Appeal of Fowler

• Decision Date: 11 November 1878
• Citation: 87 Pa. 449
• Parties: Appeal of Fowler <I>et al.</I> Fowler <I>et al. versus</I> Kingsley.
• Court: Pennsylvania Supreme Court

87 Pa. 449

Appeal of Fowler et al. Fowler et al. versus Kingsley.

Supreme Court of Pennsylvania.

October 25, 1878.

November 11, 1878.

October 25th 1878.

Before AGNEW, C. J., SHARSWOOD, MERCUR, GORDON, PAXSON and TRUNKEY, JJ. WOODWARD, J., absent

Appeal from the Court of Common Pleas of Erie county: Of October and November Term 1878, No. 8. In Equity.

COPYRIGHT MATERIAL OMITTED

James C. & F. F. Marshall, for appellants.—This case is within the jurisdiction of equity on the ground of fraud: Act of 13th of June 1840, Purd. Dig. 591; Act 14th February 1857, Purd. Dig. 592; Story's Eq. Jurisprudence, sect. 350; Brightly's Eq. Jurisprudence 69.

The Acts of Assembly have made sundry changes in the law making or creating the lien of creditors on the real estate of decedents since 1794. One feature in all the Acts of Assembly up to the last one of 1834, was that the debts of the decedent became a lien on the real estate of the decedent from his death, protecting all the creditors alike. A judgment recovered against the executor or administrator adds nothing to the lien of the creditor; all creditors of a decedent are placed on an equal footing in the distribution of the decedent's real estate, except those who had a lien by judgment or mortgage in the lifetime of the deceased.

We take it to be well settled upon authority that a court of equity will interfere and grant remedial justice whether the property could be reached by an execution at law or not, for otherwise a debtor under shelter of it might convert all his property into cash in defiance of his creditors, to the utter subversion of justice: 1 Story's Eq. Jurisprndence, sect. 368; Hadden v. Spader, 20 Johns. 563.

To oust the jurisdiction of equity the plaintiff's remedy at law must be full, complete and adequate: Skilton v. Webster, Bright. N. P. 203; Kirkpatrick v. McDonald, 1 Jones 387; Bank of the United States v. Biddle, 2 Pars. 31; Witman v. Lex, 17 S. & R. 91; Brightly's Eq. Jurisprudence, sect. 398; Weir v. Mundell, 3 Brow. 594; Henry v. Deitrick, 3 Norris 286.

[AGNEW, C. J. — When did Winton die? Under the intestate laws, have not these claims fastened upon his property as liens? The question in my mind is whether a creditor having an absolute lien for five years can prevent the land passing into the hands of any one except for value. The question is whether this five years lien does not cover this case. It is a question too whether this is not a bill for an injunction to prevent a fraud from being consummated, and not a bill of discovery at all.]

That is what it is.

Vincent, Benson & Brainerd, for appellee.—The testimony showed that Winton was living and kept house in Ohio. If the deceased owned land and owed debts in Pennsylvania, there must be a court here in which such claims could be adjudicated. There was no claim made in any court in the state by anybody in any way. A claimant must at least establish his claim upon the estate before he can have such process as here claimed. If they did not establish their claims they should have at least asked the benefit of an administration. They must do one or the other before they can proceed in equity. A question of fraud between debtor and creditor cannot be tried in a court of equity in this state: Winch's Appeal, 11 P. F. Smith 424. The question in this case cannot be tested in the way it is here sought to be. The parties here have no judgments, and cannot ask for the interposition of a court of equity.

Mr. Justice PAXSON delivered the opinion of the court, November 11th 1878.

The bill in this case avers that the complainants are creditors of David Winton, deceased; that he died in December 1870, leaving no property for the payment of his debts; that at the time of his decease he was indebted to the complainants in the sum of $1600; that previous to the 25th of May 1870, the said Winton was the owner of a farm in the county of Erie, Pa., in fee-simple; that on said 25th of May the said Winton made a deed of conveyance of the said farm to Carlos M. Kingsley, his son-in-law, reciting a consideration of $4000; that said conveyance was made by the said Winton to the said Kingsley for the purpose and with the intention of defrauding the complainants, and to hinder and delay them in the collection of their debts against the said Winton; that the defendant knew of and was a participant in the fraud; that the complainants were informed and verily believed that the defendant contemplated and intended selling and conveying said land to a bona fide purchaser with a view of preventing complainants from collecting their claims against the decedent out of said property. The prayer of the bill was for a preliminary injunction restraining the defendant from conveying or in any manner encumbering the said real estate, and that upon final hearing the deed from the said Winton to the said defendant be declared null and void, and that the said land be made subject to the payment of said debts. The answer in general terms negatived the material allegations in the bill and especially the charge of fraud and collusion. The bill was referred to a master, who, after an investigation of the facts, found the fraud as charged by the complainants, and recommended a decree that the land be sold by the assignee in bankruptcy of the defendant, and the proceeds of the sale be applied first, to the payment of the costs of this case; secondly, to the claims of the complainants, and thirdly, to the creditors of the defendant. Upon exceptions filed the court below dismissed the bill, upon the single ground of, want of jurisdiction. That is the one question for our consideration.

While the learned judge admits that fraud is one of the grounds for the exercise of chancery jurisdiction, and that the statute of 13 Elizabeth, making all conveyances with intent to hinder, delay and defraud creditors null and void as to such creditors, is in force in Pennsylvania, he nevertheless held that the complainants had no standing in a court of equity because they were not judgment-creditors. We need not discuss the question as to how far the position of the court below might have been sustained had this bill been filed during the life of Mr. Winton. It may be that in such case the creditors would have been compelled to commence proceedings at law to establish their claims before filing their bill, though the statute of 13 Elizabeth extends the benefit of its provisions to all creditors alike, without regard to the character of their claims. But the moment Mr. Winton died, his creditors of all classes became lien creditors under the Act of Assembly which provides that the debts of a decedent shall be a lien upon his real estate for five years after his death. We think, therefore, the mere fact that the complainants had not recovered judgment against Mr. Winton was not of itself sufficient to oust the equity jurisdiction of the court.

Fraud is one of the recognised subjects of equity jurisdiction. It is said by Judge Story, in his valuable treatise on Equity Jurisprudence, at § 350: "It must be a fundamental policy of all enlightened nations to protect and subserve the rights of creditors, and a great anxiety to afford full relief against frauds upon them has been manifested not only in the civil law, but from a very early period, in the common law also." As a general rule courts of equity have jurisdiction to relieve against every species of fraud: Chesterfield v. Janssen, 2 Ves. 155. The jurisdiction is expressly given by our Act of 13th June 1840, Pamph. L. 671, and has been constantly and repeatedly exercised since that time. It is especially adapted to this class of cases. Its process is plastic and may be readily moulded to suit the exigencies of the particular case. A court of equity proceeds with but little regard to mere form. It moves with celerity and seizes the fruits of a fraud in the hands of the wrongdoer. So long as fraud forms one of our recognised heads of equity jurisdiction, the mere statement of the...