Hargreaves v. Tennis

88 N.W. 486, 63 Neb. 356, 1901 Neb. LEXIS 362
CourtNebraska Supreme Court
DecidedDecember 18, 1901
DocketNo. 10,562
StatusPublished
Cited by8 cases

This text of 88 N.W. 486 (Hargreaves v. Tennis) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hargreaves v. Tennis, 88 N.W. 486, 63 Neb. 356, 1901 Neb. LEXIS 362 (Neb. 1901).

Opinion

Pound, C.

Charlotte Blair, a milliner, being in embarrassed circumstances, executed a chattel mortgage conveying her stock of goods to her son-in-law, and also transferred a considerable amount of real property belonging to her to his bookkeeper. Thereafter certain of her creditors brought [358]*358attachment proceedings, in the course of which they garnisheed the mortgagee of the stock, while he held it under the chattel mortgage. On obtaining judgments against Mrs. Blair, and after return of executions thereon unsatisfied, the creditors brought a general creditors’ suit to set aside the transfers of the real property, cancel and set aside the chattel mortgage, and for general relief. They also set up liens upon the stock by virtue of said garnishment proceedings. John H. Blair filed a cross-petition, alleging that he was the husband of Mrs. Blair, and claiming a portion of the real property in question as a homestead. Three trials were had in the court below, each resulting in findings for the plaintiffs. At the last trial, with which alone we are concerned, the. court made full and complete findings of fact and law to the general effect that the transfers, both of the stock and of the real property, were fraudulent and void as to creditors, and rendered judgment accordingly. It was also found that John H." Blair was entitled to a homestead in the property described in his cross-petition, and his title thereto was quieted. Error is prosecuted by the mortgagee of the stock of goods.

In view of the relation between the parties, and the consequent incidence of the burden of proof, it is manifest that the findings of the trial court as to the nature and purpose of the transfer are sustained by the evidence. The points chiefly urged in argument, and those which alone require our attention, are points of law. It is first contended that the petition fails to state a cause of action, for three reasons: Because there is no allegation “that Charlotte Blair, the judgment debtor, was a resident of Lancaster county, Nebraska”; because there is no allegation that the garnishee was insolvent or that for any reason the statutory action at law for unsatisfactory answer in garnishment was not adequate; and because there is no allegation that plaintiffs had no adequate remedy at law. We are unable to perceive any force in the first objection. Section 207, Code of Civil Procedure, requires [359]*359that- the garnishee, not the attachment debtor, be within the county; and by the express terms of the Code an attachment is maintainable against a non-resident, so that the validity of the garnishment did not necessarily depend upon the residence of the judgment debtor. It is alleged that judgments were duly rendered against her, which, under section 127, Code of Civil Procedure, sufficiently alleges all prior steps and shows jurisdiction of the person of the defendant. If it was intended to object because the residence of the garnishee is not alleged, it may be remarked that the Code merely requires that he be “within the county” and that the petition shows this garnishee answered in the garnishment, proceedings, and that he was .holding in the county the stock of goods in respect of which he was garnisheed. Nor is the next objection of any force. The attaching creditors acquired an equitable lien upon the stock of goods by garnishment without regard to the solvency or insolvency of the garnishee. Reed v. Fletcher, 24 Nebr., 435, 458; Grand Island Banking Co. v. Costello, 45 Nebr., 119. And after garnishment the creditors might bring" the same proceedings to protect or enforce their equitable lien that an attachment creditor or other lien holder might maintain. Reed v. Fletcher, supra. “The validity of a mortgagee’s right to chattels held in his actual possession by virtue of his mortgage may be called in question by a garnishing creditor alleging and proving fraud, as well as by an actual levy on the chattels in defiance of the claims of such mortgagee.” Grand Island Banking Co. v. Costello, supra. Such a suit is in the nature of a creditors’ suit, to reach the goods and property of the judgment debtor fraudulently 'disposed of and enforce the equitable lien upon the goods arising from the garnishment. All equitable rights and charges are enforceable by appropriate proceedings in equity. Although we now have a further statutory remedy by action at law for unsatisfactory answer, the equitable remedy by creditors’ bill is not superseded. Maxwell, Code Pleading, 165. In this case there were also fraudulent transfers of real [360]*360property to a person other than the garnishee, and hence a creditors’ bill to roach all the property and adjust the claims of all the creditors in one suit was appropriate, if not necessary. Stoll v. Gregg, 23 Nebr., 228. It was not essential to show insolvency of the garnishee or any other fact rendering the statutory action for unsatisfactory answer inadequate. As to the last objection, if the facts alleged entitled the plaintiffs to proceed in equity, there was no need of a formal allegation of no remedy at law. Ball v. Beaumont, 59 Nebr., 631. The old “jurisdiction clause” is omitted to-day even in formal chancery pleading. Objection is also made that the court rendered a money judgment against the mortgagee who held the stock. But as he disposed of the goods and converted the proceeds, no other remedy was possible.v Where the subject of an equitable lien is put out of existence by the defendant, the court, having once obtained jurisdiction of the cause, will give complete relief by way of a money judgment/ Morrissey v. Broomal, 37 Nebr., 766.

The court fixed the value of the stock of goods at $3,800, but rendered judgments against the fraudulent vendee amounting to about $4,100. This is complained of as error and it is argued that the liability of a garnishee can not exceed the value of the property or amount of the fund actually in his hands. This would often be true where he was an ordinary debtor or trustee of the judgment debtor. But in this case lawful interest upon the value of the stock from the time it came wrongfully into the hands of the defendant in question to the date of the decree amounts to more than the difference between the value of the stock and the amount for which he was held liable. Hence the question comes to this: Is one who takes a stock of goods under a fraudulent conveyance to defeat the vendor’s creditors, and disposes of them and converts them to his own use, chargeable with interest upon their value? There can be but one answer. In equity the property belonged to the creditors, not to him. He converted their property, and deprived them of its use, or the use of the money it would [361]*361have brought them, and their right to compensation therefor is obvious. Risser v. Rathburn, 71 Ia., 113, 32 N. W. Rep., 198.

Another alleged error grows out of the fact that the' stock of goods was sold under the fraudulent chattel mortgage for much less than its value as found by the court. Counsel argue that the mortgagee’s liability is that of a garnishee only; that the plaintiffs had a lien upon the goods and their proceeds, and, the goods having been sold,. recovery should be limited to the proceeds in his hands. For like reasons they argue that he is entitled to credit for certain articles included in the conveyance, which were stolen from him while he held thereunder. These questions have been settled many times.

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Bluebook (online)
88 N.W. 486, 63 Neb. 356, 1901 Neb. LEXIS 362, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hargreaves-v-tennis-neb-1901.