Overmire v. Haworth
| Decision Date | 08 February 1892 |
| Citation | 51 N.W. 121,48 Minn. 372 |
| Parties | Silas Overmire v. Julia A. Haworth |
| Court | Minnesota Supreme Court |
November 16, 1891, Submitted on Briefs
Appeal by defendant, Julia A. Haworth, from a judgment of the district court of Hennepin county, Lochren, J., entered March 12, 1891.
The plaintiff, Silas Overmire, of Minneapolis, was employed by Lysander L. Haworth, of Illinois, in March, 1889, to trade $ 6,000 of stock in an Illinois coal company for real estate in Minneapolis. He made a trade with one Rogers, and by direction of Haworth had the lots he took in exchange for the stock deeded to his wife, the defendant, Julia A. Haworth. For his services in negotiating the exchange plaintiff charged his employer, Lysander L. Haworth, $ 600. Haworth was insolvent, and had no other property in this state. The lots were deeded to his wife to hinder, delay, and defraud his creditors. Plaintiff by this action asked that it might be adjudged that Lysander L. Haworth is indebted to him $ 600 and interest, and that the debt is a lien upon the lots, and that they be sold to satisfy this debt and costs; claiming that a trust resulted in favor of him, a creditor, when the husband paid the consideration, but had the grant made to his wife. 1878 G. S. ch. 43, §§ 7, 8.
The action was tried February 4, 1891, without a jury, and findings were made and judgment entered for the plaintiff substantially as asked in the complaint. The defendant appealed.
Judgment affirmed.
C. L Smith and Brooks & Hendrix, for appellant.
Plaintiff by this action seeks to enforce the trust declared to exist in favor of creditors by 1878 G. S. ch. 43, §§ 7 8. He is a mere creditor at large. His debt has never been ascertained or determined by judgment. No judgment existing against the alleged debtor, it follows, of course, that no execution has or could be issued against him. The alleged debtor is not made a party to the action, or given any opportunity to disprove the debt or fraud charged against him; and the action is not brought for the benefit of all creditors, or to remove any obstacle impeding the enforcement of any lien which plaintiff has upon this property. Under the facts found by the court, plaintiff is not entitled to the relief decreed him by this judgment.
Except for section eight (8) of the statute in question, plaintiff could not proceed against this property. When he seeks to avail himself of the remedy which that section affords, he must comply with the conditions imposed by law. An essential prerequisite is a recovery of a judgment against the debtor. Estes v. Wilcox, 67 N.Y. 264; Allyn v. Thurston, 53 N.Y. 622.
In Massey v. Gorton, 12 Minn. 145, (Gil. 83,) plaintiff, a mere creditor at large, sought to enforce in his favor a resulting trust under an averment that the debtor was wholly insolvent; but the court refused.
On the other hand, in Moffatt v. Tuttle, 35 Minn. 301, it is decided that a judgment creditor may maintain the action upon the mere showing that the judgment debtor is insolvent, and has no property subject to execution. In other words, insolvency of the debtor may render it unnecessary to issue execution, but does not dispense with or lessen the necessity for the recovery of a judgment at law.
But it is claimed that the nonresidence of the alleged debtor and the fact that he has no property within this state make this case an exception to general rules. As evidence of debt, the judgment of a sister state is conclusive. Such a judgment fulfills the requirements of the rule that the debt shall be first ascertained, established, and determined by an action at law. It may be ineffectual as a remedy, but it is conclusive as an adjudication. McCartney v. Bostwick, 32 N.Y. 53; Smitherman v. Allen, 6 Jones, Eq. 17; Reese v. Bradford, 13 Ala. 837; Smith v. Moore, 35 Ala. 76; Ballou v. Jones, 13 Hun, 629.
Hahn & Hawley, for respondent.
This is not an action to establish the indebtedness against L. L. Haworth, neither is it an action to set aside the deed given to his wife as fraudulent, but is brought for the sole and only purpose of enforcing a resulting trust created by 1878 G. S. ch. 43, § 8. He has, and can have, no interest in the determination of this case. The questions involved arise only between the trustee and cestui que trust. He has and can have no interest in the property sought to be reached. It is the defendant's property absolutely, except so far as it may be charged with a resulting trust in favor of Haworth's creditors, and then only to the extent that may be necessary to satisfy their just demands.
The sole controversy is between the grantee in the deed and the creditor. It is the grantee's property which is proposed to be taken by virtue of the trust, which exists solely for the creditor's benefit. In seeking to enforce that trust the creditor must establish, by original evidence, not only the fact that the consideration for the conveyance was paid by the debtor, but the further fact that the plaintiff was the creditor of the party paying such consideration at the time the conveyance was made. On this point the judgment, if there was one, in favor of the plaintiff and against the debtor, would by no means conclude the grantee.
It is true that, as a general proposition, all legal remedies must be exhausted before resorting to a court of equity for relief. This rule can only mean, so far, at least, as a citizen of our own state is concerned, the exhaustion of his legal remedies in this state; and where it appears, as it does in this case, that there are no legal remedies here of any kind, the court should not require the plaintiff to do something which he cannot do here before lending him its aid. This is a very different case from that of a creditors' bill to set aside a deed. The distinction between the two cases, as well as the plaintiff's right to maintain this action, is forcibly stated in the case of McCartney v. Bostwick, 32 N.Y. 53.
Where the debtor is a nonresident, the courts will not require the obtaining of judgment or the issuance of an execution before a bill can be maintained to reach his property. Scott v. McMillen, 1 Litt. (Ky.) 302; Kipper v. Glancey, 2 Blackf. 356; Peay v. Morrison, 10 Grat. 149; Pendleton v. Perkins, 49 Mo. 565; Catchings v. Manlove, 39 Miss. 655; Kinloch v. Meyer, 1 Speer, Eq. 427; Farrar v. Haselden, 9 Rich. Eq. 331; Merchants' Nat. Bank v. Paine, 13 R. I. 592. [*]
This action is prosecuted to enforce a resulting trust, under 1878 G. S. ch. 43, §§ 7, 8, as respects certain land in this state, which upon purchase were conveyed to the defendant, her husband, one L. L. Haworth, having paid the whole consideration therefor. The plaintiff is a simple contract creditor of L. L. Haworth, who resided in the state of Illinois when the debt was contracted, and who ever since has resided there. The said debtor, Haworth, has never owned any property within this state. He procured the conveyance of the land in question to be made to the defendant, his wife, with intent to defraud his creditors, including the plaintiff. It does not appear whether the debtor, Haworth, is solvent or insolvent. By the terms of the statute above cited a trust in the land results in favor of the creditors of the person paying the consideration "to the extent that may be necessary to satisfy their just demands." In Massey v. Gorton, 12...
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