Feldenheimer v. Tressel

• Decision Date: 03 June 1889
• Citation: 6 Dak. 265,43 N.W. 94
• Parties: Feldenheimer v. Tressel et ux.
• Court: South Dakota Supreme Court

43 N.W. 94

6 Dak. 265

Feldenheimer

v.Tressel et ux.

Supreme Court of the Territory of Dakota.

June 3, 1889.¹

Appeal from district court, Hutchinson county.

Bill filed by Jacob Feldenheimer as judgment creditor against John J. Tressel and Mary S. Tressel, his wife. A demurrer to the bill was sustained, and plaintiff appeals.R. B. Tripp, for appellant. G. P. Harben, for respondents.

SPENCER, J.

This is a bill filed by the plaintiff, as a judgment creditor, for the purpose of having declared void and set aside a conveyance of the defendants' lands, alleged to have been made fraudulently, and praying that such lands may be subjected to the judgment recovered by said plaintiff against the defendant John J. Tressel, previous to the filing of this bill, and that the same may be sold in satisfaction of plaintiff's judgment. The material allegations of the complaint are as follows: That the defendant John J. Tressel and one Stoner were copartners in 1884, engaged in the mercantile business under the firm name of Tressel & Stoner; that during the year 1884 said firm became indebted in the sum of several hundred dollars to the plaintiff; that at that time said firm, and particularly said Tressel, was solvent; that after said indebtedness was incurred the said Tressel purchased the entire interest of said Stoner in the property of the said copartnership, and became the exclusive owner thereof; that said Tressel pretended in 1885 to have become insolvent and unable to pay his debts; that during that and the following year he made false and fraudulent assignments and conveyances of his property for the purpose of cheating and defrauding his creditors; that he has concealed his property and by sundry mesne conveyances has invested his wife, the defendant Mary S. Tressel, with the apparent title thereto; that on May 3, 1886, the plaintiff, in the district court of this territory, recovered a judgment against the defendant John J. Tressel and said Stoner, and that such judgment was duly entered and docketed in the proper office; that execution was regularly issued upon said judgment to the sheriff of the proper county, and was before the commencement of this action returned wholly unsatisfied; that by reason of the fraudulent conveyance made by said defendant John J. Tressel said execution cannot be made or collected; that about April 8, 1886, said Tressel purchased of one Weisz certain real estate of the value of several hundred dollars, and paid the consideration therefor from his own funds, and became the owner thereof; but, instead of taking the title thereof to himself, procured the said Weisz to execute the conveyance thereof directly to his wite, said Mary S. Tressel, for the purpose of defrauding his creditors, and especially this plaintiff; that such deed was duly recorded, and the title remained in the name of said Mary S. Tressel at the time of bringing this action, though the premises are in fact the premises of said defendant John J. Tressel; that said Mary S. Tressel had knowledge of these fraudulent acts and purposes of said defendant John J. Tressel, and has assisted and colluded with him to defraud his creditors and this plaintiff. To this complaint the defendants demurred on the ground that the complaint did not state facts sufficient to constitute a cause of action, the particular ground of demurrer being that creditors' bills will not lie in this territory, for the reason that the provisions of the Code of Civil Procedure in regard to proceedings supplementary to execution have superseded the remedy by creditors' bills, and now furnish in this jurisdiction the exclusive remedy to judgment creditors to subject property to the satisfaction of their debts.

What were the powers of the court of chancery in reference to creditors' bills? The court of chancery formerly had cognizance of bills filed by judgment creditors, after they had exhausted their remedies at law, to subject lands fraudulently conveyed to the payment of their judgments, (Edgell v. Haywood, 3 Atk. 357; Edmeston v. Lyde, 1 Paige, 637;) and by the filing of such a bill the creditor acquired a lien upon lands which were superior to any subsequent conveyance. Such bills were sustainable under the ordinary jurisdiction of the court. Its power to hear such cases and set aside fraudulent conveyances which stood as obstructions to executions at law was inherent in the court, and not dependent upon any statute. Beck v. Burdett, Id. 305. From its earliest history the court of chancery has exercised the power of compelling the transfer of the title to real estate by obliging parties holding the legal title to convey it, or by directing it to be sold by some officer of the court appointed for the purpose, or by declaring the title by which it was held fraudulent, and subjecting it to sale under an execution at law. Mould v. Williamson, 2 Cox, Ch. 386; Edgell v. Haywood, 3 Atk. 357; Burroughs v. Elton, 11 Ves. 33. These decisions have since been followed, both in England and in this country, particularly upon bills by judgment creditors to set aside fraudulent conveyances. Thus it was held in Hendricks v. Robinson, 2 Johns. Ch. 283, that one creditor might maintain a bill on behalf of himself and other creditors, or on behalf of himself alone, to have certain conveyances of his debtor declared fraudulent and void; and in Cuyler v. Moreland, 6 Paige, 273, that a bill will be sustained filed by a judgment creditor for the double purpose of removing a fraudulent obstruction to an execution at law and of reaching the debtor's equitable assets; and though a fraudulent assignor dies before judgment against him, a creditor's bill will lie to set aside a fraudulent conveyance made by him. Frazer v. Western, 1 Barb. Ch. 220. In Wakeman v. Grover, 4 Paige, 23, the bill of a judgment creditor to obtain satisfaction out of his debtor's equitable assets was sustained, as was also a bill filed by such a creditor for the enforcement of his judgment out of property which the debtor had fraudulently placed out of his reach. Weed v. Pierce, 9 Cow. 722. It is therefore settled beyond question that originally the court of chancery, in the exercise of its equitable powers, had jurisdiction of creditors' bills brought for the purpose of setting aside fraudulent conveyances, or reaching equitable assets which the defendant had put in the hands of third parties; and the plaintiff in the suit at bar, having exhausted his remedy at law by the return of his execution, as appears from his bill, was in situation to ask the aid of equity to set aside the alleged fraudulent conveyance, if the facts should demonstrate that it was so, and to reach the equitable assets, if any, which had been put out of his reach by the defendant. The supreme and district courts of this territory have, under the organic law, chancery, as well as common-law, jurisdiction, (Organic Law, Comp. Laws, § 33;) and hence this complaint in its present form may be maintained unless some other remedy equally effectual has been provided by law. It is claimed that such remedy has been provided by the Code of Civil Procedure in its provisions in regard to proceedings supplementary to execution, and that this remedy is exclusive. We are unable to assent to this proposition, for several reasons. The remedy afforded by proceedings supplementary to...