Page:Federal Reporter, 1st Series, Volume 9.djvu/111

96 PEDEBAL KEPORTEK. �or any of them might, but for the bankruptcy, have thereafter ac- quired the right to bring. �After bankruptcy no further proceedings at law, such as reeovery of judgment and return of execution unsatisfied, are, on principle, necessary to sustain an action to reach equitable assets, for there is no fund or property of the debtor which can, by any possibility, be made available upon execution. When all remedy at law is ex- hausted, the right to equitable relief arises. But by the assignment in bankruptcy all remedy of the creditor at law is ipso facto exhausted. AU the debtor's property is thereupon vested by law in the assignee, and no subsequent judgment or execution can touch it. To procure judgment and execution to be returned thereon, even if not stayed by law, would be mere idle ceremonies. The situation is analogous to that of the estate of deceased persons, where the debtor's property is by law distributable to creditors pro rata, and not subject to any lien upon an after-acquired judgment. In such cases it bas long been settled that a creditor at large may maintain a suit in equity to reach assets fraudulently disposed of by the deceased debtor without the ordinary prerequisites of judgment and execution returned unsatis- fied, which in such cases would be wholly useless and unmeaning. Story, Eq. PI. § 514; Loomis v. Tifft, 16 Barb. 5el; Alsager v. Bowley, 6 Ves. 748; Doran v. Simpson, 4 Ves. 651. By section 5046 of the Revised Statutes, moreover, "all the property conveyed by the bank- rupt in fraud of his creditors is vested in his assignee." This lan- guage is not to be limited to technical conveyances of real estate, but is, I think, intended to embrace every species of property or means of the debtor transferred or disposed of by him in any manner which by the law of the time and place of the transaction is fraudulent as to creditors. It includes moneys of the debtor paid for property con- veyed to his wife by his procurement, or improvements made by him upon her lots, whenever either is in fraud of creditors. AU such property thus vested in the assignee he must have the legal right to recover by any appropriate legal proceeding, so long as, and to the same extent to which, the creditors defrauded might, but for the bank- ruptcy, have entitled themselves to recover it. In re Leland, 10 Blatchf. 503, 507, 508. �Moreover, Littlefield could acquire no lien on the property in question until the filing of his bill in equity. Clarke v. Rist, 3 Mc- Lean, 494; Storm v. Waddell, 2 Sandf. Ch. 494; Ocean Nat. Bank v. Olcutt, 46 N. y. 12. ��� �