Miller, Trustee v. Maryland Casualty Co.

180 S.W.2d 581, 207 Ark. 312, 1944 Ark. LEXIS 663
CourtSupreme Court of Arkansas
DecidedMay 22, 1944
Docket4-7351
StatusPublished
Cited by7 cases

This text of 180 S.W.2d 581 (Miller, Trustee v. Maryland Casualty Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Miller, Trustee v. Maryland Casualty Co., 180 S.W.2d 581, 207 Ark. 312, 1944 Ark. LEXIS 663 (Ark. 1944).

Opinions

McFaddin, J.

This appeal presents questions concerning foreign judgments, creditors’ suits, and trusts.

The Maryland Casualty Company recovered judgment in personam in the United States District Court for the Southern District of Texas against Mrs. Anne Wood Loclier for $13,000, and a nulla bona return was made on the execution issued 'on that judgment. The judgment and return were duly authenticated under the United States statutes. (U.S.C.A. Title 28, § 687.) Thereafter, this present suit was filed by the Maryland Casualty Company in the nature of a creditors ’ suit, or equitable execution, in the chancery court of Crawford county, Arkansas, based on the unsatisfied Texas Federal judgment and return evidenced by the authentication previously mentioned. The defendants named in this Arkansas suit were Mrs. Locher, individually, and Dell Miller, Harry Wood and D. L. Hodges, as Trustees under the wills of Norma Wood, deceased, and Margaret Wood, deceased. The complaint alleged that the administration of each of the estates had long been closed and Mrs. Locher was beneficiary of one share in each trust estate for and during her natural life and that the trustees of the two wills were handling the trust funds of the estates and were making annual payments to Mrs. Locher of all of her share of income; and the complaint prayed that the annual pajunents going to Mrs. Locher should be paid to the Maryland Casualty Company during the life of Mrs. Locher until the Texas judgment should be satisfied. The complaint alleged the non-residency of Mrs. Locher and her insolvency and the absence of any property belonging to her in the State of Arkansas. Mrs. Locher was served with summons in the State of Texas under the provisions of § 1374 of Pope’s Digest. She made no appearance or defense in this case. The three trustees were personally summoned and made the defenses which we will discuss herein. Mrs. Locher testified by deposition taken on behalf of the trustees.

The Crawford Chancery Court found that the balance due on the Texas judgment was $12,042 with interest at 6 per cent, from October, 1940; and that Mrs. Locher was a citizen of Texas and had no property in Texas or elsewhere subject to execution or attachment except her equitable interest in the trust here involved; and that under the wills involved Mrs. Locher was entitled to receive for her life the income from one share in the trust; and that this was not a spendthrift trust. Accordingly the chancery court enjoined the trustees from paying to Mrs. Locher any of the future net income of her share of the trust and decreed that the trustees should pay the future income of Mrs. Locher’s share of the trust, during the lifetime of Mrs. Locher. to the Maryland Casualty Company until the said judgment of $12,042 should have been paid in full. From this decree the trustees (appellants) have brought this appeal. Six questions are presented either directly or inferentially; and we proceed to state and discuss them.

. I. Is A Cause of Action Stated?

At the outset we have a creditor’s suit based on a foreign judgment. Does the foreign judgment have to be domesticated before a creditor’s suit can be maintained? In 14 Am. J. 689 in the discussion of creditors’ suits the general rule is recognized: “The prevailing-rule is that a foreign judgment is not sufficient to support a creditor’s bill to reach assets of the defendant which cannot be reached in proceedings at law, and that, in the absence of statute to the contrary, the creditor is required to set forth in his bill a judgment in the jurisdiction where the suit in equity is brought or to show that it is impossible to obtain such a judgment in any court within such jurisdiction.”

But in continuing the discussion of the same subject there are mentioned, in the same authority, several recognized exceptions and some of these exceptions are (1) impossibility or impracticability, (2) where judgment dispensed with by statute, and (3) nonresidence or absence of the debtor. On the first of these exceptions it is stated in 14 Am. J. 695: “The general rule that equity will not enforce a demand by creditor’s bill until a judgment has been obtained and an execution issued thereunder and returned unsatisfied, or at least partially unsatisfied, is not applied without exception; its application is limited by the reasons which support it. The impossibility, impracticability, or futility of exhausting- the remedy at law has been held to be a sufficient excuse for not doing so.”

The second exception to the rule is stated in 14 Am. J. 695 as follows: “In some jurisdictions the necessity of a previous judgment as a condition precedent to obtaining equitable relief under a creditor’s bill is dispensed with by statute. A statute_ authorizing bills by creditors to reach and apply to the payment of a debt any property right, title, or interest, legal or equitable, of a debtor, which cannot be attached or taken at execution in a suit at law against such debtor, has been construed to authorize the creditor to proceed without first obtaining judgment. Such statutes, being remedial, are given a liberal construction to effect the object designed.” Our own case of Riggin v. Hillard, 56 Ark. 476, 20 S. W. 402, 35 A. S. R. 113 is cited to sustain the text.

On the third exception (nonresidence of defendant), the rule is stated in 14 Am. J. 697 as follows: “The weight of authority supports the view that nonresidence or absence of the debtor, as where he is a fugitive from justice, obviates the necessity of a prior judgment at law, at least where such nonresidence or absence renders it impossible or impracticable to obtain such a judgment and there is no adequate remedy by which the debtor’s property can be reached. The theory underlying the rule is that a prior judgment is required in any case merely because it is the best evidence that the creditor has exhausted his remedies at law, and that where the non-residence or absence of the debtor has rendered it impossible to obtain this evidence, equity may act upon other evidence which it finds is sufficient to show that the creditor has no adequate remedy at law. Equity does not permit a nonresident debtor to escape payment of the just claim of a resident creditor because his absence from the jurisdiction prevents the creditor from obtaining a personal judgment against him, and there is no other adequate remedy at law to reach the debtor’s property. ’ ’

Among other authorities cited to sustain the text there is the annotation in 38 A. L. R. 272. See, also, 21 C. J. S. “Creditors’ Suits,” § 45. We think that the case at bar comes within one if not all of the three exceptions to the general rule as has been pointed out. These exceptions would dispense with the necessity of first obtaining any judgment. So even if we consider the Texas judgment as mere evidence of indebtedness, we reach the conclusion that the Texas judgment and the nulla bona return thereon and the proof of Mrs. Locher’s insolvency and absence from this state dispense with the necessity of a domestic judgment; and to that extent a cause of action was stated.

II. Is There Sufficient Service¶

Since Mrs. Loclier was not in Arkansas to be served and did not enter her appearance, there was therefore no personal service on her in this state.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

J.B. Hunt, LLC v. Thornton
2014 Ark. 62 (Supreme Court of Arkansas, 2014)
Thompson v. Bank of America
157 S.W.3d 174 (Supreme Court of Arkansas, 2004)
Sanders v. Putman
866 S.W.2d 827 (Supreme Court of Arkansas, 1993)
In Re Hartman
115 B.R. 171 (W.D. Arkansas, 1990)
Cannaday v. First National Bank
382 S.W.2d 589 (Supreme Court of Arkansas, 1964)

Cite This Page — Counsel Stack

Bluebook (online)
180 S.W.2d 581, 207 Ark. 312, 1944 Ark. LEXIS 663, Counsel Stack Legal Research, https://law.counselstack.com/opinion/miller-trustee-v-maryland-casualty-co-ark-1944.