Hagan v. Walker - 55 U.S. 29 (1852)
U.S. Supreme Court
Hagan v. Walker, 55 U.S. 14 How. 29 29 (1852)
Hagan v. Walker
55 U.S. (14 How.) 29
A court of equity has jurisdiction of a bill against the administrator of a deceased debtor and a person to whom real and personal property was conveyed by the deceased debtor for the purpose of defrauding creditors.
In such a case, the court does not exercise an auxiliary jurisdiction to aid legal process, and consequently it is not necessary that the creditor should be in a condition to levy an execution if the fraudulent obstacle should be removed.
It is proper to make a prior encumbrancer who holds the legal title a party to the bill, in order that the whole title may be sold under the decree; for the purpose of such a decree, the prior encumbrancer is a necessary party; but the court may order a sale subject to the encumbrance without having the prior encumbrancer before it, and in fit cases it will do so.
If the prior encumbrancer is out of the jurisdiction or cannot be joined without defeating it, it is a fit cause to dispense with his presence and order a sale subject to his encumbrance, which will not be affected by the decree.
The bill was originally filed in the names of John Hagan, of New Orleans and a citizen of the State of Louisiana, and Thomas Barrett, of New Orleans, and a citizen of the State of Louisiana, formerly commission merchants and partners, trading under the firm, name, and style of John Hagan & Co., complainants, against William H. Pope, of Huntsville, and a citizen of the State of Alabama, Samuel Breck, of Huntsville, and a citizen of the State of Alabama, the said Breck being the administrator of the estate of Leroy Pope, who in his lifetime resided in Huntsville and was a citizen of the State of Alabama, and Charles B. Penrose, of Washington City and a citizen of the District of Columbia and successor in office of Virgil Maxcy, who in his lifetime resided in Washington City, and was a citizen of the District of Columbia, and Solicitor of the Treasury of the United States.
The suit was commenced in February, 1846. The plaintiffs were judgment creditors of Leroy Pope by a judgment rendered in April, 1834, upon which an execution in October, 1834, was returned "No property found."
The plaintiffs sought to obtain satisfaction of this judgment from property which they allege the said Leroy Pope conveyed fraudulently to his son William H. Pope, the defendant.
This property was conveyed, March, 1834, by Leroy Pope to
William H. Pope, and upon considerations which the plaintiffs alleged to be colorable and inadequate.
The property thus conveyed was charged to have been the whole estate of the said Leroy, and William H. Pope was charged to have been, before that time, without property, and to have had no means of payment for this.
The plaintiffs alleged that the property was never delivered to the "exclusive possession" of William H. Pope, but "remained as much in the possession of the said Leroy as the said William, and that the said Leroy and William enjoyed the proceeds and profits jointly."
They alleged that William H. Pope, in March, 1834, conveyed the land and slaves to the Solicitor of the Treasury in mortgage to secure a debt due to the United States by the said Leroy Pope of $29,290.90, which William H. Pope at that date assumed, and for which he gave his notes, and that at the same date he guaranteed to the United States a debt of $20,000, for which other security had been given to the United States by Leroy Pope.
They averred that the $20,000 thus mentioned was paid from the securities deposited by Leroy Pope, and that the only debt really incurred by William H. Pope was that for $29,290.90. This debt the plaintiffs admitted to be a charge on the property, and they did not contest it. They charged, however, that the securities to the Solicitor of the Treasury were designed by the grantor William H. Pope as a fraud upon the creditors of Leroy Pope.
The death of Leroy Pope was alleged to have occurred in 1844 and the appointment of Breck as administrator in 1844.
The prayer of the bill was that the conveyances of Leroy and William H. Pope should be declared null. That, after satisfying the debt of the United States, the remainder of the property should be appropriated to satisfy the debt of the plaintiffs. Process was prayed against William H. Pope and Samuel Breck, administrators of Leroy Pope, and the Solicitor of the Treasury, Penrose, a citizen of the District of Columbia.
The defendants, Breck and Pope, demurred to the bill; the demurrer was allowed by the district court, and the bill was dismissed.
An appeal from this decree of dismissal brought the case up to this Court.