Sinclair v. Auxiliary Realty Co.

McSherry, C. J., delivered the opinion of the Court. The record in this case is exceedingly involved and complicated, though the questions which are ultimately raised are not difficult of solution. It will be necessary in order to clearly present these questions to state in as succinct a form as possible the various steps taken during the progress of the proceeding. On the 22nd of April, 1901, Annie E. Lampkin filed in the Circuit Court No. 2, of Baltimore, a bill of complaint against Elizabeth Smith and Frank St. Clair Smith.

Without now pausing to state the allegations of the bill, we need only say, that its object was to procure a decree vacating a deed made by Elizabeth Smith to Frank St. Clair Smith, upon the ground that it was a voluntary conveyance without consideration and was made in fraud of the rights of the plaintiff who was a creditor of the grantor. On the same day, that is, April 22nd, 1901, the defendant, Elizabeth Smith, filed an answer admitting the allegations of the bill but denying that there was an intent upon her part to defraud the plaintiff. On May the 28th of the same year, the other defendant, Frank St. Clair Smith, filed his answer, wherein he denied the indebtedness of his mother, Elizabeth Smith, to the plaintiff and wherein he demanded strict and full proof of every averment of the bill not expressly admitted by his answer. On October 17th, 1901, the defendant, Frank St. Clair Smith, filed a petition suggesting the death of the plaintiff and alleging that she departed this life on the 31st of the preceding month of May, and praying that the cause might be ordered abated on that account.

There is no copy of the docket entries to be found in the record. The next step taken in the cause, so far as the ²²⁶ record discloses, was a petition filed on February 14th, 1902, by one A. Leftwich Sinclair, of Washington, wherein it is alleged that the plaintiff had died, and that letters of administration upon her estate had been granted on the 10th of February, 1902, by the Supreme Court of the District of Columbia sitting as a probate Court, and praying that the petitioner as administrator might be made a party plaintiff to the cause.' Upon that petition, on the same day an order nisi was passed making Sinclair a party plaintiff as prayed, unless cause to the contrary should be shown before the 28th day of the same month, provided a copy of the petition and order were served on the defendants or their solicitors on or before the'18th of -February. No cause to the contrary having been shown, an order was passed on the 14th of October, 1902, making Sinclair á party plaintiff as prayed in.his petition of February 14th. In the meantime, however, it appears that on May the 22nd, 1902, the appellee in this cause, viz., the Auxiliary Realty Company of Baltimore, filed a petition in these proceedings wherein it was alleged: First, that by a deed dated March 19th, 1902, a certain George Wiegal conveyed the property involved in this controversy to the Realty Company; secondly, that Wiegal had acquired title to. this same property from Frank St. Clair Smith by deed dated January 3rd, 1902, and thirdly, that Wiegal had purchased from Frank Smith the property and paid therefor the sum of $2,600, subject to a $1 ,'itio mortgage, and that he had bought it in absolute good faith and without any knowledge of the pending proceeding, and that the Realty Company had likewise purchased the property from Wiegal in good' faith for value and without notice of the pendency of this suit.

The pétition concluded with a prayer asking that the Realty Company, being the actual person interested in the result of the suit, might be made a party defendant with leave to defend the same. On the same day an order of Court was passed granting the prayer of the petition and making the Realty Company a party defendant and giving it leave to defend. Nothing further seems to have been done until the 20th of November, 1902. On the 20th of November, 1902, ²²⁷ Sinclair, administrator, filed a petition wherein he alleged both the death of Elizabeth Smith and Frank St. Clair Smith and charged that both had died intestate and that no administration had been taken out on the-estate of either; that Elizabeth Smith, the mother of Frank St Clair Smith, having died first, the latter, her only child, became her sole heir at law and that by the death of Frank St. Clair Smith, his daughter and only child, Lilian St. Clair Brady, became his sole heir.

And the petition prayed that Lilian St Clair Brady might be brought in by subpoena as a party defendant to show cause if any she might have, why the relief prayed in the original bill of complaint should not be granted. On the same day an order was signed making the said Lilian St. Clair Brady a party defendant and directing that a subpoena issue as prayed. On January 8th, 1903, the Realty Company filed a petition asking to have the order of October 14th, 1902, and the order of November 20th revoked. The order of October 14th, it will be remembered, was the one by which Sinclair, as administrator, was made a party plaintiff to the_ suit in place of Lampkin, deceased; and the order of November 20th was the one by which Lilian St. Clair Brady was made a defendant in the cause.

On April 1st, 1903, the Court passed upon the petition of January 8th, 1903, and revoked the orders of October 14th and of November 20th, and dismissed the petitions on which those orders were passed, but dismissed them without prejudice to the right of Sinclair, administrator, to file an original bill or supplemental bill in the nature of a bill of revivor within thirty days from the date of the order. On the 12th of February, 1903, the Realty Company filed another motion asking that an entry should be made that the “case is terminated” and cannot be revived on the ground that it never was a lis pendens because Elizabeth Smith was never in Court and because the bill of complaint was defective, and for sundry other reasons. This motion seems to have come to a hearing on the 20th of May, 1903, upon which day the Court passed an order overruling the motion of February 12th, 1903, and modifying its antecedent order of April 1st, 1903, ²²⁸ to the extent of allowing Sinclair, administrator, to institute such further proceedings in this cause or by an original bill as he may desire for the revivor of this suit, provided such proceedings were instituted within fifteen days. The next step .taken in the casé appears to be a petition filed June ist, 1903, by Sinclair,-administrator, wherein much, if 'not all of the facts heretofore stated in this opinion are reiterated at length.

In addition to what has just been stated the petition alleged that 'the delay in procuring letters of administration on the estate of Annie E. Lampkin was due to litigation pending in the Probate Court of the District of Columbia, and that that litigation was not brought to a conclusion until February 7th-, 1902. Letters of administration upon her estate, as we have already stated, were issued on the 10th of February, 1902, and her administrator filed his petition to be made a party plaintiff on the 14th of February, 1902, as previously noted. The prayer of the petition of June ist, 1903, asked the .Court to make Sinclair a party plaintiff, a thing which had been already done on the -14th of October, 1902, and had then been undone on the -ist of April, 1903, and which had been again modified on the 20th of May followihg. On the 2nd of June, 1903, an order was passed making-Sinclair a party plaintiff and directing the Auxiliary Realty Company to proceed in the cause by demurrer, plea or answer to the' bill of complaint and to the petition of June ist, within twenty days from June 2nd. .

On June 15th, the Realty Company demurred to the original bill of complaint and to the petition of June ist, and for the cause of demurrer assigned thirteen reasons. These thirteen reasons or'causes may be reduced to five. First, that the allegations of the bill of complaint are insufficient as to parties. Second, that its allegations are insufficient as to the alleged debt.

Third, that the bill of complaint shows on its face a claim barred by limitations and laches. Fourth, that by the death of Elizabeth Smith any estate remaining in her if the deed were void, vested in her son and only heir, Frank .St. Clair Smith, and that thereby any right that may have existed in the plaintiff as a creditor of Elizabeth to have the ²²⁹ deed from Elizabeth Smith to Frank St. Clair Smith set aside did not survive; and Fifth, that both the bill of complaint and the petition of June ist, show on their face that the petitioner has been guilty of laches. This demurrer came on for hearing and on the 22nd day of September, 1903, it was adjudged and ordered by Circuit Court No. 2, that the demurrer be sus-, tained with the privilege to the petitioner, Sinclair, to amend-his proceedings as he may be advised, within fifteen days. On. the 22nd of October, 1903, an appeal was taken from the-order of September 22nd.

Thus the questions brought up, for review are the ones we have just stated as arising on the demurrer. And these questions thus raised by the demurrer will now be considered in the order in which they have been stated. First. The allegations of the bill of complaint, it is contended, are insufficient as to parties.

This objection has relation to the bill of complaint and to no subsequent petition.or motion. The bill was filed by a person claiming to be a creditor of Elizabeth Smith and the defendants were the alleged debtor, Elizabeth Smith and her son, the grantee in the deed which the bill assailed; In suits to vacate deeds for fraud against creditors all the parties to the deed are in general necessary parties to the cause. Thus the grantor must be mad© a party defendant as well on account of the fraud charged as because of the title remaining in him for the benefit of creditors * * * * So also the grantee or grantees in such a deed must be parties as having an interest to sustain the conveyance. Miller’s Equity, sec. 55, and cases cited in notes one and five.

At the time the bill was filed both the grantor, and the grantee were alive and both were made parties and answered the bill. There were no other persons interested in-the property or the controversy who should have been mad© parties. Without further comment we hold that the objection as to the insufficiency of parties is untenable. Secotid.

The objection that the allegations of the bill are insufficient as to the alleged debt is equally without foundation.. The bill avers that Elizabeth Smith became indebted to the. ²³⁰ plaintiff on the first day of January, 1885, in the sum of $1,200, “which indebtedness, with the interest thereon still remains unpaid and unsatisfied.” This is a clear allegation of an existing indebtedness, and that is all that need be averred. There must always, in cases of this character, be a distinct allegation of an existing indebtedness, but there is no necessity for setting out the evidence by which that indebtedness may be proved. Prior to the Act of 1835, ch. 380, it was necessary for a creditor to reduce his claim to a judgment before proceeding in Chancery to vacate a fraudulent conveyance made by his debtor.

But since that Act, which is now incorporated in sec. 46 of Art. 16 of the Code, it is not required in any case where a proceeding in equity is invoked, to vacate a conveyance because fraudulent against creditors, for the creditor to have obtained a judgment at law on his demand in order to secure the relief sought in equity. Of course, before relief can be granted, the claim or demand must be established by proof; but there is no rule of equity pleading which requires that the cause of action or the evidence of it should be specifically set out in the bill of complaint. McDowell v. Goldsmith, 6 Md. 319 . Third.

The objection that the bill of complaint shows on its face a claim barred by limitation and laches cannot prevail. It is true that in the first paragraph of the bill it is averred that Elizabeth Smith became indebted to the plaintiff in 1885, or more than sixteen years before the bill of complaint was filed, but it is nowhere charged, nor does it appear on the face of the bill, that the indebtedness which then was incurred was due and payable at that time. In other words, it does not affirmatively appear that a right of action accrued to the-plaintiff more than three years before the filing of the bill. As the bill does not disclose that the right to-sue upon the indebtedness alleged to have been contracted in 1885, had accrued more than three years before the filing of the bill, the objection that thé claim is barred by limitation is not presented on the face of the proceedings and therefore cannot be availed of by demurrer.

This objection therefore cannot avail. ²³¹ Fourth. The theory upon which the fourth objection rests is this: Conceding, as the demurrer does, that Elizabeth Smith fraudulently conveyed the property to her son, still, though she was a necessary party defendant in a proceeding instituted to vacate that conveyance, her death caused whatever interest she had in the property to vest in her son, the grantee, and that he being her sole heir at law took title to the property by inheritance and not by the conveyance and that therefore her death abated the suit at once. In other words, where a fraudulent grantee is the heir at law of the fraudulent grantor and a bill is filed during the life of both by a creditor of the latter to have the fraudulent conveyance annulled, the death of the grantor irretrievably abates the suit because the grantee then takes as heir at law and not as fraudulent grantee. This is rather a novel proposition especially m the teeth of sec. 1, Art. 16 of the Code, which provides that no suit in Chancery shall abate by the death of any of the parties in a case where the rights involved in the suit survive.

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