Droop v. Ridenour
Droop v. Ridenour
Opinion of the Court
delivered the opinion of the Court:
This suit was brought by the appellants, Edward F. Droop & Sons, a mercantile firm, in their character of simple contract creditors of Albert M. Ridenour, against said debtor, and Alice E. Ridenour, and Frank T. Browning, trustee, to procure a decree for the payment of the alleged debt due the complainants out of an equitable interest of the debtor in certain real estate situated in this District, but which has been, as alleged, fraudulently conveyed by the debtor to Alice E. Ridenour for the purpose of cheating and defrauding the complainants.
The bill alleges the indebtedness of the defendant, Albert
The bill further charges that the equity of redemption in such share or interest remaining in said Ridenour, he has conveyed or attempted to convey to Alice E. Ridenour, a person said to be a former wife of the debtor; but which said conveyance was without consideration, and was collusively and fraudulently made to hinder, delay, and defraud the creditors of the grantor or assignor.
The prayer of the bill is, that the conveyance to Alice E. Ridenour he declared null and void, and that the property, or the proceeds of the sale thereof, be made subject to the claim of the complainants ; and for general relief.
The defendants, Albert M. Ridenour and Alice E. Ridenour, appeared to this suit by their attorneys, but without disclosing the residence of the debtor; and they each filed separate answers and demurrers to the bill. The answers
In this case, while the pleading was in a state of manifest irregularity and informality, such as could not be made to
Without pausing to consider whether the demurrer of Albert M. Ridenour, informally pleaded, should have been considered in connection with the demurrer of Alice E. Ridenour, and the bill dismissed as to both defendants, we shall consider the case as it was considered by the court below, as upon regular demurrer to the bill by both defendants.
The ground of the order dismissing the bill is understood to be, that the complainants had not sued for and recovered judgment at law, and issued execution thereon, and thus shown that they had exhausted all remedies at law. Under the facts of the case as admitted by the demurrer, is such proceeding at law a necessary condition precedent to the relief asked in such a case as the present ? We think not; and we think it would be lamentable, if such were the restrictions in the administration of justice in this District. If a party, by placing his property in trust, and removing from the limits of this District, could thus defy the efforts of his creditors to subject such property to the payment of his debts, such defect of remedial justice would be a reproach to the law.
It is certainly true, as a general principle, that a court of equity will not afford relief where the plaintiff has a plain, adequate and complete remedy at law. The party coming into a court of equity for relief, must, therefore, show that he has exhausted his remedy at law, or that the law affords no remedy to meet the requirements of his case. And where the plaintiff seeks to subject the property of the debtor to
This doctrine is clearly stated in the cases of Scott v. Neely, 140 U. S. 106; Cates v. Allen, 149 U. S. 451; and Hollins v. Brierfield Coal and Iron Co., 150 U. S. 371, 379. But the application of this general rule must be taken as dependent upon and conditioned by the facts of each particular case; and it is not so strict and unyielding as to be wholly without qualification or exceptions, to meet the exigency of particular cases. There are many cases where the demands of justice, and the inadequacy of the ordinary process of law, make it necessary that equity should interpose, rather than that the creditor should be wholly without remedy or means of redress. All that is required of the complainant is that he has done all that he could do to make effective the remedy at law, or, in other words, that he has exhausted his legal remedies, or show that the remedy at law is wholly inadequate, or that the ordinary legal remedies do not apply to the case, and hence he is without a plain, adequate and complete remedy at law. As said by the Supreme Court, in an unanimous opinion of that tribunal delivered by Mr. Justice Strong: “ After all, the judgment and fruitless execution are only evidence that his legal remedies have been exhausted, or that he is without remedy at law. They are not the only possible means of proof. The necessity of resort to a court of equity may be made otherwise to appear. Accordingly the rule, though general, is not without many exceptions. Neither law nor equity requires meaningless form: ‘ bona sed impossibilia non cogit lex.’ It has been decided that 'where it appears by the bill that the debtor is insolvent, and that the
Exceptions to the general rule, requiring judgment and execution thereon to entitle a complainant to proceed in equity, are clearly recognized by the Supreme Court of the United States in many other cases in that court, and particularly in the cases of Terry v. Anderson, 95 U. S. 636, and National Tube Works v. Ballou, 146 U. S. 517, 523. In this last mentioned case, it is said by the court that when it is sought by equitable process to reach the equitable interest of the debtor, the hill must set forth a judgment in the jurisdiction where the suit in equity is brought, the issuing of an execution thereon, and its return unsatisfied, “ or must make allegations showing that it is impossible to obtain such judgment in any court within such jurisdiction; ” citing many decided cases in support of such exception to the general rule. The whole subject is very fully and clearly treated, and the authorities collected by Mr. Freeman, in his work on Executions, Secs. 425, 426, 427.
The facts alleged in the bill and admitted by the demurrers in this case, clearly bring the case within the recognized exceptions to the general rule.
Wait, in his work on Fraudulent Conveyances, Sec. 84, has clearly stated the result of the decided cases in this country upon this subject. After stating the general doctrine to which we have referred, requiring judgment and execution
In a very able and well reasoned opinion of Mr. Justice Blackford, speaking for the Supreme Court of Indiana, in the case of Kipper v. Glancey, 2 Blackf. 356, that learned justice stated the doctrine and the reasons for it in the following terms:
“The objection to the bill is that the complainants are not judgment creditors. It is the general doctrine, certainly, that* to reach the equitable interest of the debtor in real estate by a suit in chancery, the creditor should first obtain judgment at law; and to obtain assistance in equity as to personal property both judgment and execution must be shown. One exception to this rule is where the debtor is deceased. . . . Another exception to the rule is where the debtor has absented himself from the State. This is so decided in the case of Scott v. McMillen, 1 Littell, 302. . . .
“ Where the debtor has absconded, the practice should be the same as in the cases to which we have referred. By absconding from the State, the debtor prevents the proceeding against him at law, and his creditors should be permitted to apply' to a court of chancery, as where judgments have been previously obtained, or the debtor is deceased.
“ If the absconding debtor leaves property subject to legal process, the creditors may have their demands liquidated, and may procure their respective shares of the proceeds of
The same principle is fully enunciated in the cases of Scott v. McMillen, 1 Litt. (Ky.) 302; Peay v. Graham, 10 Gratt. 149; Brittain v. Quiett, 1 Jones Eq. (N. C.) 328; Farrar v. Haselden, 9 Rich Eq. (S. C.) 331; Pendleton v. Perkins, 49 Mo. 565; Bank v. Paine, 13 R. I. 592. And in New York, in the case of Bank v. Wetmore, 124 N. Y. 241, the question was fully discussed, and the court, in the conclusion of its opinion upon the subject, says: “ But where a party has done all that is possible for him to do to prepare the way for his case to equitable cognizance, he is not to be denied access to the only tribunal capable of granting relief, merely because he had proceeded no further than he was, without any fault or laches on his part, permitted to go. That would be repugnant to the maxim that ‘there is no wrong without a remedy. ’ ”
The English chancery rule does not seem to be different from that maintained by the American authorities to which we have referred. Reese River, &c., Co. v. Atwell, L. R. 7 Eq. 347.
The bill in this case distinctly avers that the estate of the debtor, Albert M. Ridenour, in the property sought to be made subject to the complainants’ claim, is merely equitable—that it is only an equity of redemption in a certain share or portion of the real estate inherited from his mother, and which is covered by a deed of trust to Browning, as security for a debt due from Albert M. Ridenour. The legal estate, therefore, in this share or portion of real estate, is in Browning, as trustee, and the only right that Ridenour, the grantor, has in the property is the right to redeem, or the right to whatever surplus proceeds of sale that may remain after payment of the mortgage debt. This mere equity of
If, therefore, a judgment at law could be obtained, it could not be executed by legal process against the equitable interest of the defendant in the property sought to be reached by this proceeding; and the ultimate resort, after all, would be to a court of equity. The only objection that the defendant, Albert M. Ridenour, can urge is, that the claim has not been reduced to judgment upon trial by jury, or that he has not had the benefit of trial by jury in the establishment of the claim. But a right to trial by jury is not so absolute as that it may be rightfully insisted upon under all conditions and circumstances. Barton v. Barbour, 104 U. S. 126.
It is by the conduct of the defendant himself that he may elect to forego the right to trial by jury; for he may enjoy the right of such trial, if he thinks proper to appear to the pending action at law, and submit to the trial of that case.
We shall reverse the order sustaining the demurrers and dismissing the bill, and shall remand the cause for further proceedings, with cost to the appellants.
Order reversed, and cause remanded.
Reference
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- DROOP v. RIDENOUR
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- Syllabus
- Equity Pleading; When Answer Overrules Demurrer; Creditor’s Bills ; Absconding Debtors. 1. While a defendant in equity may demur as to part of the bill and answer as to the residue, he cannot demur to the whole bill and at the same time answer as to the whole bill, especially where the answer sets up everything that is in the demurrer. The answer will overrule the demurrer. 2. A bill in equity is maintainable by a creditor whose claim is not reduced to judgment, against a debtor who has absconded from the jurisdiction for the purpose of evading his creditors, to subject an equitable interest of the debtor to the payment of the debt, where the debtor has no property in the jurisdiction out of which the debt could be satisfied by proceedings at law. 3. If in such a ease, there is a pending suit at law by the creditor against the debtor in which no service of process has been had because of the absence of the debtor from the jurisdiction, and the debtor will enter an appearance in such suit, he will be entitled to a stay of the proceedings in equity to await the result of the action at law.