Mitchell v. Byrns

Mr. Justice Walker delivered the opinion of the Court: This was a creditor’s bill, filed by plaintiffs in error, in the circuit court of Edgar county, against defendants in error. It alleges that the different firms and parties complainant obtained judgments against defendants; that executions were issued and returned no property found, and that defendants have property, and conceal the same so that it can not be reached by execution at law. It is further alleged that the father of defendant Byrns conveyed to the wife of defendant Byrns lands for the expressed consideration of $10,000, which she still holds; that all, or the greater part of the consideration for this land, was paid by defendant Byrns; that he, after the conveyance was made, improved this land to the extent of $3000, out of means taken from the firm of Byrns, McKinley & McKinley, against whom the judgments were obtained when it was insolvent, and that Byrns has an equitable interest therein that should be subjected to the payment of complainants’ judgments. The bill prays a discovery touching the allegations of the bill; that an account may be taken, and that the property, when discovered, be sold to satisfy the judgments, and for general relief. To this bill a demurrer was filed. On a hearing in the court below, the demurrer was sustained and the bill dismissed for want of equity, and complainants bring the record to this court and ask a reversal. There was manifest error in sustaining the demurrer to this bill. It clearly showed such a case as required an answer from each of the defendants to the judgments. It charged facts that showed fraud, if true. It alleged that the defendants had property subject to execution, which they concealed so that it could not be seized and sold to satisfy the judgments. This charge conforms to the rules of equity pleading. Story, in his work on Equity Pleadings, sec. 28, says: “A general charge or statement, however, of the matter of fact is sufficient, and it is not necessary to charge minutely all the circumstances which may conduce to prove the general charge, for these circumstances are properly matters of evidence which need not be charged in order to let them in as proof.” . If these defendants, as charged, have such property, and are concealing it so that it can not be reached under an execution at law, it is a fraud that authorizes a court of equity to take jurisdiction to compel a discovery, and to subject it to the payment of these judgments. The law is not subject to the reproach that men may so act with impunity, and the law afford no relief. The complainants have brought themselves within the 36th section of the chancery act, and it authorizes the bill to be filed and the court to compel a discovery. This is not strictly a creditor’s bill, filed on behalf of all creditors, nor is it a mere bill of discovery without relief, but it is a statutory creditor’s bill in aid of an execution, and we have only to see that the statute has been complied with in the case made by the bill, and we find such to have been done in this case. If, as is alleged in the bill, the consideration, or a portion of it, was paid for the land when Byrns was indebted to complainants, then it was a fraudulent perversion of his means, that the law will presume was done to hinder and delay his creditors, and it should be subjected to the payment of his debts. He had no right or power in law to make a settlement on his wife at the expense of his creditors. This would be inequitable in a high degree, even amounting to a fraud that can not be sanctioned. Moritz v. Hoffman, 35 Ill. 553; Damron v. Sweeney, 47 Ill. 450; McLaurie v. Partlow, 53 Ill. 340; Bridgford v. Riddell, 55 Ill. 261, and Haines v. Haines, 54 Ill. 74. These cases fully discuss and settle the law on this question. As to the charge that Byrns appropriated funds drawn from the firm when it was insolvent, and expended it in improving the land, if true, as admitted by the demurrer, it was manifestly a fraud on these creditors. Whatever he might have done with his own labor or individual means towards improving his wife’s property, there can be no pretense that he could fairly appropriate the means of an insolvent firm of which he was a member, to such a purpose. The complainants had a right to a discovery on this as well as the other charges in the bill. There is no force in the objection that such a discovery might subject defendants to a criminal proseeution. This can not be, as the last clause of the 37th section of the chancery act, (R. S. 97,) expressly declares that no answer made to such a bill as this shall be read in evidence against a defendant on a trial under an indictment for the fraud charged in the bill. The court below erred in sustaining the demurrer and dismissing the bill, and the decree must be reversed and the cause remanded. Decree reversed.