1. A. filed his bill claiming that he, as a creditor of a
commercial firm all the members of which were insolvent, had a
prior lien or privilege upon the partnership property which had
been transferred by them in payment of their individual debts, and
seeking to subject that property to the payment of his debt. The
bill, on a final hearing upon the pleadings and proofs, was
dismissed. A. thereupon commenced a suit for the same cause of
action against the same parties alleging, in addition to the
matters set forth in his former bill, that he had recovered a
judgment at law against the partnership for the debt, and that an
execution issued thereon had been returned
nulls bona. Held
that the former decree is as
a bar to the suit.
2. Whenever a creditor has a trust in his favor, or a lien upon
property for the debt due him, he may go into equity without
exhausting his remedy at law.
The facts out of which this case arises are stated in Case
v. Beauregard, 99 U. S. 119
bill in each case is in every essential particular the same, except
that here the additional allegation is made that the complainant,
as receiver, had brought an action at law and recovered judgment
against Beauregard and May, as partners; that Graham, the other
partner, was beyond the reach of process; and that an execution
upon the judgment was returned nulla bona.
Page 101 U. S. 689
the decree in the former suit in bar, and the court, finding
that the matter set up in the plea was sustained by the evidence,
dismissed the bill. Case appealed.
MR. JUSTICE STRONG delivered the opinion of the Court.
That the complainant's bill exhibits the same cause of action
which was set forth in his former bill against these defendants,
and that he now seeks the same relief as that which was sought in
his first suit, is quite apparent. The identity of the claims and
equities asserted, as well as of the relief asked, is shown by an
inspection of the records, and it is hardly denied. The object of
both suits was to follow and subject to the payment of a debt due
by the partnership of May, Graham, & Beauregard to the First
National Bank of New Orleans, certain property alleged to have
formerly belonged to the partnership, but which before the first
bill was filed had been transferred to the railroad company. The
claim made in each of the cases is that the bank has a privilege or
lien upon the property for the partnership debt; that the railroad
company acquired the property with knowledge of the existence of
the lien, and that it is charged with a trust in favor of the bank.
The decree dismissing the former bill must therefore be a bar to
the present suit, it having been pleaded, unless the court which
dismissed it was without jurisdiction of the case.
In the former bill it was not averred that judgment at law had
ever been recovered against the partnership for the debt, and that
an execution had been issued thereon and returned fruitless. The
present bill contains such an averment. It is alleged that
judgments at law were obtained against two of the members of the
partnership on or about the twenty-sixth day of February, 1873,
which was after the decree dismissing the former bill, and that
executions issued upon those judgments had been returned that no
property could be found. The complainant insists that this averment
not having been made in the former bill, the decree of dismissal,
though unqualified, cannot be regarded as a final adjudication of
the equities between the parties, and that it is therefore no bar
to the present suit.
Page 101 U. S. 690
It is no doubt generally true that a creditor's bill to subject
his debtor's interests in property to the payment of the debt must
show that all remedy at law had been exhausted. And generally it
must be averred that judgment has been recovered for the debt; that
execution has been issued, and that it has been returned nulla
The reason is that until such a showing is made, it does
not appear in most cases that resort to a court of equity is
necessary, or in other words that the creditor is remediless at
law. In some cases also, such an averment is necessary to show that
the creditor has a lien upon the property he seeks to subject to
the payment of his demand. The rule is a familiar one that a court
of equity will not entertain a case for relief where the
complainant has an adequate legal remedy. The complaining party
must therefore show that he had done all that he could do at law to
obtain his rights.
But, after all, the judgment and fruitless execution are only
evidence that his legal remedies have been exhausted or that he is
without remedy at law. They are not the only possible means of
proof. The necessity of resort to a court of equity may be made
otherwise to appear. Accordingly, the rule, though general, is not
without many exceptions. Neither law nor equity requires a
meaningless form, "Bona, sed impossibilia non cogit lex.
It has been decided that where it appears by the bill that the
debtor is insolvent and that the issuing of an execution would be
of no practical utility, the issue of an execution is not a
necessary prerequisite to equitable interference. Turner v.
46 Mo. 95; Postlewait & Creagan and Keeler v.
3 Ia. 365; Ticonie Bank v. Harvey,
141; Botsford v. Beers,
11 Conn. 369;
Payne v. Sheldon,
63 Barb (N.Y.) 169. This is certainly
true where the creditor has a lien or a trust in his favor.
So it has been held that a creditor, without having first
obtained a judgment at law, may come into a court of equity to set
aside fraudulent conveyances of his debtor, made for the purpose of
hindering and delaying creditors, and to subject the property to
the payment of the debt due him. Thurmond and Others v.
3 Ga. 449; Cornell v. Radway,
22 Wis. 260;
Sanderson v. Stockdale,
11 Md. 563.
In Brisay v. Hogan,
53 Me. 554, it was ruled that when
Page 101 U. S. 691
creditor seeks by his bill to obtain payment of his debt from
land paid for by the debtor, but conveyed to his wife, a levy of an
execution is unnecessary, if the debtor never had legal title to
the land. See also Day v. Washburne,
24 How. 352.
The foundation upon which these and many other similar cases
rest is that judgments and fruitless executions are not necessary
to show that the creditor has no adequate legal remedy. When the
debtor's estate is a mere equitable one which cannot be reached by
any proceeding at law, there is no reason for requiring attempts to
reach it by legal processes.
But, without pursuing this subject further, it may be said that
whenever a creditor has a trust in his favor, or a lien upon
property for the debt due him, he may go into equity without
exhausting legal processes or remedies. Tappan v. Evans,
11 N.H. 311; Holt v. Bancroft,
30 Ala. 193. Indeed, in
those cases in which it has been held that obtaining a judgment and
issuing an execution are necessary before a court of equity can be
asked to set aside fraudulent dispositions of a debtor's property,
the reason given is that a general creditor has no lien. And when
such bills have been sustained without a judgment at law, it has
been to enable the creditor to obtain a lien, either by judgment or
execution. But when the bill asserts a lien or a trust and shows
that it can be made available only by the aid of a chancellor, it
obviously makes a case for his interference.
Now if we are correct in these views of equity jurisdiction, it
is a plain inference that the decree pleaded in bar of the present
suit was a final adjudication of the equities asserted by the
The bill in that case asserted in the most ample terms the
remedilessness of the complainant at law. It averred that at and
before the transfer and conveyances of the partnership property,
sought to be charged, to the railroad company, each of the members
of the partnership was largely indebted, without means and in a
state of insolvency, and that they had since been and still were
insolvent, so that a suit at law and the recovery of a judgment
against them or either of them would not afford the complainant any
relief, because neither of the partners have or had, since the
dates of the pretended transfers
Page 101 U. S. 692
of said partnership property, any property whatever upon which
the complainant could levy an execution at law or seize for the
satisfaction of the debt due to the bank. What more could have been
necessary to show that the complainant had no remedy at law -- that
his remedy, if he had any, was in equity?
But this was not all. The bill charged that the conveyances of
the partnership property and the transfers by which it had been
vested in the railroad company were illegal and fraudulent, that
the bank had a privilege or lien upon the property, and it prayed
that the various acts of sale, transfer, and conveyance by which
the property that had belonged to the partnership had been conveyed
to the railroad company, should be declared null and void, and that
the property should be decreed to be liable to the payment of the
amount due to the bank.
Thus, it appears the bill exhibited all that was necessary to
give to the court, sitting as a court of equity, complete
jurisdiction over the subject of the controversy between the
parties and over all the equities now asserted by the complainant
in his present suit. It must therefore be held that the decree
dismissing that bill determined the equities of the case. And this
must be so whether the reasons for the dismissal were sound or not.
That decree was affirmed in this Court, and affirmed on the merits.
We regarded the case and treated it as requiring an adjudication
upon the complainant's equity to be paid out of the property in the
hands of the railroad company. Nothing that can now be done in
another suit can take away the legal effect of the decree. Even
were we of opinion that the case was erroneously decided, it would
still be res judicata,
a bar to the complainant, a
protection to the defendants. It would be idle therefore to
reconsider the question whether the bank has a lien upon the
property he seeks to charge or whether there had been a trust in
the bank's favor.