Jones v. Davenport

• Decision Date: 23 April 1889
• Citation: 17 A. 570,45 N.J.E. 77
• Parties: JONES v. DAVENPORT.
• Court: New Jersey Court of Chancery

17 A. 570

45 N.J.E. 77

JONES

v. DAVENPORT.

Court of Chancery of New Jersey.

April 23, 1889.

(Syllabus by the Court.)

On application for leave to amend bill, and to enter a new final decree. See 13 Atl. Rep. 652.

Charles A. Reed and R. F. Lindabury, for applicant. Edward M. Collie and Thomas N. McCarter, contra.

VAN FLEET, V. C. This suit, together with two others, namely, Daniel B. Foyerweather and others against Maria Davenport, and the First National Bank of Somerville against the same defendant, were heard together by arrangement of counsel, but not consolidated. They were all decided by a single opinion, which will be found reported in 44 N. J. Esq. 33, 13 Atl. Rep. 652. The design of all three of the suits was to reach certain property, which it was alleged the husband of the defendant transferred to her, in fraud of his creditors, shortly before his death. The bill in this case assailed the validity of certain conveyances of land, but contained no charge of fraud in respect to the transfer of personal property, which was sufficient, if it had been admitted to be true, to have entitled the complainant to a decree. The bills in the other two cases stood on a broader foundation. They charged, not only that the deeds mentioned in the bill in this case were fraudulent, but also that 100 shares of the capital stock of the First National Bank of Jersey City had been transferred to the defendant in fraud of creditors. The bill in this case does allege that personal property had been fraudulently transferred to the defendant, but in a form as vague and uncertain as to lay no foundation for a decree. This is what the bill says on that subject: "The said James S. Davenport was also, in his life-time, possessed of sundry railroad stocks, bonds, and other personal securities, to an amount exceeding $20,000, which, after the said firm of Davenport Bros. became embarrassed, he transferred to Maria Davenport. Your orator charges that the said transfer was fraudulent and void as against your orator and the other creditors of Davenport Bros., and that said securities, and the proceeds thereof, are held by the said Maria Davenport in trust for your orator and the other creditors of Davenport Bros." This averment, it will be observed, lacks almost every essential requisite, by the rules of pleading, in stating a case of fraud. The property transferred is alleged to have consisted "of sundry railroad stocks, bonds, and other personal securities." The stocks and bonds of what railroad? How many shares of stock and how many bonds? What is meant by personal securities? When were the transfers made? On all these subjects the defendant was entitled to certain and definite information before she could be required to answer and it was also necessary that the court should have like information before it commenced the hearing of the cause. The transfers are also charged to have been made fraudulently, and for that reason to be void against the complainant. But why? Were they voluntary, or made for an insufficient consideration, or made for a full consideration, but with design on the part of the transferee to assist the debtor in placing his property beyond the reach of his creditors? Without the facts necessary to answer these questions appearing in the bill, it would not be possible for the court to see whether the act, which the complainant denounced as fraudulent, was so or not. All that the bill now says is that the transfer was fraudulent, without, however, telling how or why. A conclusion or an opinion is simply averred, without giving the facts on which it is founded. This amounts to nothing at all as a pleading. The rights of the parties, in every litigation, must be adjudged according to the facts of the case, as they shall be made to appear; and, in order that the court may ascertain what they are, it is necessary that they should be plainly and distinctly alleged by one party, and either admitted or denied by the other.

Although the proofs offered on the hearing were sufficient to convince the court that the transfer of the 100 shares of bank-stock had been made in fraud of creditors, the court declined to make a decree in this suit awarding relief on that ground, for the reason that the bill contained no averment which would support such a decree. A decree was accordingly made in this suit, setting aside certain conveyances of land, and in the other two cases setting aside the same conveyances, and also the transfer of the bank-stock. And as it had been proved on the hearing that the defendant had sold the bank-stock shortly after its transfer to her, for $18,000, it was adjudged that the complainants in the other two cases were entitled to recover that sum of her, or so much thereof as should be necessary to pay and satisfy their debts, and writs of execution for that purpose were awarded. Decrees in favor of the first National Bank of Somerville and of Daniel B. Fairweather and others were entered on the 16th day of April, 1888, and the decree in this case was made on the 1st of May, 1888. Executions on all three of the decrees were subsequently issued, under which the lands, adjudged by the decrees to have been conveyed in fraud of creditors, were sold. The money thus raised was paid to the First National Bank of Somerville, and to the complainant in this suit, under an order of the court made in June, 1888, pursuant to the consent of the solicitors of the complainants in the three cases. On the 14th day of August, 1888, an amended final decree, dated on the 16th day of April, 1888, adjudging that the transfer of the bank-stock was fraudulent as to the complainant, and also as to another person, who, by an order made by consent, had been admitted as a complainant in June, 1887, was entered in this suit on the consent of the solicitors of the parties to this suit, but without examination or consideration by the court, and also without any change in or amendment of the bill. The amended decree has since been declared by the court to have been irregularly entered. There can be no doubt that that decree was an absolute nullity. The principle is authoritatively settled, that a decree or judgment, on a matter outside of the issue raised by the pleadings, is a nullity, and is nowhere entitled to the least respect as a judicial sentence. Munday v. Vail, 34 N. J. Law, 418; Reynolds v. Stockton, 43 N. J. Eq. 211, 10 Atl. Rep. 385.

Now, after this cause has been finally heard on all the issues raised by the pleadings, and decided, and the final decree made thereon has been fully executed, by a sale of all the lands in respect to which the complainant was given relief, and distribution of the proceeds made, the complainant asks leave to amend his bill. now as of the 27th of October, 1885, by adding to its premises such averments as will entitle him to a decree, giving him the same relief in respect to the bank stock that was awarded to the complainants in the other two causes; and he also asks that, after such amendment shall have been made, an order be made confirming and establishing the amended final decree which was filed on the 14th day of August, 1886. To me this appears to be a start-kingly novel application. Stated plainly, it amounts to this: The court is asked, after it has heard and finally decided a cause, and alter its judgment has been fully carried into effect, though the complainant has not received all the money from the defendant which by the decree he is entitled to, to open the cause and let the complainant make a new case against the defendant, or allege a new ground for relief, as of a date long antecedent to the final determination of the cause, and then attempt by an order, founded on nothing but the defendant's consent, to impart legal efficacy to a decree which was when it was made, and still is, an absolute nullity. It is not possible for me to imagine any state of circumstances or condition of facts which would justify or make it safe or proper to grant such an application.

The great purpose intended to be accomplished by a final decree in an equity suit is to settle and determine, justly and finally, the rights of all persons having a material interest in the subject-matter put forward by the complainant in his bill of complaint as the foundation of his right to relief; and for this reason it is a leading rule of equity procedure that all persons materially interested, either legally or beneficially, in the object of the suit, shall be made parties to it, to the end that full and complete justice may be done to all, in respect to the particular subject-matter of the litigation, and that all further litigation concerning such subject-matter may be prevented. "It is the constant aim of courts of equity," says Judge Story, "to do complete justice, by deciding upon and settling the rights of all persons interested in the subject-matter of the suit, so that the performance of the decree may be perfectly safe to those who are compelled to obey it, and also that future litigation may be prevented." Story, Eq. Pl. § 72. Final decrees in equity have, in consequence, from a very early date been held, so far as the power of the courts making them was concerned, to be unalterable in any material respect, not covered by the judgment in the particular case, except the alteration is sought by bill of review or a rehearing. Lord...