NATIONAL TUBE WORKS COMPANY
v.
BALLOU

U.S. | 1892-12-19
No. 70
146 U.S. 517 Supreme Court of the United States (1892) Negative Treatment
Also reported at: 36 L. Ed. 1070 · 13 S. Ct. 165 · 1892 U.S. LEXIS 2214 · SCDB 1892-044
Cited by 43 cases

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Synopsis

National Tube Works Company obtained a judgment against a corporation in Connecticut and sought to enforce it through an equitable creditor's bill in federal court in New York, but the Supreme Court affirmed the dismissal of the bill because it failed to allege either a judgment and unsatisfied execution in New York or facts showing such relief was impossible to obtain there. The Court held that a creditor's bill to reach a debtor's equitable interests must demonstrate exhaustion of legal remedies in the jurisdiction where the equity suit is filed, unless circumstances make such exhaustion impossible.

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Opinion of the Court
Mr. Justice Blatchfokd,

Mr. Justice Blatchfokd,

after stating the case, delivered the opinion of the court.

' In his opinion in the' case, Judge Wallace states that he sustains the demurrer on the authority of his decisions in Claflin v. McDermott, 20 Blatchford, 522, 12 Fed. Rep. 375; and Walser v. Seligman, 21 Blatchford, 130, 13 Fed. Rep. 415; that he feels free to say that he doubts whether those cases did not adopt too technical a view of the right of a creditor, whose judgment has been obtained against his debtor at the place of the latter’s domicil, and whose execution has been issued there and returned unsatisfied, to maintain a creditor’s bill in a court of another State; and that he ihay be permitted to express the hope that the present case-may be taken to this court for review.

In Claflin v. McDermott, supra, it was held, that a creditors bill, founded on a judgment recovered against a debtor in a state court in California, would not lie in a Circuit Court of the United States in New York, to set aside a fraudulent transfer of personal property made by the debtor in California, by means of collusive judgments and sales under executions issued thereon, no judgment having been obtained or execution issued in such Circuit Court or in_any state court of New York. The-case of Tarbell v. Griggs, 3 Paige, 207, was cited as authority , where the Court of Chancery of the State of New York refused jurisdiction -of a creditor’s bill filed, to obtain satisfaction of a judgment rendered in the Circuit Court of the United States for the Southern District of New York, and upon which an execution had been returned unsatisfied, the judgment being treated as á foreign judgment and as standing on the same footing with the judgments of a court of another State. The principle invoked was, that the plaintiff’s remedy at law had not been exhausted by the issuing and return of an execution on a foreign judgment; and McElmoyle v. Cohen, 13 Pet. 312, was referred to as authority.

In Walser v. Seligman, supra, creditors and stockholders of a corporation organized under the laws of Missouri and Kansas brought a suit in equity, in the Circuit Court of the United States for the Southern District of New York, against certain persons, to enforce the liability of the latter as holders of a number of shares of unpaid capital stock of the corporation, without the corporation being made a party to the suit, and without the plaintiffs being judgment creditors elsewhere than in Missouri; and the court held that, the plaintiffs being merely creditors-at-large, and not having exhausted their remedy at law, in New York, and the Missouri judgments not having in New York the force of domestic judgments, except for the purpose of evidence, the. bill would not lie.

The bill in the present case is-defective in that respect. It alleges only the recovery of a judgment against the corporation-in Connecticut, and the issuing and return there of an execution unsatisfied. It does not allege any judgment in New York or any effort to obtain one, nor does it aver that it is impossible to obtain one. It alleges merely that the corporation has no fund or assets wherewith to pay the claim of the plaintiff.

Where it is sought by equitable process to reach equitable interests of a debtor, the bill, unless otherwise provided by statute, must'set forth a judgment in the jurisdiction where the suit in equity is brought, the issuing of an execution thereon, and its return unsatisfied, or must make -allegations showing that it is impossible to obtain such a judgment in any court within such jurisdiction. Taylor v. Bowker, 111 U. S. 110; Webster v. Clark, 25 Maine, 313; Parish v. Lewis, Freeman’s Ch. 299; Brinkerhoff v. Brown, 4 Johns. Ch. 671; Dunlevy v. Tallmadge, 32 N. Y. 457; Terry v. Anderson, 95 U. S. 628; Smith v. Railroad Co., 99 U. S. 398, 401; Hawkins v. Glenn, 131 U. S. 319, 334; McLure v. Benini, 2 Ired. Eq. 513, 519 ; Farned v. Harris, 11 Sm. & Marsh. 366, 371, 372; Patterson v. Lynde, 112 Illinois, 196.

Decree affirmed.'

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Citator

Cited By (14 total)

  • Straton v. New in Bankruptcy, 283 U.S. 318 (U.S. 1931)
    …o make available to a judgment creditor assets which could not be-reached by an execution at law. Jones v. Green, 1 Wall. 330; Dunphy [*330] v. Kleinschmidt, 11 Wall. 610, 614; Taylor v. Bowker, 111 U. S. 110, 116; National Tube Works Co. v. Ballou, 146 U. S. 517. The bill in this case assumes the existence of the lien on the property and is a mere measure to enforce it. Code 1860, c. 178; Acts 1882, c. 142; 1899, c. 49; 1903, c. 15; 1915, c. 76. Code 1923, c. 132; Code 1931, c. 55, art. 12. . See In re McG…
  • The Pusey & Jones Co. v. Hanssen, 261 U.S. 491 (U.S. 1923)
    …a judgment recovered at law has been returned unsatisfied he may proceed in equity by a creditor’s bill. Hollins v. Brierfield Coal & Iron Co., 150 U. S. 371; Compare Swan Land & Cattle Co. v. Frank, 148 U. S. 603; National Tube Works Co. v. Ballou, 146 U. S. 517; Pierce v. United States, 255 U. S. 398, 403. He may, by such a bill, remove any obstacle to satisfying his éxecution at law; or may reach assets equitable in their nature; or he may provisionally protect his debtor’s property from misappropriation…
  • Hollins v. Brierfield Coal & Iron Co., 150 U.S. 371 (U.S. 1893)
    …literated by state legislation. . Scott v. Neely, 140 U. S. 106; Cates v. Allen, 149 U. S. 451. Nor is it otherwise iñ cáse the debtor is a corporation, and an unpaid stock subscription is sought to be reached. National Tube Works Company v. Ballou, 146 U. S. 517; Swan Land & Cattle Company v. Frank, 148 U. S, 603, 612. Nor is this rule changed by the fact that the suit is brought in a court in which at the time is pending another suit for the foreclosure of a mortgage or trust'deed upon the property of the…

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