Gullickson v. Madsen

PinNey, J.

1. Where a complaint is evidently framed for the purpose of setting out an equitable cause of action, the defendant, upon a written demurrer thereto that it does not state facts sufficient to constitute a cause.of action, may avail himself of the objection that the plaintiff has an adequate remedy by legal action. This has been so often held that reference to a few only of the later cases is permissible. Denner v. C., M. & St. P. R. Co. 57 Wis. 218 ; Trustees v. Kilbourn, 74 Wis. 452 ; Avery v. Ryan, 74 Wis. 599 ; Stein, v. Benedict, 83 Wis. 603 .

2. The question arises whether, upon the allegations of the complaint, the plaintiffs have an adequate remedy at law, so as to exclude the exercise of the equitable functions of the court. To that end it is not enough that there is a remedy at law, but “ it must be plain and adequate; or, in other words, as practicable and efficient to the ends of justice and its prompt administration as the remedy in equity.” Boyce's Ex'rs v. Grundy, 3 Pet. 210 ; Watson v. Sutherland, 5 Wall. 74 . And the jurisdiction in equity will be sustained when time, expense, and a multiplicity of suits will be saved by it, and the rights of all concerned will be settled in one litigation. Oelrichs v. Spain, 15 Wall. 211, 228 . Although these cases were ruled under the sixteenth section of the Judiciary Act of 1789, declaring that suits in equity should not be sustained in either of the courts of the United States “ in any case where a plain, adequate, and complete remedy may be had at law,” yet this section has repeatedly been held to be merely declaratory of the pre-existing rule, and not intended to narrow jurisdiction in equity. Boyce's Ex'rs v. Grundy, and other cases, supra; 1 Pom. Eq. Jur. §§ 295-297.

The remedy theretofore obtainable by a creditors’ bill? *24 repealed by the act of 1857, was restored by sec. 3029, R. S., which declares that “ whenever any execution against the property of any judgment debtor shall have been issued upon a judgment for the payment of money, and shall have been returned unsatisfied in whole or in part, the judgment creditor may commence an action against such judgment debtor and any other person, to compel the discovery of any property or thing in action belonging to such judgment debtor, and of any property, money or thing in action due or held in trust for him, and to prevent the. transfer” thereof, etc. The allegations of the complaint in respect to the dealings of the defendant F. M. Madsen with the defendant bank in the name of his wife, with his own moneys, to defraud the plaintiffs, and that the bank has in its possession or under its control moneys, credits, and effects belonging to the defendant F. M. Madsen, and is owing upon certificates of deposit issued to him or his wife, in all to the amount of over $600, sufficiently state a cause of action within the equitable jurisdiction of the court. The demurrer was a joint one by all the defendants, and it follows that it was improperly sustained. The questions presented in this case were recently before the court in Pierstoff v. Jorges, 86 Wis. 128 , and the decision in that case is conclusive against this demurrer.

3. It was contended that the plaintiffs had an adequate remedy at law, within the meaning of the rule above stated, in respect to the property embraced in the chattel mortgage to the amount of its entire value, and which it is alleged was executed without any consideration and made for the purpose of hindering and delaying the plaintiffs in the collection of their debt. In such case the mortgage would be but a fraudulent device to protect the defendants’ property from seizure, clouding the title thereto, and seriously embarrassing the plaintiffs in attempting to proceed against it. It was contended that the plaintiffs might *25 seize and sell this property on tbeir execution, and that their ability to do so amounted to an adequate remedy at law. This, in theory, may be true, but practically it is not. The creditor in such case encounters at the outset a fraudulent obstruction to his rights, placed there to defeat or hinder and delay him, and under it another claimant to the property appears under an instrument ordinarily valid on its face, and warns the sheriff not to interfere, under peril of an action for damages. He in turn, in the exercise of a just degree of prudence, requires indemnity. This hinders and embarrasses the creditor; and, indeed, he may not be able to give it, so that the fraudulent creditor and mortgagee keep him effectually at bay. If he succeeds in obtaining a levy and making a sale, he and all concerned are subject to an action at law by the mortgagee at any time he may elect within a series of years, during which the evidence to defeat the fraudulent claim may be lost, and the plaintiffs may be otherwise embarrassed and vexed in contending against the action. In case of a sale, the title is at best a disputed or disputable one, and the property is necessarily sold at a sacrifice, to the loss and injury of all concerned. It is the aspect of the case thus presented that renders the remedy at law practically and really inadequate, and gives a court of equity jurisdiction to cancel and set aside the fraudulent obstruction to the remedy the creditor has invoked. The remedy at law by seizure and sale of the property is not, it must be conceded, in such case, “ as practicable and efficient to the ends of just and its prompt administration as the remedy in equity.” This conclusion is indicated in the recent case of Pierstoff v. Jorges, 86 Wis. 128 , and upon full consideration we conclude that it is in accordance with sound principle and is essentially wise and just. By resorting to it, the controversy is speedily settled and put at rest as to ail claimants without unnecessary waste or sacrifice of property.

*26 As the court takes jurisdiction in this action to reach the moneys and choses in action of the defendant, and the objections raised by the demurrer have failed, it is justified, with all the parties before it, in adjudicating upon and granting relief, if the facts should warrant it, in respect to the chattel mortgage, as held in Pierstoff v. Jorges, supra, where the authorities are cited, although the execution has been returned. The more usual course, however, is to issue and deliver an execution to the sheriff, and then bring an equitable action in its aid.

It follows from these views that the order sustaining the demurrer, and the order vacating the injunction, must be reversed, and the cause remanded for further proceedings according to law.

By the Gourt.— Judgment is ordered accordingly.