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Hagan v. Walker et al.
debtor, for a discovery of assets and the payment of his debt, there can be no doubt. That, in soine cases, he may join with the administrator a third person, who is in possession of property which is amenable to the payment of the debt, is also clear. The instances in which it has been actually held that such third person might be joined, are chiefly cases of collusion between the administrator and the third person possessed of assets, insol. vency of the administrator, and where the third person was the surviving partner of the deceased. Utterson v. Mair, 2 Ves. Jr. 95; Alsager v. Rowley, 6 Ves. 748; Burroughs v. Elton, 11 Ves. 29; Gedge v. Traill, 1 Russ. & M. 281; Long v. Majestre, 1 Johns. Ch. Rep. 306. But it will be found that the equitable right of the creditor to join a third person, and have a discovery and an appropriation of assets held by him, has never been limited to these particular cases.
For, while it is generally agreed that some special case must be made, it is also declared in all the cases, that what is to constitute it has not been limited by any precise and rigid rule. In Holland v. Prior, (1 My. & K. 240,) Lord Brougham applied the rule to the case of a representative of a deceased representative, without any suggestion of collusion between him and the present representative. In Simpson v. Vaughn, (2 Atk. 33,) Lord Hardwicke said: “ It has been said at the bar, that you may make any person a defendant that you apprehend has possessed himself of assets upon which you have a lien. But this certainly cannot be laid down as a general rule; for it would be of dangerous consequence to insist that you can make any person a defendant who has assets, unless you can show to the court he denies that he has assets, or applies them improperly.” Considering, then, that some special and sufficient reasons must be shown for proceeding against a third person, jointly with the administrator, the inquiry is, whether this bill does not contain those reasons; and we are of opinion it does.
It appears, from the statements in the bill, that William H. Pope is in possession of all the assets of the deceased debtor, both real and personal, holding them under conveyances made to him by the deceased, absolute in form, but accompanied by secret trusts in favor of the grantor, designed to defraud this particular creditor, and prevent him from obtaining payment of his judgment, and that this fraudulent design has thus far been successfully executed.
Now these conveyances are not only valid on their face, but they are really valid as between the parties; and though they are void as against creditors, and the property, both at law and in equity, is subject to the payment of the debts of the deceased, yet the embarrassments attending any attempt by the
Hagan v. Walker et al.
administrator to possess himself even of that part of these assets, which were personalty, at law would certainly be great, and perhaps insuperable. 2 Rand. Rep. 384; Martin v. Root, 17 Mass. Rep. 228. It is true he is the representative of creditors, as well as of the next of kin, and in the former capacity might be able to make good his claim to a sufficient amount of these personal assets to enable him to pay the debts. Holland v. Cruft, 20 Pick. 321. But the impracticability of taking an account of the debts at law, and proportioning the recovery to the amount required to pay them, would render a resort to equity indispensable to do entire justice between all parties, even if the assets were legal in their nature. If this bill had contained an allegation that the administrator had been requested to sue, and had refused, the case would be free from all doubt; and, upon the facts averred in the bill, we do not think such a request necessary; because it does appear that about two years elapsed after the death of Leroy Pope before this bill was filed, and the administrator took no step to reduce these assets to possession ; because, when this bill was filed, he resists it by a demurrer, relying on the statute of limitations; because it must be admitted to have been doubtful how far he had a remedy, without the concurrence of any creditor; and chiefly, because there is no danger of interfering with the due course of administrations, or taking from administrators their proper control over suits for the recovery of assets, by holding that a creditor may file a bill against the administrator and the fraudulent grantee of deceased debtor, to subject the property fraudulently conveyed to the payment of the debt. . It comes within the case put by Lord Hardwicke; for here this specific property is amenable to the claim of this creditor, and in the sense in which he employs the word, the creditor had a lien upon these assets; and it does appear to the court, that the party holding them both denies that they are assets and applies them improperly, for he claims them as his own, and is endeavoring to defeat a just creditor by an assertion of a title invalid as against him.
In this view of the case, it is not essential that the creditor cannot.proceed at law until after a revival of the judgment by a .scire facias. In Burroughs v. Elfon, (11 Ves. 36–7,), Lord Eldon had occasion to consider the force of this objection in a similar case. It was a bill to reach real assets in the hands of a surviving partner. The complainant's judgment was upwards of seventeen years old, and no step had been taken to revive it against the administrator or the heir. His decision, in accordance with two previous cases to which he refers, was, that such a creditor could sustain the bill, though it might be necessary to direct him to proceed at law to revive his judgment.
Hagan v. Walker et al.
It has been argued, that the bill does not show that there are not other assets in the hands of the administrator sufficient to pay this debt, and contains no allegation that the admiņistrator was ever requested to pay it. But the bih does expressly aver, that, aside from the property fraudulently conveyed, there is not, any where, any property of Leroy Pope, out of which the debt could be collected ; and, although it states that the fraudulent grantor and grantee both remained in possession, and took the crops jointly, and that these crops were of great value, yet, inasmuch as between themselves the crops belonged to the grantee, and as it was the object of the conveyances to prevent them from being applied to the benefit of creditors, we are of opinion there is no presumption that any thing arising from this joint possession ever came to the hands of the administrator, and, therefore, that a demand on him would have been a vain act, which the creditor was not compelled to do.
One other ground on which the demurrer has been rested, requires notice. The bill alleges that, after the fraudulent conveyances to William H. Pope had been made, he mortgaged the property to Virgil Maxcy, as Solicitor of the Treasury of the United States, to secure the debt of Leroy Pope which William H. Pope assumed to pay, and it avers that this debt has been in part paid by means described in the bill. Virgil Maxcy and, subsequently when he went out of office, his successor, Charles B. Penrose, were named as parties to the bill, but they were out of the jurisdiction, no process was served on either of them, and neither ever appeared or answered. The bill prays that William H. Pope may be compelled to pay to the United States the balance due to them, out of the property in question, and that the residue may be subjected to the payment of the complainant's debt, and for other and further relief.
Under the act of Congress of the 28th of February, 1839, (5 Stat. at Large, 321, $ 1,) it does not defeat the jurisdiction of the court that a person named as defendant is not an inhabitant of or found within the district where the suit is brought; the court may still adjudicate between the parties who are properly before it, and the absent parties are not to be concluded or affected by the decree.
It is obvious, however, that there may be cases in which the court cannot adjudicate between the parties who are regularly before it, for the reason that it cannot bind those who are ab sent. Where no relief can be given without taking an account between an absent party and one before the court, though the defect of parties may not defeat the jurisdiction, strictly speak. ing, yet the court will make no decree in favor of the com. plainant.
Hagan v. Walker et al.
The case before us is not one of this character; for although the whole of the relief specially prayed for cannot be granted in the particular mode there indicated, because the United States not being a party, no account can be taken of the debt due to them from Leroy Pope or William H. Pope, yet, subject to the encumbrance of this debt, and without affecting it in any manner, the property may be appropriated to the payment of the complainant's debt.
It is true, that in Finley v. The Bank of the United States, (11 Wheat. R. 306,) which was a bill to foreclose a mortgage by sale, Chief Justice Marshall says: “ It cannot be doubted that the prior mortgagee ought regularly to have been a party defendant, and that had the existence of his mortgage been known to the court, no decree ought to have been pronounced in the cause until he was introduced into it.” But it could not have been intended by this to say, that a prior encumbrancer was absolutely a necessary party without whose presence no decree of sale could be made, because in that very case the court refused to treat the decree as erroncouş, after it had been executed.
In Delabere v. Norwood, (3 Swanst. R. 144, n.) in a bill to obtain payment of an annuity charged on land, prior annuitants were held not to be necessary parties. In Rose v. Page, (2 Sim. 471,) the same rule was applied to a prior mortgagee; and in Wakeman v. Grover, (4 Paige, R. 23,) and Rundell v. Marquis of Donegal, (1 Hogan, 308,) and Post 2. Mackall, (3 Bland, 495,) to prior judgment creditors; and in Parker v. Fuller, (1 Russ. & My. 656,) persons having encumbrances on rcal property, which the bill sought to subject to the payment of debts of the deceased owner, were held not to be necessary parties to the bill. See also Hoxie v. Carr, 1 Sum. R. 173; Calvert on Parties, 128.
On the other hand there are cases in which it has been declared that all encumbrancers are necessary parties. Many are collected in Story's E. Pl. 178, n. But we consider the true rule to be, that, where it is the object of the bill to procure a sale of the land, and the prior encumbrancer holds the legal title, and his debt is payable, it is proper to make him a party in order that a sale may be made of the whole title. In this sense, and for this purpose, he may be correctly said to be a necessary party, that is, necessary to such a decree. But it is in the power of the court to order a sale subject to the prior encumbrance, a power which it will exercise in fit cases. And when the prior encumbrancer is not subject to the jurisdiction of the court, oi cannot be joined without defeating its jurisdiction, and the validity of the encumbrance is admitted, it is fit
Kennett et al. v. Chambers.
to dispense with his being made a party. To such a case the 47th rule for the equity practice of the Circuit Courts of the United States is applicable, and by force of it, this cause may proceed without making the United States, or the Solicitor of the Treasury a party to the decree.
The decree of the District Court must be reversed, and the case remanded, with directions to overrule the demurrer and order the defendants, other than the representative of the United States, to answer the bill.
This cause came on to be heard on the transcript of the record from the District Court of the United States for the Northern District of Alabama, and was argued by counsel. On consideration whereof it is now here ordered, adjudged, and decreed, that the decree of the said District 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 District Court, with directions to overrule the demurrer, and to order the defendants, other than the representative of the United States, to answer the bill.
JOHN KENNETT, EZEKIEL S. Haines, EDEN B. REEDER, GEORGE
GRAHAM, Jr., John McCarty, JOSHUA YORKE, AND ROBERT B. BOWLER, APPELLANTS, v. Thomas J. CHAMBERS.
t belongs cxclusively to the political department of the government to recognize or to refuse to recognize a new government in a foreign country, claiming to have dis
placed the old and established a new one. Until the political department of the government acknowledged the independence of
Texas, the Judiciary were bound to consider the old order of things as having
continued. While the government of the United States acknowledged its treaty of limits and of
amity and friendship with Mexico as still subsisting and obligatory, no citizen of the United States could lawfully furnish supplies to Texas to enable it to carry on the
war against Mexico. A contract, made in Cincinnati, after Texas declared itself independent, but before
its independence was acknowledged by the United States, whereby the complainants agreed to furnish, and did furnish money to a General in the Texan army, to enable him to raise and equip troops to be employed against Mexico, was illegal
and void, and cannot be enforced in a court of the United States. The circumstance that the Texan officer agreed, in consideration of these advances
of money, to convey to them certain lands in Texas, of which he covenanted that he was then the owner, will not make the contract valid when it appears upon the face of it, and by the averments in the bill, that the object and intention of the complainants in adrancing the money was to assist Texas in its military operations.