Kent v. Curtis

HaydeN, J., delivered the opinion of the court. This is a suit in equity to subject certain real estate to a elaim not in judgment. The petition alleges that the' plaintiffs employed the defendant F. B. .Curtis as their agent to — 123 — sell for casb. certain goods which they entrusted to his care, or which he was to buy for cash as their agent; that he was to receive the price, pay specified expenses, and to remit balances each week by draft on New York; that defendant continued a certain time in their employ, received goods to a certain amount, failed to account for a large portion, and converted the proceeds to the amount, etc. The petition then describes a lot of land lying in the city of St. Louis, and states that it was conveyed to the defendant Eliza, wife of F. B. Curtis, in whose name it is ; that only a small part of the price, $1,000, was paid out of her money, and nearly the whole price, $12,000, was paid,-after the demand of the plaintiffs against F. B. Curtis accrued, by him, with and out of his money or property, and out of the proceeds of goods of the plaintiffs; that after such conveyance, F. B. Curtis, subsequently to the time the demand accrued, caused buildings to be erected on the land, which were paid for by him ont of his money and out of the proceeds of plaintiffs’ goods ; that F. B. Curtis is completely insolvent, owns or holds no property out of which the claim could be satisfied, and- that a judgment at law against him would be unavailing. The prayer is for a decree for the amount, that the premises be sold, and that out of the pi’oceeds of the sale the amount contributed by F. B. Curtis be paid to plaintiffs as part satisfaction of their demand, etc. There was a demurrer to this petition, on the ground that it did not state facts sufficient to constitute a cause of action. The demurrer was • sustained ; there was judgment for the defendants on the demurrer, and the case is here by writ of •error. The first point of the appellant is that, when a judgment against the debtor ivould be fruitless, it is unnecessary to obtain a judgment and have execution returned nulla bona before proceedings in equity are taken. But the question is not as to the issue and return of execution, but as to the necessity of obtaining judgment.- -It is a well-known rule — 124 — of equity that where a court of chancery is rightfully in possession of a cause it will proceed to determine the whole matter in controversy, even if the adjustment of merely legal rights, or rights for which there are adequate legal remedies, are involved. But, as was said by Chief Justice Marshall, in Pussell v. GlarJds Executors, infra, it is only by an abuse of this rule that cases essentially proper to a. court of law can be brought into equity. When the principal matter of controversy, the right which is the foundation of the plaintiffs’ claim, is a cause of action at law, and is unadjusted, the well-established rule is that it should be-ascertained and settled at law by reduction into judgment, wherever it is possible to do so. The cases cited by the appellants from the reports of this State do not militate against-this view. In Turner v. Adams, 46 Mo. 95, the claim of the plaintiff was in judgment at the time of the filing of the bill. In Pendleton v. Perkins, 49 Mo. 565, the debtor had absconded, so that a judgment could not be obtained against him. In Merry v. Fremon, 44 Mo. 520, it is said: “ The object is, in the first place, by judgment, to reduce-the creditor’s claim to certainty, —to show that he is, in fact, a creditor. Unless the party shows that, he has no concern with the debtor’s supposed frauds.” It might have been added that, unless the claim is reduced to judgment, equity assumes at the outset, without any ground of equity jurisdiction, to ascertain and adjust a merely legal claim. It i» no answer to say that the debtor is insolvent. That does-not touch the question. Insolvency may be a good excuse-for not issuing execution, for that might be a useless act. But to obtain a judgment at law would not be useless. It. would settle the legal right; would ascertain the fact, Avith the ascertainment .of Avhich equity has nothing to do. It would secure the right of trial by jury in cases not of equity jurisdiction. It would prevent courts of equity from becoming the forum for the trial of suits for unliquidated damages and of actions for tort; for if the jurisdiction of — 125 — equity is not to depend on the nature of the demand-, or on the question whether legal remedies have first been exhausted, why, in any case where the final process at law is inadequate to subject property to the payment of debts, may not a creditor with a claim for damages, however arising, sue first in chancery ? It is an error to suppose that the object of obtaining a judgment is merely to establish a lien. The judgment ascertains and establishes the right and marks the line between common law and equity jurisdiction. Without it the plaintiff has no standing in a court of equity. The essential distinction between law and equity cannot be broken down until constitutional changes are made. It exists not only in proceedings in the trial courts, but in those in the appellate tribunals. If actions of tort and for unliquidated damages generally may be tried by a chancellor in the lower courts, where there is merely ■some defect or impediment in the final process, then the higher courts must consider the whole case and decide upon the evidence, according to the course of the civil law upon appeals. That which, under our system of law, is deemed the peculiar function of the jury is thus interfered with and their province is usurped by the courts. In cases like this at bar, the creditor at most needs the aid of a court of equity to enable him to get satisfaction of a judgment from property out of which he cannot make the debt at law; or, as has been said, to obtain an equitable fieri fiadas. Yet there is no allegation in the petition to the effect that the defendant F. B. Curtis is dead, or beyond the limits of the State; nothing, in short, to show that judgment could not have been obtained against him in a court of law. If, under the circumstances of this case, a judgment is necessary to ascertain the plaintiffs’ demand and give them a standing in equity, the allegation to the effect that a large part of the amount paid for the real estate was contributed by F. B. Curtis out of the proceeds of the plaintiffs’ property will not help their case. The objection recurs that, be — 126 — fore entering upon an investigation of the acts alleged to be fraudulent, the court of chancery is required to ascertain whether any legal demand exists, when no reason is shown why the appropriate tribunal has not been appealed to. To do this work, to put the claim in judgment, the remedy was here plain, -adequate, and complete. If, after this had been done, the plaintiffs had reached a point where there was no sufficient remedy at law, they should then have appealed to a court of equity. To cite the great body of cases in which it has been expressly held or assumed, as a proposition not open to argument, that a judgment must be obtained at law where this is possible, would be uselessly to encumber this opinion. It is sufficient to state some of the apparent exceptions which prove the rule. Thus, by the cases which hold that a judgment at law is a prerequisite where the debtor is dead (Tharp v. Feltz’s Administrator, 6 B. Mon. 16; Watts v. Gayle, 20 Ala. 823; Steere v. Hoagland, 39 Ill. 264; Unknown Heirs, etc., v. Kimball, 4 Ind. 546), or is beyond the jurisdiction, so that process cannot be served upon him (Pendleton v. Perkins, supra; Scott v. McMillen, 1 Litt. 302; Brittain v. Quiet, 1 Jones Eq. 328), or where the remedy at law is suspended, so that it cannot be made use of for the time being (Mallory v. Vanderheyden, 3 Barb. Ch. 9), the doctrine is clearly shown to be that the creditor must first reduce his claim to judgment if he has it in his power to do so. It has been held that, where no judgment existed when-the bill was filed, but where a judgment was obtained and a supplemental bill then filed, the creditor had no standing in equity. Williams v. Brown, 4 Johns. Ch. 682; Brown v. Bank of Mississippi, 31 Miss. 454. And-though the bill charges fraud in the procurement of goods, and the creditor’s claim rests upon a cause of action so arising, yet if the bill treats the defendant as a debtor, and proceeds upon that relation, there must be a judgment. Wiltshire v. Marfleet, 1 Edw. Ch. — 127 — 654. If, however, tbe primary object of tbe bill, tbe first and principal purpose wbicb it is intended to accomplish, presents in itself a cause of equity cognizance, the case is obviously not within the rule. Thus, where by the direction of the debtor the property had been conveyed in trust, for the general benefit of his creditors, to one of the defendants, and the bill was filed for all of the creditors, to establish the trust, it was held that these facts constituted the ground of jurisdiction. Miller v. Davidson, 8 Ill. 518. The case of O’Brien v. Coulter, 2 Blackf. 421, is sometimes cited as authority for the position that a judgment is not necessary to give jurisdiction to equity; but in that case the debtor was dead, and the creditors had no complete remedy at law. It is conceived that the dictum of Chief Justice Marshall, in Russell v. Clark’s Executors., 7 Cranch, 89,— “ it is also true that if a claim is to be satisfied out of a fund which is accessible only by the aid of a court of chancery, application may be made in tbe first instance to that court, which will not require that the claim should be first established in a court of law,” — refers to cases where the legal remedy is not open to the creditor, otherwise the dictum does not seem to be supported by the adjudged cases. It is not easy to see how a distinction can be made on the ground that there is a fund accessible only by the aid of a court of chancery. Equity does not regard the mere form which property may happen to take ; and whether the property is real estate or -money, it may with equal propriety be said that there is a fund accessible only by the aid of a court of chancery. The cases where the property of the debtor has been attached are expressly put upon the ground that the creditor has acquired a lien, and that this fact gives the jurisdiction. Stone v. Anderson, 26 N. H. 516; Tappan v. Evans, 11 N. H. 327; Hunt v. Field, 9 N. J. Eq. 36. Our Attachment Act provides that any attaching creditor-may maintain an action for the purpose of setting aside any — 128 — fraudulent conveyance or encumbrance of or upon any property attached in any action instituted by him. Wag. Stat. 192, sec. 51. It was contended by the respondent in the present case that, as upon the facts set out in the petition, the appellant had a right to proceed by attachment against the property, this action would not lie. This position, and the bearing of the section just quoted upon it, it is not necessary to consider, as, for the reason above stated, the demurrer was properly sustained, and the judgment of the court below must be affirmed. All the judges concur in this conclusion.