Field v. Chapman

13 Abb. Pr. 320, 22 How. Pr. 329
CourtNew York Supreme Court
DecidedDecember 15, 1861
StatusPublished
Cited by3 cases

This text of 13 Abb. Pr. 320 (Field v. Chapman) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Field v. Chapman, 13 Abb. Pr. 320, 22 How. Pr. 329 (N.Y. Super. Ct. 1861).

Opinion

Allen, J.

—The plaintiffs, are creditors of Isaac 1. Hunt & Co., a firm composed of the defendants Isaac L. Hunt and Julia [325]*325A. Chapman, and in these actions seek to reach the dioses in action, and equitable interests of that firm, and property alleged to have been transferred, in fraud of their rights as creditors, to the defendant George M. Chapman. In a word, these actions are creditors’ suits, and are governed by the same rules which governed creditors’ bills in the late Court of Chancery.

Had the objection been urged that sixty days had not elapsed between the issuing of the executions upon the judgments at law, and the commencement of these actions, I should have felt constrained to hold the objection well taken, following the decision at general term in the Fifth District, and the construction given by the chancellor to the statute regulating this equitable remedy. (Cassidy a. Meacham, 3 Paige, 311 ; Strang a. Longley, 3 Barb. Ch., 650.) But as it was not relied upon, but simply suggested by the defendants, the motion will be decided without further reference to it.

A more important objection to the plaintiffs’ proceeding and action is, that there has not been a substantial exhausting of the legal remedy against the debtors.

A creditor at large cannot resort to a court of equity to reach, the choses in action of his debtor, or to set aside a fraudulent sale or conveyance of property; neither can a creditor at large, of a partnership, come into a court of equity to marshal the. partnership assets, and compel their application to the payment of partnership debts, either ratably or with preferences. (Hastings a. Belknap, 1 Den., 190 ; Andrews a. Durant, 18 N. Y., 496 ; Reubens a. Joel, 3 Kern., 488 ; Crippen a. Hudson, Ib., 161 ; Greenwood a. Broadhead, 8 Barb., 593 ; Kirby a. Schoonmaker, 3 Barb. Ch., 46.)

But one of the debtors was served with process in the action at law ; and although the judgment is in form against both, it is not so for any purpose, except to subject the property which she owns jointly with the other defendants to the execution upon the judgment or judgments against her. (Oakley a. Aspinwall, 4 Comst., 573 ; 3 Kern., 500; Code, §§ 376 et seq.)

All defences are open to her in proceeding to enforce it against her; and her individual property cannot be reached, or at all affected by the judgment.

The statute is, that “ whenever an execution against the property of a defendant shall have been issued on a judgment at law, [326]*326and shall have been returned unsatisfied, in whole or in part, the party suing out such execution may file-a bill in chancery against such defendant,” &c. (2 Rev. Stat., 173, § 38)

Ho judgment at law has been recovered against Julia Ann Chapman, and no execution has been issued against her upon any such judgment; and against her, therefore, within the letter of the statute, a creditors’ bill will not lie; and yet, without her, as a party, such a suit would be defective.

But, aside from this literal reading of the statute, it requires a bona-fide attempt to collect the debt, by execution at law, before the equitable powers of the court can be invoked, in aid of the judgment at law. The creditor must have pursued his legal remedy to. every available extent, before he can resort to equity for relief.

This was the established rule in chancery before the Revised Statutes, and the rule thus became a part of the positive law of the State. (Brinkerhoff a. Brown, 4 Johns. Ch., 671 ; Hendricks a. Robinson, 2 Ib., 283 ; Wiggins a. Armstrong, Ib., 144 ; Crippen a. Hudson, and Reubens a. Joel, supra.)

Where there are two or more joint-debtors, the remedy at law must be exhausted against all, before the statute requiring a bona-fide attempt to collect the debt can be said to have been made. It is only on a failure of the legal remedy that equity lends its aid in the collection of a legal debt.

■- If there is any excuse for not proceeding to final execution ■against one or more joint-debtors,—as that he is out of the jurisdiction of the court, a bankrupt, or a surety, or the like,—the facts relied upon should be stated in the complaint in the equitable action.

- Where the judgment is against several, the creditor must exhaust his remedy by execution against all before he can come into a court of equity for relief. (Child a. Bean, 4 Paige, 309.) The reasoning of Yice-chaneellor Gardiner, fully approved by the chancellor, is entirely applicable to the case of joint-debtors, when all had not been served with process, or so proceeded against as to subject their individual property tó an"execution at-law, which is this case. For, if having a judgment; it is necessary to resort to execution against all, a fortiori, it is necessary that the demand" should be established by a judgment at law as a valid demand against all.

[327]*327It would be a palpable evasion of the statute to permit a creditor to obtain a judgment against joint-debtors, by service upon one, and upon the return of an execution resort to equity; and great abuse not only might but almost inevitably would result from such practice.

The best firms in New York city might find themselves defendants in a creditors’ suit, upon the return of an execution, upon such á judgment by the sheriff of the county of Kings or Westchester, where the party sued might' chance to reside, and the courts would be flooded with litigation entirely unnecessary.

Judge Gardiner says: “The necessity contemplated by the decision upon the subject should exist and be established before resort to this court. Sound policy requires thisand again: “ The only way to guard this court from an influx of business that will be overwhelming, and to save debtors from an expense equally destructive to their interests and the interests of their creditors, is strictly to adhere to the wholesome rule, that, before relief can be had here, the remedy at law must be, not in name only, but in fact, exhausted.” The chancellor in the same case says, “ that where there are several defendants in a judgment, who are jointly holden for the payment of the plaintiff’s debt, he should exhaust his legal remedy, by execution against the property of all, before he applies to this court for relief.” Host certainly, the legal remedy cannot be exhausted, when not only no execution has been issued but no j udgment has been obtained against all.

Both judgment and execution against all are necessary to entitle the creditors to this equitable relief. The same principle was reaffirmed in Howard a. Sheldon (11 Paige, 558) ; and this case is not distinguished from that, by the fact that, in that there was a former judgment against all the defendants for the same debt. Here there ought to have been one.

It is unjust to all the joint-debtors, as well those served as those not served, to subject them arid their joint property to the costs of this expensive remedy before the cheap remedy at law has been fairly and fully tried.

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Cite This Page — Counsel Stack

Bluebook (online)
13 Abb. Pr. 320, 22 How. Pr. 329, Counsel Stack Legal Research, https://law.counselstack.com/opinion/field-v-chapman-nysupct-1861.