
    MEHLER v. CORNWELL.
    Equity Practice; Judgment Creditor’s Bills.
    1. The jurisdiction of a court of equity in a judgment creditor’s suit, cannot be defeated by showing that the writ of execution on the judgment was returned nulla bona, before the return day of the writ, by order of the attorney of the party causing the writ to be issued, especially where the evidence shows that there was no property upon which a levy could have been made.
    2. And it is doubtful whether when a judgment debtor is unquestionably insolvent and has no property out of which the judgment can be satisfied, the issue of execution is a prerequisite to equitable interference.
    No. 247.
    Submitted January 19, 1894.
    Decided April 2, 1894.
    Hearing on an appeal by the defendants from a decree of the Supreme Court of the District of Columbia, holding an equity term, in a suit to set aside alleged fraudulent conveyances.
    
      Affirmed.
    
    The Court in its opinion stated the case as follows:
    The original bill in this cause was filed July io, 1889, in the Supreme Court of the District of Columbia by G. G. Cornwell & Son, to set aside certain conveyances made by their debtors, Solari Bros., of personal property, as well as certain trust deeds thereon, on the ground that they were made to defraud creditors. In addition to the prayer to set aside these conveyances, the complainants asked for the appointment of a receiver pendente lite. . This prayer was refused upon hearing. On February 21, 1890, the complainants filed an amended and supplemental bill, from which the following statement is condensed:
    Camille Solari, Jr., and Joseph Solari composed the firm of Solari Bros., who, on December xi, 1883, purchased of Charles Losekam the stock, fixtures, etc., of a restaurant called the “Maison Doree,” at 1409 and 1411 Pennsylvania avenue, in the city of Washington, for the sum of $10,000. About June 13, 1885, Solari Bros, bought of Duffy & Lear-marda the goods, chattels, furniture, etc., in the house adjoining them, for $9,000, of which sum $7,000 was secured by a trust deed made to Daniel Loughran, trustee, which was duly recorded.
    October 28, 1886, Solari Bros, borrowed $10,000 of White, Hentz & Co., who are defendants in the bill, for which they executed fifty notes for $200 each; said notes were made payable two in each month, commencing with November 25, 1886, and bore six per cent, interest. They were secured by a deed of trust made to Herman A. Selig-son and E. H. Thomas, trustees, covering all the partnership property of Solari Bros., including the leases of the buildings occupied .by them in their business. Four thousand three hundred and twenty-eight dollars and twenty-eight cents of this loan were used to pay off the balance due upon the trust aforesaid to D. Loughran, which was thereby discharged; the remainder was used by Solari Bros, in their business. It is alleged that all, or nearly all, of this debt has been paid, and White, Hentz & Co., Seligson, trustee, the Solaris and Joseph Mehler are called upon to make a complete discovery and give a detailed account of the said indebtedness, payments thereon, balance due, etc., and that Joseph Solari died about December 16, 1886, in Europe, testate, but his will has been secreted and withheld from probate, and no letters of administration have ever been had on his estate, and Camille Solari, Jr., has converted all the partnership assets to his own use in fraud of creditors.
    . Complainants were, on September 20, 1886, creditors of the firm of Solari Bros, in'the sum of about $4,579.73, which indebtedness was sued upon, and on May 25, 1889, converted into a judgment against Camille Solari, Jr., surviving partner, etc., with interest and costs, in the Supreme Court of the District of Columbia. Execution issued on this judgment June 20, 1889, and was returned unsatisfied July 3, 1889, in obedience to the order of plaintiffs’ attorney indorsed thereon as follows: “ Please return this writ, as there is no property subject to levy.” Camille Solari, Jr., is insolvent, and has no property of any kind subject to execution,, and he has, with the connivance and assistance of his father, Camille Solari, Sr., his brother, Edmund Solari and Joseph Mehler (all of whom are made defendants) so secreted, used and wasted the assets of Solari Bros, that no execution can reach them. The deed of trust to secure defendants White, Hentz & Co. also prevents the levy of execution at law upon the effects of the said late co-partnership. A few days after the death of Joseph Solari, to wit, December 30, 1886, Edmund A. Solari, at the instance of his brother, Camille Solari, Jr., and in order to defraud creditors of Solari Bros., brought suit at law to recover an alleged indebtedness of $3,650 against said firm. Service was had on Camille So-lari, Jr., of the writ of summons issued against him, and against Joseph Solari (as if he were then living), and the same was returned February 1, 1887. On January 4, 1887, Camille Solari, Jr., confessed judgment against Solari Bros, for $3,650 and costs of suit.
    On June 2, 1887, Camille Solari, Jr., conveyed all the assets of said Solari Bros, to Charles S. Moore and Thos. M. Fields, trustees, to secure the payment of said judgment on or before July 5, 1889. On the same day, also, Camille Solari, Jr., conveyed all the property aforesaid to said Edmund Solari, the same being worth about $20,000, in order to defraud the creditors of Solari Bros. The death of Joseph Solari was kept carefully concealed all this time. Camille Solari, Jr., continued to reside on the premises, and manage and control the'business as before, with the sole exception that license was taken out in the name of Edmund Solari, though for the use and benefit of Camille Solari, Jr. No other change took place unt'il October, 1888, not long before the license expired. The Commissioners refused to grant another license to Edmund Solari, and refused a second application made in his name by Camille Solari, Jr. Another change then became necessary, and to further continue the fraud and deceit practiced upon the creditors aforesaid, Camille Solari, Jr., caused the said Edmund to make a conveyance to Camille Solari, Sr., the father of Camille, Jr. This was wholly without consideration, and the said Camille So-lari, Sr., was wholly insolvent. Application was then made for license in the name of said Camille Solari, Sr., which was refused. The said Camille Solari, Jr., being unable to carry on the business in his own name on account of the claims of said creditors,' and license being necessary to a continuation of the business in any one’s name, procured the services of defendant Joseph Mehler, then a waiter in Delmonico’s restaurant, in New York, and employed him as his agent to carry on said business. On December 31, 1888, to give color to the transaction and continue the fraud, etc., and upon an alleged consideration of $22,000, which was never paid, in whole or in part, the property was conveyed to said Joseph Mehler, who was also insolvent. A deed of trust was first placed upon the property to secure a pretended debt of $14,-000 by Camille Solari, Sr., to Edmund Solari. Another trust deed was made to H. A. Seligson, trustee, by Mehler to secure a pretended debt of $16,400 to Camille Solari, Sr. The notes given were made payable to Joseph Mehler’s order, and by him indorsed and delivered to Camille Solari, Jr., who kept them as his own, save and except one for $2,500 delivered .to White, Hentz & Co., and one for $780, given for rent on the premises. Notwithstanding this sale and conveyance, Camille Solari, Jr., continued to control and manage the business as his own, and in fraud of the creditors of Solari Bros.
    There are other allegations respecting the leases of the property, certain surrenders thereof, etc., which are of no importance in the case as it now stands. It is also alleged that since the institution of the suit the said Camille Solari, Jr., has caused said Mehler to execute a trust deed to defendant Thos. M. Fields, trustee, to secure P. H. McLaughlin & Co. in a debt incurred in building and making certain improvements in the buildings occupied by said business. These parties are also made defendants in the supplemental bill.
    The substance of the answers need not be stated. It is sufficient to say that they put in issue the material allegations of the bill. The answer of Edmund Solari, and a special plea by White, Hentz & Co., set out the fact of the issue of the execution on the judgment of complainants against Camille Solari, Jr., surviving partner, etc., its return within thirteen days by order of plaintiffs’ attorney, and deny the jurisdiction of the court of equity to entertain the bill, which was filed after the return of the execution, but before the expiration of sixty days from the date of its issuance. ■
    July 15, 1890, complainants prayed for a rule on Herman A. Seligson, trustee, to show cause why he should not make to the court a detailed report and account of the sale of the aforesaid property, and deposit the proceeds in the registry of the court. The petition for the rule alleges that said trustee, upon the demand of White, Hentz & Co., had sold the property in controversy, under the deed of trust to him aforesaid, partly for cash and partly upon credit, and that over and above the $2,000 due White, Hentz & Co., the remainder of the purchase money was liable to their claims, etc. In response to the rule aforesaid, said Seligson answered, giving a report of the sale, and attaching an account thereof, which shows the receipt of $4,650 in cash and two notes for $2,325 each. He credits himself with certain items of cost and expenditure, including $2,199 paid White, Hentz & Co. in full of principal and interest due them, under the original trust deed to secure the loan made by them, by virtue of which the sale was made. The expenditures exceeded the cash in hand $58.43, and in addition the trustee claimed-$75 due on account of a gas bill.
    July 25, 1890, Seligson was ordered to deposit the notes in the registry of the court. One of said notes has since been collected, and the controversy now is with respect to the proceeds thereof and the second note which has not been collected.
    Upon the taking of complainants’ testimony, the defendants moved the court to order the examiner to close and return the testimony taken, and for an order to show cause why the bill should not be dismissed on account of the insufficiency of the testimony to sustain the allegations thereof. This motion to dismiss was overruled May 4, 1893, and on May 25 the solicitor for the defendants ordered the cause to be placed on the calendar for hearing at the next special term “ upon the bill, answers, complainants’ testimony, and record and proceedings, reserving the right to make application, as they may be advised hereafter, for leave to take testimony on their behalf.” On June 16, they moved the court to grant leave to take testimony on their behalf, which was refused. June 17, the cause was heard, and a final decree passed sustaining the bill and ordering the payment of the funds in the registry of the court to the complainants.
    From this decree the defendants, Joseph Mehler, White, Hentz & Co., and Thomas M. Fields, have appealed.
    
      Mr. Thomas M. Fields for the appellants.
    
      Mr. Henry Wise Garnett and Mr. Edward H. Thomas for the appellees.
   Mr. Justice Shepard

delivered the opinion of the Court:

1. As we have seen, the execution issued upon complainants’ judgment was returned by the marshal, upon the order of their attorney, within thirteen days from its date, and the bill was filed within seven days thereafter. The writ was, upon its face, returnable “within sixty days,” as provided in the rules of the Supreme Court of the District of Columbia in force at that time.

•Defendants’ objection to the jurisdiction is based upon the contention that the right to file a creditor’s bill depends upon the return of an execution nulla bona, on, and not before, the return day thereof, and that such return must be wholly upon the official responsibility of the marshal, and not upon the order of the plaintiff in the writ.

The insolvency of Solari Bros, has never been denied; nor is it questioned that the only property in which they had an interest passed into the nominal possession and ownership of Edmund Solari, Camille Solari, Sr., and Joseph Mehler, successively, under the conveyances alleged in the bill, and that all of it which remains is sought to be subjected to the partial satisfaction of complainants’ judgment. Under these circumstances the retention of the execution by the marshal for the full period of sixty days, coupled with the closest search for property to levy it upon, would have served no practical or useful purpose. We can, therefore, see no imperative necessity for the issuance of an execution at all, and none whatever for its being held by the marshal until its last return day.

“ The rule is a familiar one, that a court of equity will not entertain a case for relief where the complainant has an adequate legal remedy. The complaining party must, therefore, show that he has done all that he could do at law to obtain his rights. But, after all the judgment and fruitless execution are only evidence that his legal remedies have been exhausted, or that he is without remedy at law. They are not the only possible means of proof. The necessity of resort to a court of equity may be made otherwise to appear. Accordingly the rule, though general, is not without many exceptions. Neither law nor equity requires a meaningless form. ‘ Bona sed impossibilia non cogit lex.’ It has been decided that where it appears by the bill that the debtor is insolvent, and that the issuing of an execution would be of no practical utility, the issue of an execution is not a necessary prerequisite to equitable interference” Case v. Beauregard, 101 U. S., 690. See also 2 Beach Eq. Jur., Sec. 894.

The right to ask equitable relief in this case, however, does not depend upon the soundness of the exception above stated, for an execution was in fact issued and returned unsatisfied, although within a few days after its issue. In Forbes v. Waller, 25 N. Y., 430, the execution issued June 2 and was returned June 9, by the order of plaintiff’s attorney, for the reason that there was no property that could be seized thereunder; and the court sustained the right to file the bill. As regards the manner in which the return was made, the court said: “That the return has been made by the sheriff at the request of the plaintiff does not affect the ulterior proceedings by action, unless the debtor has property which could be reached by execution.” The return is unquestionably good, at least until its verity shall have been' impeached; and it is not clear that it could be impeached at all, except in a direct proceeding for that purpose. Smith v. Gaines, 93 U. S. 343.

That a creditor’s bill could be maintained upon the return of an execution before its regular return period had expired, has been expressly held by the Supreme Court of this District, in Barth v. Heider, 7 D. C., 71, decided in 1870. In that case, the execution was returned within six days after its date; and the practice authorized by it has been upheld in several decisions by the general term which have not been reported.

We are of the opinion that the objection to the jurisdiction is not well taken.

2. It would be unnecessary comsumption of time, and would serve no useful purpose, to review here the mass of testimony taken in this case. We could add nothing to the opinion delivered by the Chief Justice of the Supreme Court of the District of Columbia on the hearing below. Like him we can come to no other conclusion than that there was no valid foundation for the claim upon which the judgment in favor of Edmund Solari was confessed; that it was devised for the purpose of defrauding the creditors of Solari Bros., and that the subsequent conveyances and encumbrances were made in further execution of the same design. It is unnecessary to consider the objections made to certain testimony offered on behalf of complainants, for rejecting it all, our conclusion is the same.

3. With respect to the claim of White, Hentz & Co., we think it clear that they were entitled only to the payment of the balance due upon the trust deed made by Solari Bros, to secure the $10,000 advanced by them. In obedience to their demand, the trustee in said instrument, Herman A. Seligson, sold out the property at public sale pending the litigation. In answer to the rule made on him to account for the proceeds of said sale, he rendered an account crediting himself with the payment of the balance due them, with interest to date. They, as well as the complainants, acquiesced in the truthfulness of this report and account. The balance remaining in his hands was ordered deposited in the registry of the court. White, Hentz &.Co. asked for no order with respect to the part of the proceeds of said sale which was recognized as due them. Whether the trustee ever in fact paid them the money, which they now deny, cannot affect the subsequent proceedings. After his.report and payment of the remainder of the proceeds into court, he was no longer a necessary party to the cause, and therefore, upon his death, it was not necessary that his representatives should be made parties.

4. The deed of trust to secure the debt of P. H. McLaughlin & Co. necessarily falls with the title of Mehler, the maker thereof. These parties dealt with the parties and the property pending the litigation, on peril of a successful result to the complainants, and have nothing to complain of but their own want of care, and their too great confidence in the cause of the defendants. Union Trust Co. v. Southern Nav. Co., 130 U. S., 565.

5. So far,as the appellants are concerned, they have no reason or right to complain that the cause was not referred to the auditor before the final decree of distribution of the fund.

Complainants’ debt largely exceeds the amount of the fund in the registry of the court. There is nothing else left. No other creditors of Solari Bros, are before the court complaining of the disposition made of the fund. Even if this disposition were erroneous, or unfair to other creditors, the appellants have no interest that can, in the remotest degree, be affected thereby.

It follows from what has been said that the decree appealed from must be affirmed, with costs ; and it is so ordered.  