Essex Mining Co. v. Bullard

The opinion of the court was delivered by Peck, J. Tilton and Batchelder commenced and were prosecuting this suit without any authority from the plaintiff, the Essex Mining Company. The county court decided that Tilton and Batchelder did not stand in such relation as to authorize them to institute and control the suit in the name of the Essex Mining Company without the consent and .against the will of the company ; and on motion of the Essex Mining Company, allowed a non-suit to be entei'ed with costs. To this decision Tilton and Batchelder, claiming the right to prosecute this audita querela in the name of the Essex Mining Company, except. The correctness of this decision, as to which has the right to control the suit on the side of the plaintiff, is the only question involved in the case before us; the merits of the audita querela, or sufficiency of the causes alleged in the declaration, not being material to be considered, any farther than they incidentally may have a bearing on the question of right to control the suit. There is nothing in the declaration connecting Tilton and Batchelder with the subject matter of the audita querela, or showing- any right in them to — 245 — prosecute it, or use the name of the Essex Mining Company for that purpose. This, however, is not material if the extrinsic evidence is sufficient to establish the right. It appears that the Essex Mining Company, a New York corporation, chartered and organized there, owned lands in Essex county, Vt., and owned no other property to much amount;. that the company was indebted to Bullard, (the defendant in the audita querela,) and also was indebted to Tilton and also to Batchelder ; that all were stockholders in the company, Bullard and Tilton being directors, and all agreed to sue the company, and Bullard was to bring the suits and attach the property of the company. Bullard brought suits in favor of all these parties and took judgments in them all by default ; Batchelder and Tilton not knowing of the character of the service. The property was attached first in Bullard’s suit, and then in the others subject to Bullard’s attachment. Bullard took judgment for a large sum, took out execution and levied upon .the whole'of the company property and exhausted it all in satisfying his execution. Tilton and Batchelder brought this suit for their benefit, as already stated. The parties to the judgment, execution and levy, sought to be vacated by the audita querela, have a right to have the same remain in force undisturbed, at least unless Tilton and Batchelder show a legal right to the property levied upon paramount to the right of Bullard, and also that in order to enable them to avail themselves of that right, it is necessary that the proceedings under which Bullard acquired his title be vacated and set aside by audita querela. It is claimed that the fact that Tilton and Batch-elder are subsequent attaching creditors as to the property levied on by Bullard, and have no other means of collecting their judgments, gives them the right to use the name of the Essex Mining Company in prosecuting the audita querela, and thereby to avail themselves of the alleged defect in Bullard’s judgment; that is, the want of a continuance and notice according to the provisions of the statute when defendant resides out of the state, and is not served personally with the writ. There are many errors and technical irregularities in the proceedings under a prior attachment, which the defendant in such proceedings may waive, or may — 246 — successfully interpose at bis election, but of which a subsequent attaching creditor can not avail himself; his right to object being limited to what is more substantial. If any such radical defect, or substantial ground of objection, exists in the proceedings under the prior attachment as legally ought to entitle the subsequent attaching creditor to priority of right, in respect to the property attached, the latter may avail himself of that right by levying upon and pursuing the property in disregard of the prior attachment or levy, without resorting to an audita querela or other proceeding to vacate the judgment or levy of the prior attaching creditor, he not being a party to that judgment. This is the more reasonable practise, as it interferes with the rights of the first attaching creditor as to so much of the property only as is required to satisfy the subsequent attaching creditor’s debt, while an audita querela, if it prevail, vacates the judgment or levy as to the whole, when perhaps a small portion of it only is requisite to satisfy the subsequent attachment having the priority of right. For aught that appears such is the fact in this case. If the alleged irregularity in Bullard’s judgment is such as to entitle Tilton and Batchelder in any form to priority of lien upon the property, they can avail themselves of that right without the aid of audita querela ; and if it is not of such a character, then clearly they have no right to such writ. The counsel of Tilton and Batchelder attempt to maintain their right to prosecute the suit, upon the ground that the equitable owner of a demand has the right to use the name of him who has the legal interest, when necessary to enforce it. But the parties claiming such right here are in no sense the owners of the judgment and levy they seek to vacate, nor is there any necessity of any such proceeding in order to enable them to avail themselves of all their rights to the property attached, if they have or ought to have any such right; while the prosecution of the suit may be detrimental to the parties to that judgment without being necessary to perfect any just or legal rights of the persons prosecuting this action.' The statute provides that, “ whenever a subsequent attaching creditor of real or personal property shall wish to contest the validity of the debt or claim on which a previous attachment is founded, the court before whom the process — 247 — shall be returnable on which such previous attachment shall have been made, may in their discretion permit such subsequent attaching creditor to appear by himself or counsel and defend said suit.” It is insisted that from analogy to this right, which it is claimed would exist without the statute, a subsequent attaching creditor may prosecute such audita querela. This right seems to be limited by the statute to the right “ bo contest the validity of the debt or claim on which a previous attachment is foundedbut there is an allegation in this audita querela that Bullard’s debt for which he took judgment was fictitious and fraudulent. The right to appear at the trial for the purpose specified in the statute may be serviceable to the subsequent attaching creditor if he avails himself of it. It will enable him to learn on what demands the judgment is rendered, and by what evidence they are supported; thereby furnishing him some means of judging whether they are real or fictitious. It may also be easier for him thus to prevent the recovery of a fraudulent judgment, than afterwards to prove it fraudulent without knowing what transpired at the trial. But this-right thus to appear and defend furnishes no reason why the right should be extended to trying the question in this manñer by audita querela. After the judgment has been rendered, the question as to its fraudulent character can as well be tried in an action of ejectment for the property attached and levied on, as in an audita querela. There is no necessity for an audita querela to set the judgment aside, for if fraudulent as to creditors, it is as to them absolutely void, and must be so held in such action of ejectment, although valid as between the parties to it. But it is insisted that the further fact which Tilton and Batch-elder offered to show,—that is, that Bullard agreed, before he made his attachment, that the attachment on his writ, and on Tilton’s and on Batchelder’s, should all stand on an equal footing, the property to respond to their several debts pro rata, and that upon this understanding he was employed to procure said attachments to be made, and that in fact he has taken the whole upon his own debt and refused to divide pro rata,—entitles them in the name of the Essex Mining Company to maintain this audits — 248 — querela for the causes alleged in the declaration. This agreement is not alluded to in the declaration, and it is conceded that this agreement, with the breach of it, is not a ground for the audita querela ; but it is urged that it is a good reason for allowing Tilton and Batchelder to use the Essex Mining Company’s name to prosecute the suit for the causes which are set forth in the declaration. No such effect can be given to such agreement and breach. Had Tilton and Batchelder appeared as subsequent attaching creditors to defend Bullard’s suit, proof of this agreement, and that Bullard had put his attachment on first and made theirs subject to his, would have constituted no defence. It was a matter collateral to, and could have no effect upon, his right to a judgment. By the agreement among themselves all were to sue and recover judgments. The agreement that all should share pro rata was not an agreement to which the Essex Mining Company was a party, and hence a breach of it could not affect Bullard’s right to a judgment against the Essex Mining Company in his suit. Nor can that, with the further fact that Bullard levied his execution on the whole property, be a reason for permitting Tilton and Batchelder to vacate his judgment. The agreement to share pro rata did not impair the right of Bullard to recover judgment, but related to the use to be made of it in collecting it out of the property of the Essex Mining Company, as between the three creditors. The judgment cannot be set aside because the judgment creditor has levied on more than his share under the agreement. And to set aside the judgment or the levy for that cause, would not be carrying out the agreement, but be to exclude Bullard entirely, and to place Bullard in a worse condition probably than Tilton and Batchelder claim Bullard has attempted to place them. It is evident that the rights of the three creditors of the Essex Mining Company, as between themselves, cannot be settled in this audita querela. It is not adapted to that end, nor can it advance a step in that direction. Whether Tilton and Bab-hehier have a .'"'«.al remedy against Bullard for damages for violation of the co. .. :t, or whether they can compel him in equity to stand as their trustee, and by conveyance put them in the — 249 — same condition as to the title in which they would have stood had he performed his agreement, we need not decide ; but it is quite clear the ruling of the county court was correct. We see no reason why Bullard is not legally entitled to recover his cost. Judgment affirmed.