Millard v. Parsell

• Decision Date: 08 December 1898
• Citation: 77 N.W. 390,57 Neb. 178
• Parties: MILLARD v. PARSELL ET AL.
• Court: Nebraska Supreme Court

57 Neb. 178

77 N.W. 390

MILLARD

v.PARSELL ET AL.

Supreme Court of Nebraska.

Dec. 8, 1898.

Syllabus by the Court.

1. When the legal estates of a judgment debtor have been exhausted, a petition in the nature of a creditors' bill will lie in order to subject to payment of the judgment land in which his estate is equitable only, and which could not be reached on execution, or, if reached, could not be sold to advantage because of the clouded condition of the title.

2. Evidence examined, and held to sustain a finding for the plaintiff in a creditors' suit.

3. Matters which, if available at all, might have been urged in defense to an application for a deficiency judgment, cannot be urged in defense of a creditors' suit to enforce such judgment.

4. An order that, after exhausting the remedy against the principal debtor, the creditor may apply for and obtain a judgment against a guarantor of collection, is not final, and therefore not appealable.

Appeal from district court, Douglas county; Ambrose, Judge.

Action by Joseph H. Millard against George H. Parsell and others. Judgment for plaintiff, and defendants appeal. Appeal of defendants Ballou dismissed, and decree affirmed.W. H. De France, Silas Cobb, Otis H. Ballou, and Henry A. Drumm, for appellants.

L. F. Crofoot, for appellee.

IRVINE, C.

In 1887, Dr. George H. Parsell was the owner of lot 3, in block 78, in the city of Omaha, and June 11th of that year he made to O. H. and E. G. Ballou his note for $13,125, secured by mortgage on said lot. In 1889 the Ballous sold the note and mortgage to J. H. Millard, who is throughout the proceedings described as trustee, the nature of the trust not being disclosed and being immaterial. The Ballous at the same time guarantied the collection of the note. In 1890, Dr. Parsell conveyed the property to E. B. Chapman. In 1891, Millard began foreclosure proceedings, which resulted in a sale of the property and a judgment against Dr. Parsell for a deficiency of about $2,800. Certain other property of Dr. Parsell having been sold on execution for a nominal sum, the present case was begun.

The petition is multifarious, but its principal object was to subject to the satisfaction of the judgment a tract of 80 acres in Douglas county, which had been by Chapman conveyed to Mrs. Parsell at the time lot 3 was conveyed to Chapman, and which Mrs. Parsell had afterwards conveyed to Horatio Fowkes. The petition charges that the conveyance of this land from Chapman to Mrs. Parsell was for the purpose of defrauding Dr. Parsell's creditors; also that the consideration was the conveyance of lot 3 to Chapman, and moved entirely from Dr. Parsell, who became the equitable owner of the 80-acre tract. It was further alleged that the conveyance to Fowkes was colorable only, and made to defraud Dr. Parsell's creditors. Certain other instruments are incidentally attacked, but they are so connected with those mentioned that all must stand or fall together, and it is useless to complicate the opinion by specific reference thereto. Issue having been joined on these averments, the court found that the conveyance of the land to Mrs. Parsell was not made for the purpose of defrauding creditors, but that it was made in trust for Dr. Parsell, and that he was the equitable owner. The court further found that the conveyance from Mrs. Parsell to Fowkes was made for the purpose of defrauding Dr. Parsell's creditors, and that Fowkes knew of such purpose. The plaintiff, therefore, had a decree. Mrs. Parsell having died, her heirs were parties, and they, together with Dr. Parsell and Fowkes, appeal.

Without reviewing the evidence in detail, it is sufficient to say that it supports the finding that the consideration for the transfer of the property to Mrs. Parsell was the conveyance of lot 3 to Chapman; that there was at least a resulting trust to Dr. Parsell; and that the land was in equity his. It is contended that a creditors' bill will not lie on this ground; that a fraudulent intent must be shown, which here did not exist. But counsel overlook the rule that equitable as well as legal estates are subject to the payment of debts, and that when the estate is equitable only, and a sale on execution would pass no title, or a title so clouded as to discourage bids, a petition in the nature of a bill in equity is the appropriate, and often the necessary, procedure. Hoagland v. Wilson, 15 Neb. 320, 18 N. W....