Opinion
Argued October 20, 1910
Decided November 15, 1910
Hugh A. Bayne for appellant. Alfred A. Cook and Charles K. Allen for Lisman and others, respondents.
George S. Graham and Ralph Polk Buell for Iron Railway Company, respondent.
It does not appear from the complaint that the plaintiff has recovered any judgment against the debtor railway company in any court of this state; nor are any facts stated from which it would appear that an action could not have been brought against it here. It is a defendant in this action; submitting to the jurisdiction of the court. Notwithstanding, therefore, the judgment which was recovered within the state of Ohio, the plaintiff, in this state, is to be regarded, merely, as a general creditor and his complaint was properly demurrable. The rule was early established in this state, that creditors, seeking the aid of a court of equity to reach equitable assets of their debtor in satisfaction of their claims, must first have exhausted their legal remedies, according to the laws of this state, by the recovery of a judgment in one of its courts and the return of execution thereon unsatisfied. The authority of Tarbell v. Griggs, (3 Paige Ch. 207), in which case the rule was asserted by the chancellor, has, repeatedly, been recognized in this court. (See Rocky Mountain Nat. Bank v. Bliss, 89 N.Y. 338; Adee v. Bigler, 81 ib. 349; De Coppet v. Cone, 199 ib. 56.) It was provided in the Revised Statutes, and the provision is incorporated in the Code of Civil Procedure, that, where an execution against the property of a judgment debtor, issued out of a court of record, has been returned unsatisfied, the judgment creditor may maintain an action against the judgment debtor and any other person to compel the discovery of anything in action, or other property, belonging to the judgment debtor and to procure the satisfaction of the plaintiff's demand. (2 R.S. 173, sec. 38; Code Civ. Pro. sec. 1871.) These provisions did, and do, not, of course, affect the inherent power of a court of equity to take jurisdiction, when invoked in a case falling within some subject of equity jurisdiction. They apply, only, to creditors' bills. But, in the present case, no ground is made to appear by the bill for the exercise of the court's equitable powers. The bill, simply, seeks the aid of the court in reaching certain alleged corporate assets, which the respondents are charged with having withheld from the corporation and with having diverted to the stockholders. The plaintiff alleges the recovery of a judgment upon his claim in a court of another state and an unsatisfied execution thereupon; but he does not state any sufficient excuse for not bringing an action in a court of this state. If such an action was rendered impossible by some intervening cause, or event, cognizable at law, or in equity, compliance with the rule, doubtless, might be dispensed with; but it is essential that the facts constituting the excuse be set forth in the complaint. The only reason for equitable interference, apparent, is the insufficient one of the proceedings in the foreign jurisdiction. In Tarbell v. Griggs, ( supra), jurisdiction was refused; notwithstanding that the creditor's bill alleged the recovery of a judgment in the United States Circuit Court for the southern district of New York. It was held that such a judgment could not support the bill and that the plaintiff's remedy at law had not been exhausted according to the laws of this state. In Rocky Mountain Nat. Bank v. Bliss, ( supra), it was held that "when a statute of this state requires, as a condition precedent to further proceedings in its courts, that an execution against the property shall first have been issued, it means that such execution shall have been issued out of a court of this state of general jurisdiction," (citing, among other cases, Tarbell v. Griggs). (p. 342.)
It is argued that the allegation, that "it became impossible for the creditors of the Railway company to enforce at law the collection of their claims and debts," was a sufficient ground for the assumption of jurisdiction by a court of equity. That allegation, however, is not of some fact which the demurrer is to be taken as admitting; it is but the statement of the pleader's conclusion. It is, further, said that, because it is alleged that the debtor possessed no property, except the equitable assets now sought to be reached, it is shown that the legal remedy has been exhausted. Such an allegation is not equivalent to an allegation of insolvency. But, if we should assume that it was, in effect, still it would be insufficient to prevent the application of the rule. The statute had not made insolvency the test of its operation. ( Adee v. Bigler, 81 N.Y. 349; United Glass Co. v. Vary, 152 ib. at p. 124.)
There is no allegation in this complaint, which would authorize a court of equity to interfere in aid of the plaintiff, whether within the statutory provision, or within any of the branches of its peculiar jurisdiction, and, therefore, the judgment must be affirmed.
CULLEN, Ch. J., HAIGHT, VANN, WERNER and CHASE, JJ., concur.
Judgment affirmed, with costs.