Stark v. Lamb

78 N.E. 668, 167 Ind. 642, 1906 Ind. LEXIS 79

• Court: Indiana Supreme Court
• Decided: October 10, 1906
• Docket: No. 20,568
• Status: Published

Opinions

Montgomery, J.

Appellee Lamb brought this suit to collect a promissory note executed by Milo W. and Henry Stark, and to set aside, as fraudulent, certain conveyances of real estate. Milo Stark was adjudged a bankrupt pending the litigation, and the action dismissed as to him. Appellants answered by general denial, and, at their request, the court made a special finding of facts, in substance as follows: Milo and Henry Stark executed the note August 19, 1901, which now amounts to $223, and at the date of the note Henry owned real estate as described, and Abbie N. Stark was his wife. Henry continued to own the real estate until April 27, 1903, when he and his wife conveyed the same to David Lingman, who on the same day, without consideration, reconveyed it to Henry and his wife. On April 27, 1903, and continuously after-wards, Henry was and remained a resident householder of Elkhart county, Indiana, and had no property, other than said real estate, subject to execution. At the date of said conveyances Milo Stark owned property of the value of $2,682, and was indebted to the amount of $550, but on September 11, 1903, he was insolvent and subsequently adjudged a bankrupt and duly discharged in bankruptcy. Said conveyances- were made to protect said Abbie N. Stark in the possession and use of the whole of said real estate, and with intent to defeat and defraud the creditors of said Henry Stark. The second conclusion of law stated upon such facts is as follows: “Said conveyances, from the defendants, Henry Stark and Abhie N. Stark, to David Lingman, and from said David Lingman to the defendants, Henry Stark and Abbie N. Stark, are each fraudulent and void as against the plaintiff, and should be set aside.”

1. It is alleged that the court erred in this conclusion of law, and argued that in the absence of a finding that Milo Stark as well as Henry was insolvent at the time the fraudulent conveyances were made this conclusion cannot be sustained. It is a familiar principle that resort to a court of equity may not be had, so long as an adequate legal remedy exists. In the application of this rule it has been held by this court that, so long as a legal remedy exists against one or more joint debtors, equity will not extend its relief and set aside a fraudulent conveyance of another of such debtors at the instance of the common creditor. Eller v. Lacy (1894), 137 Ind. 436. See, also, Geiser Mfg. Co. v. Lee (1903), 33 Ind. App. 38.

2. 3. It is specifically found that Henry Stark was insolvent at the time of making the conveyances attacked, and at all times since, and that the deeds were without consideration and made with fraudulent intent. Milo Stark was solvent at the time the deeds were made, but became insolvent a few months afterwards, and was subsequently adjudged a bankrupt and discharged from his financial obligations. It is therefore plain that appellee Lamb must collect his debt from the real estate in controversy, or lose it. The circumstance that Milo Stark was solvent at the time the fraudulent conveyances were made, does not make them any the less fraudulent,

and the rule forbidding a premature resort to equity was not intended to take away a right of action and deny a salutary remedy, but merely to limit their exercise to cases of actual necessity and thereby prevent unnecessary litigation. No substantial reason is shown why appellee should not avail himself of the remedy sought in this suit, but, on the contrary, it is entirely clear that without equitable interference he would be wholly without relief.

The conclusion of law is supported by the facts found, and the judgment is affirmed.