Bruce v. Hoidal

Holt, J. Appeal from an order sustaining a demurrer to a complaint in the nature of a creditor’s bill. To an understanding of the question presented, this short summary of the facts alleged may be sufficient: June 18, 1910, plaintiff contracted to buy from defendant Hoidal certain lands in Canada. In September following Hoidal induced plaintiff to turn over .to him the purchase price, but has fathed to deliver the deed as agreed, or give possession of the land, and by reason thereof plaintiff lost, in addition to the land, the opportunity to crop [363] it, and lie asks for specific performance or damages. In November, 1909, plaintiff claims Hoidal sold bim twenty-eight shares of stock, fraudulently representing such stock to be worth par, or $100 per share. Nineteen of the shares thus sold were accepted by Hoidal as part payment of the Canada land, when he induced plaintiff to pay the purchase price as above stated, and at the same time he obtained possession of the other nine shares. These he refuses to return, and plaintiff avers that, when he ascertained that Hoidal had misrepresented the value of the shares, he offered to rescind. The shares were not worth more than one-third of the represented value. Plaintiff has begun two actions in the district court of Hennepin county .against Hoidal, one of which is for specific performance or damages for breach of the contract to convey the said Canada lands, and the other for deceit in the sale of said nine shares of stock. Then it is alleged that on June 10, 1910, Hoidal, who had bought and paid for valuable land in Polk county, conspired with his uncle, Weum, the other defendant herein, to place such land beyond the reach of Hoidal’s creditors, and for that purpose the conveyance was taken in the name of Weum, in trust for Hoidal. Hoidal has no other property, except certain real estate in Minneapolis, Minnesota, and it is averred that as to the latter he has placed mortgages thereon for more than its value, but that these mortgages were so placed for the purpose of defrauding his creditors and placing the property out of their reach. In said pending actions against Hoidal a writ of attachment issued; but there is no allegation that the same was levied either upon the Polk county land or upon the real estate in Minneapolis. Plaintiff in the present action asks that the court adjudge the legal title to the Polk county land to be in Hoidal, and that said land be attached and held to respond to any judgment that may be entered in said pending actions against Hoidal. For the purpose of this decision we may assume that the allegations in the complaint are sufficient to - show that the land in Polk county, although the legal title thereto is in Weum, is in fact Hoidal’s, and may be reached by the creditors of the latter, regardless of the time the indebtedness was incurred. Therefore we may regard the pleading as in the nature of a creditor’s bill. In this state the [364] rule appears well settled that in such an action the complaint must show that the creditor has exhausted his remedy at law, or at least-proceeded far enough to have obtained a judgment against defendant or a lien on the property by him fraudulently attempted to be covered up. Massey v. Gorton, 12 Minn. 83 (145), 90 Am. Dec. 287; Wadsworth v. Schisselbauer, 32 Minn. 84, 19 N. W. 390; Spooner v. Travelers Ins. Co. 76 Minn. 311, 79 N. W. 305, 77 Am. St. 651; Williams v. Kemper, 99 Minn. 301, 109 N. W. 242. However, where it appeal's that the remedy at law is unavailing, because-the debtor has absconded or is a nonresident, equity will give relief. Overmire v. Haworth, 48 Minn. 372, 51 N. W. 121, 31 Am. St. 660 Rule v. Omega Stove & Grate Co. 64 Minn. 326, 67 N. W. 60. But such is not this case. On the contrary, plaintiff has elected to bring two separate actions against Hoidal, without therein joiningWeum, or attempting to reach property in Weum’s hands belonging-to Hoidal. He has therein obtained writs of attachment, but has not caused the same to be levied on the Polk county lands, nor on the Minneápolis real estate of Hoidal, so far as the allegations go.. It occurs to us that the pleader has succeeded in showing that he has an ample statutory remedy. But, if he has not, he can, by the use of the attachment, secure himself, or at least obtain a position where he has some basis for asking equitable relief. The cases of Pendleton v. Perkins, 49 Mo. 565, and Gates v. McClenahan, 124 Iowa, 593, 100 N. W. 479, relied on by plaintiff, do not sustain him, but are in accord with the holding of this court in Overmire v. Haworth, supra. It is not necessary here to consider the doctrine announced in Case v. Beauregard, 101 U. S. 688, 25 L. ed.. 1004; Chamberlin v. Jones, 114 Ind. 458, 16 N. E. 178; Miller v. Hughes, 38 S. C. 513, 17 S. E. 366, and Early Times v. Zieger, 9 N. M. 31, 49 Pac. 723, to the effect that it is not necessary under-certain conditions to exhaust the legal remedies against a debtor before suit in the nature of a creditor’s bill; for, as above stated, it appears that in the actions pending plaintiff has remedies that he has not exhausted, nor used to an extent of becoming effective. Order affirmed.