Heyneman v. Dannenberg

The opinion of the Court was delivered by Mr. Chief Justice Murray. Mr. Justice Terry concurred.

It is a general rule, that a Court of Equity will not take jurisdiction of a controversy, if the parties have an adequate remedy at law, and in accordance with this rule, Courts of Chancery have repeatedly refused to interfere at the instance of a creditor, and set aside fraudulent conveyances of the debtor’s property, until the creditor has first exhausted his remedy by judgment, execution, aud return of nulla bona.

For aught the Court might know, the claim might be illegal, or there might be sufficient property of the debtor to satisfy the judgment, aside from that fraudulently transferred. The modern decisions of some of the Courts of the United States, seem, however, to have relaxed the severity of the English' rule, and in some cases it has been held that a creditor who has acquired a lien under the attachment laws of a State may apply to a Court of Chancery without first proceeding to judgment.

Without expressing any preference for the modem doctrine, we are satisfied that the facts and circumstances of this case take it out of the ancient rule. The debt and insolvency of the defendant, as well as every other material allegation of the bill, except that of fraud, are confessed by the answer; and it would be requiring the plain tiffs to do a vain act, if they should be compelled to await, their judgment at law, and a return of execution, when it is acknowledged that, the only effect would be a return of nulla bona, and that the property, which they have attached in the mean time, would have passed into the hands of bona fide purchasers under color of a judicial sale, and be lost to them forever. Fraud is one of the primary subjects of equity jurisdiction, and it is not to be supposed that a Court, of Chancery would refuse to entertain jurisdiction in a case like the present, where ike sole issue was one of fraud, and where by such refusal the fraud complained of would be most successfully consummated.

Several errors have been assigned upon the admission of testimony on the trial below, but on examination we are satisfied that Dannenberg was sufficiently identified with the transaction to render such evidence competent. The refusal to admit the books of Dannenberg, in my opinion, was proper, as I do not think there was a sufficient predicate laid; but even allowing they should have been admitted, it could not have warranted a different verdict, or changed our opinion, sitting as a Court of Chancery, upon the character of the transaction, which was, as it most fully appears from the testimony, a gross and outrageous conspiracy and swindle.

Judgment affirmed.