purpose. For it is by the attachment alone that' the local court could ever acquire jurisdiction to give him a judgment upon his just demand, whether the demand exist in the form of bonds, notes, judgments or other evidences of indebtedness. The local court can give no judgment upon a mere order of publication against a non-resident, without property within its local limits to confer jurisdiction. Hence the requirement, in such a case, to obtain a judgment here first, and then proceed to assail and set aside the voluntary conveyance, is altogether illusory. It is keeping the word of promise to the ear, and breaking it to the hope. No judgment can he had without the attachment. The attachment puts the specific property in custodia leg is, under the control of the court, by the diligence of the creditor. Then, having jurisdiction of the subject, like all courts of equity, it has full power to grant the relief sought. Once having the jurisdiction, no matter how acquired, it never can be imputed to a court of equity, as acting inequitably, to compel a party to he just before he becomes generous, even independent of the statute of the 13 Elizabeth, which might even have been done by a common law court, as was strongly intimated by Lord Mansfield; fraud, whether actual or constructive, being a matter of concurrent jurisdiction in courts of law and in courts of equity. There are different kinds of lien recognized in the jurisprudence cf most, if not all of the American States—the common law lien. which is the right to retain the possession of the property of — 317 — another until some claim, or charge upon it, is satisfied; an equitahe lien, which may exist independent of the actual possession of the property, as in the case of a vendor’s lien, and certain statutory liens, given to mechanics and others by express legislative enactment. Now, although an attachment may be (which is not conceded here) technically a lien upon the property of the debtor, yet, when that property has been attached as his property, it is then in the custody of the law, and no ground can be discovered in law, logic or reason, why, upon an allegation of insolvency, the voluntary conveyance of it may not be pronounced by the court, fraudulent and void as to existing creditors at the time of conveyance, and the property subjected to the payment of a just demand. The reference to Story’s Eq. Jurisprudence, § 375, by no means sustains the proposition that in this country the creditor must obtain a lien upon the land of the debtor, by judgment, before he can seek the aid of a court to set aside a voluntary conveyance. That is only the English doctrine applied to, and deduced from, the English statute against fraudulent devises, which, not embracing fraudulent conveyances in its provisions, the courts of that country have adjudged that a voluntary conveyance, made in the lifetime of the intestate, cannot be set aside, except by those who have reduced their debts to judgment before the death of the party. Although this be the English doctrine, the author, in the very next paragraph, point3 out the difference 'between the English and American doctrine, growing out of the fact that lands are universally, in America, assets for the payment of debts. But in England lands can only be so used by the process of cleg it, which places it in the possession of the creditor, to be held by him, very much as the mortgagee holds the land of the mortgagor, till the rents and profits shall satisfy and extinguish the indebtedness. The case of Wiggins and others v. Armstrong and others, Johns. Oh., 149, is not a parallel case with the present. It was not a proceeding against an absent or absconding debtor. Nor — 318 — was it a proceeding by attachment. It was an attempt to call in the aid of a court of equity to a court of law before it was manifest that the party was really entitled to the remedial agency of either. Or it was a mere attempt to shift the forum of trial. Or, in the expressive language of the learned attorney, it was carrying on two proceedings, and attempting to make them “ ride double,” which, it is conceded, is anomalous, and repugnant to every system of pleading. In this case, the party swears to a just indebtedness and obtains his attachment, which was levied on the land as the property of the debtor; and it was thus held in custodia legis, which, although it does not exactly correspond to a lien, in the opinion of Justice Story, yet, according to his admission, it operates as “ a contingent and conditional charge until the judgment and levy.” {Ex parte Foster, 2 Story’s Reports, 131.) This court, however, has distinctly recognized the doctrine in the case of Meuley v. Zeigler, 23 Texas Reports, that an attachment does create a lien upon' the specific property attached. The levy of the attachment confers jurisdiction upon the court, and operates as a lien until judgment can be had upon the justice of the demand ; and if any obstructions lio in the way of the execution and sale of the property in satisfaction of the judgment, the court, as a court of equitable as well as of common law cognizance in the same suit, can remove all such obstructions without compelling parties to circuity of action for the final adjustment of their rights. It is needless to refer to decisions of the various State courts to support the doctrine, that the levy of an attachment upon the property of a debtor operates as a lien. Nearly all, at least a large majority of them, distinctly recognize it. And if it operates as a lien, it will hold it till judgment and until execution can issue; and if it be in a forum, which dispenses both law and equity in the same suit, every obstacle and obstruction to the satisfaction of the judgment, to the full extent of the property attached, can he .removed out of the way,. (See Scott v. McMillen, 1 Littell’s Ky. Reps., 302.) — 319 — This was a voluntary conveyance of an insolvent debtor, as established by the proof upon the trial. According to the better doctrine and construction of the statute against fraudulent conveyances enunciated by Chancellor Kent, it was- constructive fraud upon existing creditors —legal fraud—an inference of law, from the mere fact of indebtment at the time of the conveyance. But if this stern and rigid rule of the learned Chancellor, which is the better guarantee of private and social integrity, pushes the doctrine beyond the qualification of intention in the grantor, still the jury have pronounced upon' the facts, and settled by their verdict' that the conveyance was fraudulent, and it was therefore void as to existing creditors. Another question is raised in this case: it is founded upon the exclusion of-the testimony of Samuel Ward, the principal defendant and party to the record, and of his wife, Lucy Ward, whose depositions had been taken in favor of A. L. Ward, a co-defendant, and the alleged fraudulent alienee of Samuel Ward, the insolvent debtor. It is insisted in argument that the rule of evidence announced by this court in the case of Rogers & Oliver v. John M. Patterson, at the Galveston term, 1869, is carrying the principle of exclusion beyond its rational limits, as recognized by the more modern decisions. In Rogers & Oliver v. Patterson, it was announced that a party to- the record was incompetent as a witness for his co-suitor; that this was a common law rule—a rule which had obtained for a time whereof the memory of man runnelh not to the contrary. Phillips on Evidence, volume 1, p. 29, says : “■ The general rule formerly was that a party to the record, in a civil suit, could not be a witness at the trial, for himself or for a joint suitor, against the adverse party.” So says Mr. Starkie. Mr. Greenleaf, volume 1, section 829, says: “The general rule of the common law is that a party to the record, in a civil suit, cannot be a witness cither for himself or for a co-suitor in in the cause.” So- says Mr. Blackstone. Mr. Greenleaf. fur — 320 — ther says, in volume 1, section 356 : “ The mere pleading of any matter of personal discharge, (by a defendant, in actions ex contractu,) is not alone sufficient to render the party a competent witness; and it has been held that he is not' entitled to a previous verdict upon that plea for the purpose of testifying for the others.” Such is the law as it aforetime was—the common law rule upon the subject. ■ Lord Denman’s act for improving the law of evidence, of 6 and 7 Victoria, precluded such an innovation upon the rule of evidence as the rendering a party individually named • in the record, to any suit, action or proceeding, competent to testify in the cause. The statute of Texaá (December 20, 1886, Article 3706, Paschal’s Digest,) declares: “ The common law of England, as now practiced and understood, shall, in its application to juries and evidence, be followed and practiced by the courts of this Republic, so far as the same may not be inconsistent with this act, or any other law passed by this Congress.” This court, therefore, as mere expounders of the law, and not its makers, can see no reason to qualify the announcement of the rule in the case Rogers & Oliver v. Patterson. The depositions of Samuel Ward and Lucy Ward, his wife, were therefore properly excluded. ■ Wherefore, the judgment of the district court is affirmed. Affirmed.