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Dalton v. Barron.

creditor is not, however, compelled to levy and sell in the first instance. Appellant, if nothing else appeared, had the right first to institute this proceeding to set aside the fraudulent conveyance and remove it as an obstacle to securing a fair price at a subsequent sale. This court so held long ago, and has repeatedly urged upon the bar the course, in this respect, which appellant followed, rather than a sale under execution and a subsequent suit to set aside the conveyance alleged to be fraudulent. [Zoll v. Soper, 75 Mo. 1. c. 462; Ice & Cold Storage Co. v. Kuhlman, 238 Mo. l. c. 704; Bobb v. Woodward, 50 Mo. 1. c. 102; Welch v. Mann, 193 Mo. l. c. 326; Spindle v. Hyde, 247 Mo. 1. c. 52, 53; Lionberger v. Baker, 88 Mo. 1. c. 455, 456; Barrett v. Foote, 187 S. W. (Mo.) 1. c. 70, 71; Davidson v. Dockery, 179 Mo. l. c. 696; Oldham v. Wade, 273 Mo. l. c. 250, 251.] Some of these cases expressly decide that no nulla bona return is required as a condition precedent to the maintenance of such a suit, and the same decision is necessarily implicated in the rest regardless of the language used. The effect of these decisions is that the damage to the plaintiff is done when a fraudulent obstacle is interposed to his free enforcement of his lien. [Bump on Fraudulent Conveyances (4 Ed.) sec. 528.] The judgment lien given by our statute extends to property fraudulently conveyed. [Slattery v. Jones, supra.] At the moment a judgment lien attaches it does so without regard to any question whether part of the property it affects has been fraudulently conveyed or has not been so conveyed. The judgment creditor has full right to issue and levy his execution upon any of such property he may choose, and to sell the one or the other, if either will satisfy his judgment. If it be true that legal remedies, in the sense in which counsel use the term, must be exhausted in such a case before a judgment creditor can sue to set aside a fraudulent conveyance, then it would be always necessary to have a return nulla bona or other adequate evidence that the judgment debtor had no property subject to execution. But property fraudulently conveyed is subject to levy like any other

Dalton v. Barron.

property of the debtor. It would follow that no suit ever could be brought to set aside a fraudulent conveyance in advance of sale, since, if respondents are right, it would be necessary to jurisdiction of such a suit that all leviable property be first seized under the execution and soldand this would always include all property, whether previously fraudulently conveyed or not. The result of the argument would be that until the creditor had sold the fraudulently conveyed property under execution he would not have exhausted his legal remedies and equity would not hear him to remove the fraudulent obstruction to legal process, and, therefore, could never hear him for that purpose. This is obviously a conclusion which must be reached if the argument, as made, is valid, and just as obviously one which is denied by every decision permitting a judgment creditor to sue in advance of a sale.

It may be said that the real position is that equity will refuse jurisdiction until the creditor has exhausted his rights against property other than that fraudulently conveyed. As already pointed out, the judgment lien makes no distinction of that kind. The officer who makes a nulla bona return when there is leviable property he might seize does so at his peril. And this applies when the judgment is a lien on property fraudulently conveyed. The matter comes to this: Will courts of equity say to a creditor in a suit like this, you must resort to other property of the debtor if he has any; if he has and it is sufficient you must make your money out of it; if he has none or not enough, you need not levy upon the property fraudulently conveyed, but in such circumstances equity will take jurisdiction to remove the fraudulent obstacle interposed to a sale for a fair price? If this is the law, then the rule permits admittedly fraudulent grantors and grantees to choose what property subject to execution shall be seized and sold by a judgment creditor. He may not, after all, enforce his lien, as he may choose. He must submit to the will of the debtor and his grantee with respect to the property to be sold, though that will secures its ends by fraud. If this is the law, the result

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Dalton v. Barron.

will be that the creditor will levy and sell in the first place, and the earnest insistence of this court that the method pursued in this case is the preferable one will necessarily be brought to naught. The exhaustion of legal remedies, rule, does not apply in a case like this to the extent for which respondents contend. There is ample authority for this conclusion. This court expressly so held in Patton v. Bragg, 113 Mo. 601: "The fact that Lycurgus Bragg had an interest in his father's lands upon which plaintiff's judgments were liens, is no defense to this action. If, as this evidence tends 'to show, he was the owner of this tract conveyed to his wife, the judgments were also liens upon that, and plaintiff might have levied upon either, and it is not for defendants to question his right or dictate terms, under the pleadings in this case and the facts shown. The maxim of a complete remedy at law has no application here." The decision is in point and is in accord with reason and the weight of authority. When a fraudulent conveyance is an obstruction to the enforcement of a valid lien equity will remove it, and the fraudulent grantor and grantee have no standing to whittle down the lien by interposing the fraudulent conveyance between the lienor and his collection of the judgment out of any property the lien affects. "If the grantee's title is tainted with fraud, he has no right to say that all other means to satisfy the debt shall be exhausted before he shall be disturbed," and equity will not hear him when he undertakes to say it. [State Bank of Ceresco v. Belk, 68 Neb. 517; Hodge v. Gray, 110 Mich. 654; Weightman v. Hatch, 17 Ill. 281; Vasser v. Henderson, 40 Miss. 519; Newman v. Willetts, 52 Ill. 1. c. 101; Wadsworth v. Schisselbauer, 32 Minn. 84; Ladd v. Judson, 174 Ill. 344.] In the note to this case in 66 Am. St. 1. c. 287, numerous decisions are found which announce the same doctrine. In Botsford v. Beers, 11 Conn. 1. c. 375, the court said:

"And we are yet to learn that it is any defense, either in law or chancery, that there are other lands which might have been taken; and that the debtor is not in

Dalton v. Barron.

solvent. All this may be very proper evidence to show that the conveyance was not fraudulent. But upon what principle it is that these facts can be set up, by a fraudulent grantee to protect a conveyance admitted to be fraudulent, we are at a loss to discover."

In Spooner v. Ins. Co., 76 Minn. 1. c. 316, 317, 77 Am. St. 1. c. 651, 655, the same doctrine is announced and many decisions cited. In 23 L. R. A. (N. S.) 1 et seq. will be found a collection of the cases and an analysis of them. Mr. Bump in his work on Fraudulent Conveyances (4 Ed.) says:

"Sec. 532. Bill in Equity. The remedy most frequently used is a bill in equity, because a court of equity sifts the consciences of the parties and removes the cloud from the title. Fraud constitutes the most ancient foundation of its jurisdiction, and is a sufficient ground for its interposition. It may grant relief although there is ample remedy at law, for no relief is adequate except that which removes the fraudulent title. The relief in equity is different and may be more beneficial than that given by the law. But jurisdiction is not assumed upon the ground either that the subject is appropriate to a court of equity as a court of peculiar jurisdiction, or because that court proceeds upon an interpretation of the statute distinct and different from that given at law. On the contrary, it is entertained in equity notwithstanding it exists at law, and thus entertained because such deceitful practices, dishonest in their concoction, progress and consummation, are so abhorrent to every tribunal of justice, that every tribunal has authority and is bound to relieve against them according to its respective capacities and methods of proceeding, and because the relief peculiar to a court of equity is more nearly perfect than that afforded at law."

Numerous decisions are collected in a note. The same rule is laid down in 2 Moore on Fraudulent Conveyances, sec. 31, 1. c. 771. Respondents cite Missouri decisions which they contend decide the contrary. In Coleman v. Hagey, 252 Mo. 102, the question involved

Dalton v. Barron.

was what remedies a trustee in bankruptcy might have respecting property fraudulently conveyed by the bankrupt, and the inability of a creditor to maintain a creditor's bill before judgment was discussed. It was held he could not do so and that he could not proceed after judgment to subject property not subject to execution to the payment of his debt without having exhausted all legal remedies. This is the general rule here and elsewhere, and a careful reading of this opinion shows it decided nothing out of harmony with it. In Implement Co. v. Jones, 143 Mo. 1. c. 278, no judgment had been obtained and, therefore, no judgment lien existed. It was held this would make the bill bad except for the statute which permitted an attaching creditor to sue. The case is not in point. In Merry v. Fremon, 44 Mo. 518, it will be found that the court conceded the correctness of the contention that the judgment in that case no longer was a lien and treated the case from that point of view. In Mullen v. Hewitt, 103 Mo. 639, it was held that the expiration of ten years after judgment without revivor rendered the judgment dormant and excluded the possibility of a lien or issuance of execution without a previous suit on the judgment and thereby put the creditor at large. In Mellier v. Bartlett, 106 Mo. 1. c. 390, 391, the Mullen decision was reaffirmed. In Davidson v. Dockery, 179 Mo. 1. c. 693 et seq., plaintiff was a mere general creditor. No judgment had been obtained and no other lien was shown. The case was wholly unlike this. In Humphreys v. Milling Co., 98 Mo. 542, plaintiff's demand was an open account. What was said in that case had reference to this fact. In State ex rel. v. Goggin, 191 Mo. 482, there was no judgment effective against the fraudulent grantor, and no other lien. In Brown v. McKeown, 265 Mo. 320, the question in this case was not involved. In that case there was no judgment, and a proceeding by attachment was relied upon as the basis of the right to sue to set aside a fraudulent conveyance. The holding was that an attachment of the kind sued out in that case did not entitle the attachment plaintiff

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