McKeldin v. Gouldy

• Decision Date: 28 September 1892
• Citation: 20 S.W. 231
• Parties: McKELDIN <I>et al.</I> v. GOULDY <I>et al.</I>
• Court: Tennessee Supreme Court

Page 231

20 S.W. 231

McKELDIN et al. v. GOULDY et al.

Supreme Court of Tennessee.

September 28, 1892.

Appeal from chancery court, McMinn county; T. M. McCONNELL, Chancellor.

Bill in equity by McKeldin & Nixon against J. S. Gouldy and others to subject a certain interest of defendants to the satisfaction of complainants' demand. Decree for defendants. Complainants appeal. Affirmed.

Burkett, Miller & Turley, for appellants. Harbison & Roberts, for appellees.

LURTON, J.

This is a bill in equity. The question presented is as to whether a court of equity has jurisdiction to aid a creditor at large, holding a legal demand, to reach and subject to the satisfaction of his claim an equitable interest not leviable at law, there being no trust, fraud, or lien, when such interposition is sought alone upon the allegation that the debtor is insolvent, and that nothing can be made out of him at law. The original jurisdiction of courts of equity to aid a creditor holding a legal demand was limited to those cases in which there was some element of fraud affecting the remedy at law as to assets subject to execution but for the interposition of fraud, and to those cases where there was some element of trust peculiarly entitling the creditor to subject a specific asset to the satisfaction of his demand. But, where neither trust nor fraud appeared, such courts had no jurisdiction to aid such a creditor, even though he had exhausted his remedy at law. Erwin v. Oldham, 6 Yerg. 186; Ewing v. Cantrell, Meigs, 364; Jourolmon v. Massengill, 86 Tenn. 119, 5 S. W. Rep. 719; Porter v. Lee, 88 Tenn. 791, 14 S. W. Rep. 218. To remedy this defect, our act of 1832 was enacted. Its provisions now constitute sections 5026-5030, inclusive, in Mill. & V. Code. Under section 5026, the creditor whose execution had been returned unsatisfied may file his bill in equity to compel the discovery of any property belonging to his debtor, including stocks, choses in action, or money due. Under the next section, the court is given power to prevent the transfer, payment, or delivery of such property, and to subject same to the satisfaction of the creditor, whether such property was subject to execution or not. By 5030, a remedy in equity is given (1) in all cases where personal service of persons cannot be made at law, and where no original attachment at law will lie, and no judgment at law can be obtained; (2) in cases where the demand is purely of an equitable nature. The complainants are not judgment creditors. They are not, therefore, within the provisions of 5026. Judgment at law could have been had. They are not, therefore, within section 5030. By the act of 1851-52, carried into the Code as sections 5031-5038, both inclusive, (Mill. & V. Code,) a creditor without judgment may file his bill in equity to set aside fraudulent conveyances, and to subject the property to the satisfaction of his demand. Complainants do not allege any fraud, and they are therefore not within the provisions of this statute.

It is very obvious that the statutes enlarging the power of courts of equity to aid a creditor by subjecting to the satisfaction of his demand an equitable interest do not extend to a case where such creditor is not a judgment creditor, nor a creditor at large seeking to set aside a fraudulent conveyance, nor a creditor whose demand is secured by lien, nor a creditor asserting some character of trust in the property he seeks to appropriate. In equity no one was a creditor, or recognized as such, until he had first obtained a judgment at...