Ladd v. Judson

• Decision Date: 24 October 1898
• Citation: 174 Ill. 344,51 N.E. 838
• Parties: LADD et al. v. JUDSON et al.
• Court: Illinois Supreme Court

174 Ill. 344

51 N.E. 838

LADD et al.

v.JUDSON et al.

Supreme Court of Illinois.

Oct. 24, 1898.

Appeal from appellate court, Third district.

Bill by William Ladd and another against Thomas P. Judson and others. The decree of the circuit court sustaining a demurrer to, and dismissing, the bill was affirmed by the appellate court (71 Ill. App. 283); and plaintiffs appeal. Affirmed.

Phillips, J., dissenting.

Howett & Jett, for appellants.

J. M. Truitt, for appellees.

This is a bill in equity in the nature of a creditors' bill, by appellants, against appellees, filed in the Montgomery circuit court. It alleges that complainants obtained a decree of foreclosure in the circuit court of Josephine county, Or., against defendants Thomas P. and Jennie H. Judson, on a note and mortgage executed by them for $1,121.45; that certain mortgaged property was sold under that decree, and the proceeds applied thereon, but was insufficient to fully pay the same, leaving a balance of $981.11; that Solomon Harkey, the father of defendant Jennie H. Judson, died testate, leaving a large amount of real and personal property in Montgomery county, Ill., which he willed to the defendant Alexander A. Cress, as executor, in trust, to sell and convert into money, and then divide the proceeds equally among his several children, including the said Jennie H. Judson; that there is now remaining in the hands of said trustee under said will, and undisposed of, certain real estate described, containing about 320 acres, in Montgomery county, Ill.; that the judgment referred to in this bill was regularly obtained against the defendants in the circuit court of Josephine county, Or., personal service having been had upon them, and that the Judsons are insolvent and nonresidents of the state of Illinois; that the funds sought to be reached to satisfy this debt are within the jurisdiction of this court; and that there is no way in law by which the said property rights and interests held in trust by the said Alexander A. Cress for the defendant Jennie H. Judson can be reached; and that there is no other property of any kind or character in the state of Illinois, owned by the defendants, which can be reached by attachment or otherwise; and that complainants have no remedy at law. The bill alleges generally, upon information, that the trustee has control of notes, accounts, choses in action, etc., which he holds in trust for the defendants under the terms and conditions of the will aforesaid, and prays discovery; that said T. P. Judson and Jennie H. Judson have refused to pay the amount due the complainants, or to apply thereon the equitable interest which is held in trust for them by the said trustee, all of which is contrary to equity and good conscience; that by reason of said defendants being nonresidents of the state of Illinois, and keeping themselves out of the jurisdiction of the courts, complainants have been unable to obtain judgment in Illinois against the Judsons. The bill prays answer not under oath, and especially that the said Alexander A. Cress may be required to inform the court as to the amounts and value of all property, interests, and effects held by him in trust for the use of T. P. Judson and Jennie H. Judson, whereby complainants' debt could be satisfied, and that the Judsons may be decreed to pay to complainants the amount heretofore named, with interest; that the executor or trustee may be required, if on hearing he is found to hold real estate for the use of the Judsons, to sell or dispose of it, or so much of it as may be found necessary to satisfy complainants' debt; and that he may turn out other property and property rights towards the payment of the said indebtedness; and that complainants may be declared to have a lien upon all property owned or held by the said Cress in which the Judsons are interested.

A copy of the will making such devise was attached to and made a part of the bill. Item 4 is as follows: ‘I will and devise to my executor or executors hereinafter named or described all my real estate, including all that devised to my wif for life, but, subject to that devise for life to her, in trust for the following purposes or objects: First, that he may sell said real estate, and convert the same into money; and, as I don't wish my said real estate sacrificed, I hereby authorize and empower my executor or executors to sell the whole or any part or any parcel thereof, and convey the same, when sold, on such terms and at such times as he may deem for the best interest of my estate. He is expressly authorized to use his discretion in selling any and all real estate, and make the sales thereof privately or publicly, as shall seem to him best for my estate. Secondly, the rents and profits of said estate, except so much thereof as shall be necessary to make such repairs as are needful to keep the improved parts of said real estate from deteriorating in value and pay the taxes on my entire real estate, including that in which my wife has a life estate, together with the proceeds of said real estate, shall be divided into seven equal parts,-that is, after the costs and expenses of my said real estate have been paid,-and one-seventh part thereof shall be paid as follows: To my sons William P. Harkey, Jacob M. Harkey, and Solomon S. Harkey; and one-seventh part each to my daughters Sarah C. Wilton and Jennie H. Judson; one-seventh part to my granddaughter Martha J. Blackburn; one-seventh part thereof to the children of my deceased son or the survivor of them, viz, Ida Harkey and Ella Lee Harkey, one-seventh part thereof.’ Publication was made as to the defendants Judson, and personal service had on Alexander A. Cress. He appeared, and filed a general and special demurrer to the bill, alleging for special cause that it did not show that the complainants had recovered a judgment at law on their claim. This demurrer was sustained, and, complainants declining to amend, the bill was dismissed at their cost. To reverse that order, they appealed to the appellate court for the Third district; but the decree of the circuit court was affirmed, and they now prosecute this further appeal.

WILKIN, J. (after stating the facts).

The principal question raised and discussed on this record is whether the failure of complainants below to obtain a judgment at law against the defendants Judson in this state is, on the facts alleged, fatal to their bill. That a judgment at law and execution thereon, with a return of nulla bona, are prerequisites to the maintenance of a creditors' bill proper, has never been questioned. Our statute expressly so provides. A bill in the nature of a creditors' bill, the object of which is to remove a fraudulnt incumbrance or other obstruction out of the way of a levy and sale under an execution, may be filed immediately upon obtaining judgment. The judgment is, however, no less essential in such a case than that of a simple creditors' bill. The reason frequently given for requiring such judgment at law in both classes of cases is that to allow a complainant to establish his claim in the first instance in a court of chancery would be to deprive the defendant of the right of trial by jury. It is also well settled that the judgment at law necessary to give the court jurisdiction in such cases must be a judgment in the jurisdiction where the bill is filed. Winslow v. Leland, 128 Ill. 304, 21 N. E. 588, citing Steere v. Hoagland, 39 Ill. 264.

But counsel for appellants insist that there is a third class of cases in which a creditor may maintain a bill in equity for the satisfaction of his debt,-that is, where he seeks to reach property or funds accessible only by the aid of a court of chancery,-and that in such cases no judgment at law is necessary. Expressions are referred to in some early decisions of this court which give support to this contention. Greenway v. Thomas, 14 Ill. 271;Miller v. Davidson, 3 Gilman, 518;Getzler v. Saroni, 18 Ill. 511. But it has never been decided in this state that the mere fact that assets of a debtor out of which satisfaction is sought can only be reached through a court of equity will give that court jurisdiction, in the absence of a judgment at law; and the uniform holding that, in bills of the second class above mentioned, such a judgment must be averred and proved, is irreconcilable with any such decision. If a case can arise in which relief may be sought in equity in the first instance, it must appear that the complainant's demand is of such an equitable in a acter that it can only be established in a court of chancery; otherwise, the right of the defendant to a trial by jury upon a legal claim would be taken away, and the reason for the rule, as above stated, destroyed. And so we said in Dormueil v. Ward, 108 Ill. 216, where it was insisted that the case came within an exception to the general rule requiring a judgment (page 219): ‘These so-called exceptions, when properly understood, are rather nominal than real, for a bill of this character will not lie in any case where the claim, as it is here, is a purely legal demand. In all cases where such a bill has been maintained, the claim of the complainant has had some equitable element in it,-such as a trust, or the like. But, in the absence of some element of this character, there is a want of jurisdiction to adjudicate upon the claim at all; and it is upon this fundamental doctrine the rule controlling this class of cases rests. When, however, a judgment has been obtained, and an execution has been returned nulla bona, and it can be shown the defendant has equitable assets which cannot be reached by execution, or that he, or others acting in concert with him, have fraudulently placed obstructions in the way of collecting the claim by execution, a case will then be made out for the interposition of a court of equity. The jurisdiction of the court thus invoked is known as a part of the auxiliary jurisdiction of a...