By the laws of Louisiana, where there has been a judicial sale
of the succession by a probate judge, a creditor of the estate, who
obtains a judgment, cannot levy an execution upon the property so
transferred upon the ground that the sale was fraudulent and void.
He should first bring an action to set the sale aside.
The purchaser under the judicial sale having filed a bill and
obtained an injunction upon the creditor to stay the execution, it
was an irregular mode of raising the question of fraud for the
creditor to file an answer setting it forth and alleging the sales
to be void upon that ground. He should have filed a cross-bill.
Exceptions to the answer upon this account were properly sustained
by the court below.
But if the court below should perpetuate the in upon the
defendants' refusal to answer further, the injunction should be
free from doubt, in leaving the creditor to pursue other property
under his judgment, and also at liberty to file a cross-bill. If
the injunction does not clearly reserve these rights to the
creditor it goes too far, and the judgment of the court below must
be reversed.
As the merits of the case were not involved in the decision of
the court, it will only be necessary to give such a narrative of
the facts as will illustrate the points of law upon which the
decision turned.
On 24 November, 1837, James S. Douglas of the State of
Louisiana, made his last will and testament, as follows:
"I, James S. Douglas of the Parish of Concordia, and State of
Louisiana, being feeble in body, and knowing the uncertainty of
this life, but of sound and disposing mind and memory, do make and
publish this my last will and testament."
"First. I direct that all my just debts be paid as soon after
my
Page 46 U. S. 144
decease as my executors shall realize the same from the real and
personal estate entrusted to their care and management."
"Secondly. Reposing the utmost confidence in my beloved wife,
Emeline Douglas I hereby constitute and appoint her executrix, and
my brother, Stephen Douglas and my friend, Passmore Hoopes,
executors of all my estate, real and personal, lying and being in
the State of Mississippi."
"Thirdly. I also appoint my brother, Stephen Douglas and my
friend, Passmore Hoopes, executors of all my estate, real and
personal, lying and being in the said State of Louisiana."
"In witness whereof I have hereunto set my hand any seal this
twenty-fourth day of November, one thousand eight hundred and
thirty-seven."
"[Signed] JAMES S. DOUGLAS [SEAL]"
This will, being duly attested, was admitted to probate in
Mississippi on 25 December, 1837, and letters testamentary granted.
It is not necessary to follow the proceedings in Mississippi
further.
In 1838, May 26, in the State of Louisiana, before Richard
Charles Downes, Parish Judge in and for the Parish of Madison,
ex officio judge of probates, came Stephen Douglas
presented his petition, setting forth the death of his brother,
James S. Douglas as happening in November, 1837; that he made his
last will and testament, wherein he appointed the said Stephen
Douglas and Passmore Hoopes testamentary executors of his estate in
Louisiana; that probate of the will had been made in Claiborne
County, Mississippi; therefore, praying letters in pursuance of the
testament, and an inventory, whereupon the judge ordered that upon
probate of the testament an inventory be taken.
On 30 March, 1839, the will was proved in Louisiana, as it had
before been in Mississippi. Amongst other claims against the
estate, Stephen Douglas, the executor, filed an account claiming a
debt due to him of $53,150.42.
On 31 October, 1839, Emeline Douglas the widow, was appointed
guardian of her four children, and Archibald Douglas a younger
brother of Stephen, was appointed under tutor or guardian. A family
meeting was called, and attended the parish judge, which advised
the sale of the plantation and slaves, implements, cattle &c.,
at the head of Lake St. Joseph's, to satisfy the balance due to
Stephen Douglas the executor.
The sale was accordingly ordered by the parish judge, and took
place on 23 March, 1840, when Mrs. Emeline Douglas and Archibald
Douglas became the purchasers.
On 1, 1840, Emeline Douglas obtained a judgment in her favor
against the estate for $76,634.74, and, on 22 of April the parish
judge ordered another sale to take place for the purpose of paying
this debt.
Page 46 U. S. 145
On 8 June, 1840, the parish judge made sale of a plantation
called Buck Ridge, slaves, cattle, corn &c., all of which
belonged, jointly, to James S. Douglas the deceased, and Stephen
Douglas the executor. This property was purchased by Emeline
Douglas and Archibald Douglas for $83,000.
In December, 1840, and January, 1842, Ford, a citizen of
Virginia, obtained the three following judgments against the
executor, in the circuit court of the United States,
viz.,
the one judgment obtained on 23 December, 1840, for $9,180, with
interest, at the rate of eight percent per year, from 15 January,
1838, on one-half thereof, and from 15 January, 1839, on the other
half thereof, besides costs.
Another judgment, of 26 December, 1840, for $4,590, with
interest at same rate from 15 January, 1840, besides costs.
The third, of January 3, 1842, for $4,590, with interest at same
rate until paid, besides costs -- making together $18,360, besides
interest and costs.
Executions were issued upon these judgments and levied upon the
property which had been purchased by Emeline Douglas and Archibald
Douglas.
On 21 December, 1842, Archibald Douglas Maxwell W. Bland and
Emeline, his wife (late Emeline Douglas), filed their bill in the
Circuit Court of the United States for the Eastern District of
Louisiana against Christopher Ford and the marshal, praying for an
injunction to stay further proceedings under the judgments, and
that they might be quieted in their possession of the property
which they had purchased.
On 30 December, 1842, an injunction was issued accordingly.
On 21 April, 1843, Ford filed his answer, in which he alleged
that the proceedings under the will, as well in Mississippi as in
Louisiana, were the result of fraud, collusion, and combination, in
consequence of which they were null and void and passed no title to
the complainants. The answer then proceeded to set forth with great
particularity the acts of which he complained and concluded as
follows:
"This respondent, having answered the allegations in said
petition set forth, prays this Honorable Court that the said
petition may be decreed to be dismissed, and the injunction had and
obtained in this case may be dissolved, and a judgment rendered
against the said petitioners and the sureties on their injunction
bond for damages, according to law. That this Honorable Court make
such other judgment, orders, and decrees as may be found legal and
proper to declare void and null the sales relied on in said
petition, to finally dissolve the said injunction with legal
damages in favor of this respondent, to dismiss said petition and
relieve this respondent from the opposition of said petitioners, to
order the marshal to proceed
Page 46 U. S. 146
to the sale of said property under the said three writs of
fieri facias, for the satisfaction of the said judgments
of this respondent, and that this respondent have judgment for his
costs."
"And this respondent will ever pray, &c."
"[Signed] CHRISTOPHER FORD"
On 22 April, 1843, the following exception to the answer was
filed:
"The said plaintiffs except to the answer filed by the said
defendants in this behalf because the matters and things set forth
in the said answer cannot by law be inquired into in the present
suit or proceedings instituted by the said plaintiffs. And the said
plaintiffs, not admitting any of the facts or matters set forth and
alleged in the said answer of the said defendants, but on the
contrary denying and protesting against the truth of all and every
part thereof and alleging that the truth thereof cannot be inquired
into in this action, pray that they may have the benefit of their
injunction and that the same may be made perpetual, &c."
"[Signed] JNO. R. GRYMES, for
Plaintiffs"
And on the same day and year aforesaid, to-wit, on 22 April,
1842, the following agreement was filed:
"Douglas v. C. Ford
et al."
"Circuit Court of the United States, Eastern District of
Louisiana:"
"It is agreed that this case may be set down for argument on the
matters of law arising on the petition and answer, as on an
exception to the answer, and that if the judgment of the court on
the matters of law should be for the defendant, the plaintiffs may
join issue on the facts, and the testimony taken in the usual
manner. The plaintiffs to be at liberty at any time before hearing,
to file special exceptions in writing."
"[Signed] JNO. R. GRYMES, for
Plaintiffs"
On 22 April, 1843, the cause came on for trial upon the
plaintiffs' exceptions to the answer of the defendant, and on the
24th the following order of court was entered of record:
"
Monday, April 24, 1843"
"The court met pursuant to adjournment. Present, the Honorable
John McKinley, Presiding Judge; the Honorable Theodore H. McCaleb,
district Judge."
"Christopher Douglas et al v. Christopher Ford et al."
"The consideration of exception filed in this case to the answer
of the defendant was this day resumed before the court, the
complainants not appearing either in person or by his solicitor,
and F. Houston, Esq., for the defendant. Whereupon, the arguments
of counsel being closed, it is ordered, adjudged, and decreed by
the
Page 46 U. S. 147
court that the exception of the complainants to defendants'
answer be sustained, and that the defendant answer over."
"Archibald Douglas v. Christopher Ford
et al."
"The defendant, Christopher Ford, by his counsel, declines to
answer further in this case the bill of the plaintiffs, relying and
insisting on the sufficiency of the ample and conclusive answer
filed by him in this cause and the utterly null and void character
of the title set up by said plaintiffs, apparent on their said
bill, and the record of the mortuary proceedings of the succession
of the said James S. Douglas deceased. The defendant having
declined to answer further in this case and to submit it to the
court to render such final decree in the case as may appear to them
to be proper, it is therefore ordered, adjudged, and decreed that
the injunction heretofore awarded in this case be and the same is
made perpetual, and it is further ordered, adjudged, and decreed
that the plaintiffs recover the costs of suit, without prejudice to
the right of the defendant to any action he may think proper."
From this decree, Ford appealed to this Court.
Page 46 U. S. 163
MR. JUSTICE NELSON delivered the opinion of the Court.
The complainants below, the appellees here, filed their bill
against Christopher Ford, the appellant, and Robertson, the marshal
of the district, for the purpose of obtaining injunctions to stay
proceedings upon the several judgments and executions which Ford
had recovered in the circuit court of the United States against one
Stephen Douglas as executor of J. S. Douglas deceased.
The judgments amounted to some $18,000, and the marshal had
levied upon two plantations, and the slaves thereon, of which the
testator, J. S. Douglas had died seized and possessed.
The bill set forth that Stephen Douglas against whom the
judgments had been recovered, neither in his own right nor as
executor of J. S. Douglas deceased, had any title to or interest in
the plantations and slaves which had been seized under and by
virtue of the said executions, and that the same formed no part or
portion of the succession of the testator in the hands of the said
executors to be administered. But that the whole of the said
plantations and slaves, including the crops of cotton, and all
other things thereon, were
Page 46 U. S. 164
the true and lawful property of the complainants; that they were
in the lawful possession of the same, and had been for a long time
before the issuing of the executions and seizure complained of, and
had acquired the said property and the title thereto at a probate
sale of all the property belonging to the estate and succession of
the said testator -- which sale was lawfully made and vested in the
complainants a good and valid title. All which would appear by the
proces verbal of the said ajudications and the mortuary
proceedings annexed to and forming a part of the bill.
An injunction was granted in pursuance of the prayer of the bill
staying all proceedings on the judgments rendered in the three
several suits and also on the executions issued thereon against the
property.
Christopher Ford, the adjudged creditor, in answer to the bill,
denied the validity of the probate sales of the plantations and
slaves to the complainants and charged that they were effected and
the pretended title thereto acquired by fraud and covin between the
executor, Stephen Douglas and the executrix, the widow of the
testator, and one of the complainants, for the purpose of hindering
and defrauding the creditors of the estate, that in furtherance of
this design, a large amount of simulated and fraudulent claims of
the executor and executrix were presented against the succession,
to-wit, $53,000 and upwards in favor of the former, and $76,000 and
upwards in favor of the latter, which were received and allowed by
the probate court without any vouchers or legal evidence of the
genuineness of the debts against the estate, that these simulated
and fraudulent claims were made the foundation of an application to
the said probate court for an order to sell the two plantations and
slaves thereon, under whom the widow and one Archibald Douglas
became the purchasers at the probate sale, that neither had paid
any part of the purchase money to the executor or probate court,
and which was the only title of the complainants to the property in
question, upon which the defendant had caused the executions to be
levied.
In confirmation of the fraud thus alleged in the probate sales
in the Parish of Madison and State of Louisiana, the defendant
further charges that the testator died seized and possessed also of
a large plantation and slaves and personal property therein situate
in the County of Claiborne and State of Mississippi, inventoried at
upwards of $70,000, besides notes and accounts to the amount of
$161,000 and upwards, that the said plantations and slaves were, on
application of Stephen Douglas the executor, to the probate court
in that state, and an order for that purpose obtained, sold, and
purchased in by the widow and executrix for about the sum of
$40,000, and that the personal estate of $161,000 and upwards, of
notes and accounts, were not and have not been accounted for by the
executor to the court of probate.
Page 46 U. S. 165
In short, according to the answer of the defendant, the estate
and succession of the deceased debtor, inventoried at about the sum
of $300,000, and for aught that appears available to that amount,
has been sold and transferred through the instrumentality and
agency of family connections, under color of proceedings apparently
in due form in the probate court, into the hands of the widow and a
brother of the deceased without adequate consideration, if
consideration at all, and with the intent to hinder, delay, and
defraud the creditors of the estate, and particularly the
defendant.
The complainants excepted to the answer filed by the defendant
because the matters and doings set forth therein could not in law
be inquired into in the present suit or proceedings instituted by
the said complainants, and prayed that they might have the benefit
of their injunction and that it might be made perpetual.
And thereupon it was agreed that the case might be set down for
argument on the matters of law arising on the bill and answer and
that if the judgment of the court in matters of law should be for
the defendant, the complainants might join issue on the fact, and
testimony be taken in the usual manner.
The court, after argument of counsel, decreed that the exception
of the complainants to the defendant's answer was well taken, and
gave leave to answer over, which was declined, and therefore the
court adjudged and decreed that the injunction theretofore awarded
in the case should be made perpetual, and it was further adjudged
and decreed that the complainants recover the costs of suit,
without prejudice to the right of the defendant to any action he
might think proper.
The decision of the court below and the view which we have taken
of the case here do not involve the question whether the matters
set forth in the answer sufficiently established the fact that a
fraud had been committed by the complainants against creditors in
the several sales and transfers of the property in question through
the instrumentality of the probate court, nor, as it respects the
effect of the fraud, if established, upon the title derived under
these sales. If the case depended upon the decision of these
questions, we entertain little doubt as to the judgment that should
be given.
The ground of the decision below and of the argument here is
that the complainants were not bound to answer the allegations of
fraud against their title in the aspect in which the case was
presented to the court, that a title derived under a public sale,
in due form of law, by the probate judge, protected them in the
full and peaceable possession and enjoyment of the property until
the conveyance was vacated and set aside by a direct proceeding
instituted for that purpose, and that this step on the part of the
judgment creditors was essential, upon the established law of the
State of
Page 46 U. S. 166
Louisiana, before he could subject the property to the
satisfaction of his judgment.
We have accordingly looked into the law of that state on this
subject, and find the principle contended for well settled and
uniformly applied by its courts in cases like the present. The
judgment creditor is not permitted to treat a conveyance from the
defendant in the judgment made by authentic act, or in pursuance of
a judicial sale of the succession by a probate judge, as null and
void, and to seize and sell the property which had thus passed to
the vendee. The law requires that he should bring an action to set
the alienation aside and succeed in the same before he can levy his
execution. And so firmly settled and fixed is this principle in the
jurisprudence of Louisiana as a rule of property and as
administered in the courts of that state that even if the sale and
conveyance by authentic act, or in pursuance of a judicial sale,
are confessedly fraudulent and void, still no title passes to a
purchaser under the judgment and execution, not a creditor of the
vender, so as to enable him to attack the conveyance and obtain
possession of the property. In effect the sale, if permitted to
take place, is null and void, and passes no title.
Henry v.
Hyde, 5 Mart. N.S. 633;
Yocum v. Bullitt, 6
id. 324;
Peet v. Morgan, 6
id. 137;
Childres v. Allen, 3 La. 477;
Brunet v. Duvergis,
5
id. 124;
Samory v. Hebrard, 17
id.
558.
The case of
Yocum v. Bullitt, among many above referred
to, is like the one before us.
The court there said:
"The record shows that the slaves had been conveyed by the
defendant in the execution by a sale under the private signature
recorded in the office of the Parish Judge of St. Landry, where the
sale was made. If the sale was fraudulent, it must be regularly set
aside by a suit instituted for that purpose; that it was not less a
sale and binding upon third parties until declared null in an
action which the law gives, Curia Phil. Revocatoria, n. 2; that the
possession of the vendee was a legal one, until avoided in due
course of law."
The court further remarked, that
"The same point had been determined at the preceding term, in
which it had been held that a conveyance alleged to be fraudulent
could not be tested by the seizure of the property or estate
belonging to the vender, but an action must be brought to annul the
conveyance."
The principle runs through all the cases in the books of reports
in that state, and has its foundation in the Civil Code, art. 1965,
1973, 1984, and in the Code of Practice, ยง 3, art. 298, 301, 604,
607, and in
Stein v. Gibbons & Irby, 16 La. 103. And
from the course of decision on the subject, it is to be regarded
not merely as a rule of practice, or mode of proceeding in the
enforcement of civil rights, which would not be binding upon this
court, but as a rule of property that affects the title and estate
of
Page 46 U. S. 167
the vendee, and cannot, therefore, be dispensed with without
disturbing one of the securities upon which the rights of property
depend. It gives strength and stability to its possession and
enjoyment by forbidding the violation of either except upon legal
proceedings properly instituted for the purpose. Neither can be
disturbed except by judgment of law. For this purpose the
appropriate action is given, providing for the secession of all
contracts as well as for revoking all judgments when founded in
fraud of the rights of creditors.
In this Court, a bill filed in the equity code is the
appropriate remedy to set aside the conveyance. In the present case
a cross-bill should have been filed setting forth the matters
contained in the answer of the defendant. The vendees would then
have had an opportunity to answer the allegations of fraud charged
in the bill, and if denied, the parties could have gone to their
proofs, and the case disposed of upon the merits.
It is said that in some of the western states, an answer like
the one in question would be regarded by their courts in the nature
of a cross-bill, upon which to found proceedings for the purpose of
setting aside the fraudulent conveyance. But the practice in this
Court is otherwise, and more in conformity with the established
course of proceeding in a court of equity.
We are of opinion, therefore, that the appellant mistook his
rights in attempting to raise the question of fraud in the probate
sales in his answer to the injunction bill, and that instead
thereof he should have filed a cross-bill, and have thus instituted
a direct proceeding for the purpose of setting aside the sales and
subjecting the property to his judgments and executions, and that
in this respect and to this extent the decree of the court below
was correct.
But on looking into the decree, we are apprehensive that it has
been carried further than the assertion of the principle which we
are disposed to uphold, and which may seriously embarrass the
appellant in the pursuit of a remedy that is yet clearly open to
him.
The injunction issued on filing the bill of complainants
commanded the appellant to desist from all further proceedings on
his three judgments or on the executions issued against the
property, and the court, on the coming in of the answer, has
decreed that the same be made perpetual. And further that the
complainants recover the costs of suit without prejudice to the
right of the defendant to any action he may think proper.
It is at least a matter of doubt, and might be of litigation
hereafter, whether, upon the broad and absolute terms of the decree
used in enjoining the proceedings, the party is not concluded from
further proceedings against the property in question founded upon
these judgments and executions.
They must constitute the foundation of his right and title, upon
filing a cross-bill, to any relief that he may hereafter show
himself
Page 46 U. S. 168
entitled to. The saving clause may not be regarded as
necessarily leaving a proceeding of this description open to him. A
question might also be raised whether the judgments are not so
effectually enjoined as to prevent their enforcement against
property of the judgment debtor not in controversy in this suit. At
all events, we think it due to the appellant and to justice,
looking at the nature and character of the transaction and
proceeding as developed in the pleadings, that the case should be
cleared of all doubts and dispute upon this point. We shall
therefore
Reverse the decree and remit the proceedings to the court
below with direction that all further proceedings on the three
judgments and executions be stayed as it respects the property
seized and in question, but that the appellant have liberty to file
a cross-bill, and take such further proceedings thereon as he may
be advised.
Order
This cause came on to be heard on the transcript of the record
from the Circuit Court of the United States for the Eastern
District of Louisiana, and was argued by counsel. On consideration
whereof it is ordered and decreed by this Court that the decree of
the said circuit court in this cause be and the same is hereby
reversed with costs, and that this cause be and the same is hereby
remanded to the said circuit court with directions to that court
that all further proceedings on the three judgments and executions
be stayed as it respects the property seized and in question, but
that the appellant have liberty to file a cross-bill and to take
such further proceedings thereon as he may be advised, and that
such further proceedings be had in this cause in conformity to the
opinion of this Court as to law and justice shall appertain.
