Heiman v. Fisher

• Decision Date: 06 December 1881
• Parties: JULIUS HEIMAN ET AL., Appellants, v. ALICE C. FISHER ET AL., Respondents.
• Court: Missouri Court of Appeals

11 Mo.App. 275

JULIUS HEIMAN ET AL., Appellants,

v.ALICE C. FISHER ET AL., Respondents.

St. Louis Court of Appeals, Missouri.

Dec. 6, 1881.

1. A creditor who applies for an injunction against a married woman doing business as a sole trader, and obtains the appointment of a receiver, does not thereby acquire any right to be paid in full, to the exclusion of intervening creditors of the same class.

2. In appointing a receiver, a court of equity does not disturb prior liens or equities; but, in the absence of such liens or equities, the fund will be distributed ratably among the creditors without regard to questions of superior diligence.

3. Irregularities which do not appear to have prejudiced or injured the losing party do not furnish sufficient ground for a reversal.

APPEAL from the St. Louis Circuit Court, THAYER, J.

Affirmed.

J. A. SEDDON and S. HERMANN, for the appellants: The general creditors of a married woman have no direct “charge” or “lien” on her separate estate. Her debts are simple obligations, and bear the same relation to her property as do the debts of a feme sole to her property. Her relation to her general creditors is that of an ordinary debtor to his creditors. The only distinction pertains to the remedy. In the one case the property is reached through legal process; in the other, through equitable process.-- Miller v. Brown, 47 Mo. 507; Whitesides v. Cannon, 23 Mo. 467; Staley v. Howard, 7 Mo. App. 381; Murray v. Barbee, 3 Myl. 223; Owens v. Dickinson, 1 Cr. & Ph. 55; Tod v. Lee, 15 Wis. 373; s. c. 16 Wis. 485; Johnson v. Gallagher, 3 De. G. F. & J. 508; Nash v. Norment, 5 Mo. App. 547; Conway v. Smith, 13 Wis. 129; De Baun v. Van Wagoner, 56 Mo. 349; Maxon v. Scott, 55 N. Y. 251. In no event can an outside creditor intervene by petition in a creditor's suit until a decree is entered and the case referred to a master. For this the demurrer should have been sustained.--Story's Eq. Jur., sects. 546, 895. That all the creditors having an equal right to go against the separate estate of Mrs. Fisher, the plaintiffs, by their proceedings, have secured a priority, and Muller & Co. the right of prior satis faction out of the surplus.-- Miller v. Sherry, 2 Wall. 249 Weed v. Pierce, 9 Cow. 729; Bruce v. Vogel, 38 Mo. 106 Pullis v. Robinson, 73 Mo. 201; Boynton v. Ransom, 1 Clarke Ch. 397; Evaston v. Lyde, 1 Paige Ch. 637.GIDEON D. BANTZ and LEE & CHANDLER, for intervening creditors: “In equity it is a general rule that equitable assets shall be distributed equally and pari passu among all the creditors, without reference to the priority or dignity of the debts; for courts of equity regard all debts in conscience as equal jure naturalis, and equally entitled to be paid; and hence they follow their own favorite maxim, that equality is equity: Æquitas est quasi æqualitas.”--1 Story's Eq. Jur., sect. 554; Thompson v. Brown, 4 Johns. Ch. 619, 645. There is no specific lien conferred by or priority between debts with which married women charge their separate estate; all are equal.-- Todd v. Lee, 16 Wis. 481; Anon., 18 Ves. 258; North American Coal Co. v. Dyett, 7 Paige Ch. 9. The appointment of a receiver is a matter of sound discretion, and not a matter of right.--2 Story's Eq. Jur., sect. 831. Hence it is, that when a receiver is appointed, it is made for the benefit and on behalf of all the parties in interest, and not for the benefit of the plaintiff or of one defendant merely.--1 Story's Eq. Jur., sect. 829; Lechmere v. Brazier, 1 Russ. Ch. 80; Davis v. Duke of Marlborough, 2 Swans. 145; Bainbridge v. Blair, 3 Beav. 423. All of the creditors are entitled to share equally in the assets.-- Todd v. Lee, 15 Wis. 385; Beverly v. Brooke, 4 Gratt. 187; Atlas Bank v. Nahant Bank, 3 Metc. 581; Owens v. Dickinson, 1 Cr. & Ph. 48; Strike v. McDonald, 2 Har. & G. 232.

JAMES E. WITHROW and PHILLIPS & STEWART, for intervening creditors: A court of equity having jurisdiction for any purpose will retain the cause and decide the whole case upon its merits.-- Keaton v. Spradling, 13 Mo. 321; Corby v. Bean, 44 Mo. 381; Real Estate v. Callonius, 63 Mo. 295 When the fund is impounded, the creditors should be paid pari passu.-- Todd v. Lee, 16 Wis. 508. The appointment of a receiver gives no advantage or priority to him at whose instance it is made over other creditors.-- Beverly v. Brooke, 4 Gratt. 187; Ellis v. Railroad Co., 107 Mass. 1.

BAKEWELL, J., delivered the opinion of the court.

Heiman & Wall filed a petition alleging that Alice C. Fisher, with her husband's assent, carried on business as a sole trader in millinery goods, all the property in the store in which she carried on her business, being her separate property; that Mrs. Fisher, on the faith of this separate estate, purchased for her business, goods of the plaintiff, for which she executed her note, on which $700 is due; that the debt so created is a charge upon the estate; that, by reckless management and fraudulent concealment of the proceeds of the sales, the stock has been reduced in value, in the three months preceding the filing of the petition, from $10,000 to $3,000; and that defendant has conveyed, assigned, and concealed her property to defraud her creditors, and is about to do so. The bill is filed on behalf of plaintiffs alone The prayer is for an injunction restraining defendant from further dealing with the property in her store, and for a receiver.

A preliminary injunction was granted on plaintiffs giving bond. The receiver was appointed, and, under orders of the court, he sold the property at public sale. The net proceeds are about $1,000.

After defendant had filed an answer which admits the allegations of the petition, other simple contract creditors, whose claims together come to nearly $10,000, were permitted to intervene. They pray that their claims may be allowed pro rata with that of plaintiffs.

Muller & Heath had begun proceedings to charge this same property of Mrs. Fisher for their bill against her for millinery furnished to her by them. They obtained judgment after the receiver was appointed in the present case, and were permitted to intervene. They, however, assume no position antagonistic to Heiman & Wall; but join in the appeal. It is not necessary to state more particularly the nature of their claim to the fund.

To the intervening petitions of the creditors at large, plaintiffs demurred. The demurrer was overruled. The cause was referred, with directions to determine the amounts due on each claim. After the report of the referee and the submission of the cause, a decree was entered directing the receiver, after paying costs and expenses, to distribute the balance ratably between plaintiffs and the intervening creditors.

The effect of this decree is to leave to plaintiffs only a small percentage. They contend that, by their diligence, they have secured a priority.

It is argued that a married woman does not, by contracting debts, create any special relation between her creditors and her property, as by charging it, or create a trust-fund out of it; that the relation of a married woman to her creditor is that of an ordinary debtor; that there is nothing in the nature of the obligations of a married woman, not incident to ordinary simple contract debts, which can be held to give to her creditors a fixed determinate right to an equal satisfaction out of her separate estate, and that plaintiffs, on account of their diligence, are, under the circumstances of this case, entitled to be paid in full before anything is received by the intervening creditors who had not commenced suit.

By statute, in Missouri, the personal property belonging to a woman at her marriage, or which she acquires during coverture, is legally hers. Alt v. Meyer, 8 Mo. App. 198. And, as we have repeatedly said, the contract of a married woman creates no lien upon her separate property. For reasons peculiar to the common law, however, a judgment directly against a married woman is not permitted. Coverture creates a disability; and, though the married woman has property of her own, it would be entirely beyond the reach of her creditors, but for the relief afforded in equity. During coverture, the equitable remedy is the only one. In order that the obligations of the feme covert may be enforced, equity regards her as a feme sole, and lends the aid of its peculiar processes that the creditor may not be without a remedy. Hooton v. Ransom, 6 Mo. App. 20; Staley v. Howard, 7 Mo. App. 381.

Legal assets are such as constitute the fund for the payment of debts according to their legal priority. Equitable assets are such as...