Williams v. Hubbard

1 Walk. Ch. 28

• Court: Michigan Court of Chancery
• Decided: July 15, 1842
• Status: Published

Opinion

The Chancellor.

There are two classes of cases in which a judgment creditor may come into this Court fox-relief. First, In aid of his execution at law ; as to set aside axx incumbrance or a transfer of property made to defraud creditors. Second, To have his judgment paid out of choses in action, or other property of the debtor not liable to execution. Beclc v. Burdett, 1 Paige R. 305. Relief is given in these two classes of cases on different principles. In the first class, on the ground of fraud; and in the other, on the ground that the complainant has exhausted his remedy at law, and that it is inequitable and unjust for the debtor, under such circumstances, to refuse to apply any choses in action, or other property belonging to him not liable to execution, in payment of the judgment.

To entitle a party to the aid of this Court ixi the first class of cases, air execution must have been issued, but it is not necessary that it should have beeix returned; Glarkson v. De Peyster, 3 Paige R. 320; McElwain v. Willis, 9 Wend. R. 548; or, if it has been, that a new execution has been taken out. The right to come into this Court for relief in this class of cases, is complete the moment an execution is issued. The fraudulent conveyance then works an injury to the creditor, by hindering and delaying him in the collection of his judgment. But when the creditor asks to have his judgment satisfied out of property belonging to the debtor, not liable to execution, he must show not only that an execution has been taken out, but that it has been returned unsatisfied in whole or in part. This should be shown by the officer’s return to the writ, which, to be a good and sufficient return for that purpose, should be such a return as would subject the officer to an action at the suit of the debtor, for a false return, if a bill should be filed against him in this Court, when he had property that might have been levied on and sold to satisfy the execution. The officer’s return in the present case shows that Hubbard had goods and chattels in his possession, which were levied on, but that they were mortgaged; and that the execution was returned unsatisfied by the directions of the complainant, and not on the personal responsibility of the officer, as it should have been to make him accountable for a false return. A party suing out an execution, may, if he chooses, direct it to be returned unsatisfied, but he cannot afterwards turn round and sue the officer for a false return, or file a bill in this Court to have his judgment satisfied out of dioses in action belonging to the debtor. The demurrer would therefore be good, if this were the sole object of the complainant’s bill.

It is not unusual for judgment creditor’s bills to be so framed as to include the two classes of cases I have mentioned ; and there appears to be no objection to such a course. The debtor might not have sufficient dioses in action to satisfy the judgment, and in that event it would be necessary to file a second bill to set aside fraudulent conveyances made by him, if the two could not be united in the same bill. The complainant’s bill is a bill of this description. There-is no special prayer, it is true, to set aside the conveyance from Hubbard to Mooney, but under the general prayer for other and further relief the complainant would be entitled to have it set aside, if it should turn out on the final hearing, to have been made to defraud creditors. To this part of the bill the demurrer is bad. It must therefore be overruled, it not being a good defence to the whole bill.

Demurrer overruled.