CREDITORS' BILL. A bill in equity, filed by one or more creditors, for the purpose of collecting their debts out of assets, or under circumstances as to which an execution at law would not be available.
It is a proceeding in rem, to make effective a judgment against the debtor's property which is concealed ; Houghton & Co. v. Axels son, 64 Kan. 274, 67 Pac. 825. Such bills are usually filed by and on behalf of the complain ant and all other creditors who shall come in under the decree. They may be either against the debtor in his lifetime or for an account of the assets and a due settlement of the estate of a decedent.
They are divided by Bispham (Equity) into two classes, numbered in the order here stat ed. In bills of the second class, or those which in effect seek for the administration of a decedent's estate, the usual decree against the executor or administrator is quod com putet ; it directs the master to take the ac counts between the deceased and all his cred itors, and to cause the creditors, upon due public notice, to come before him to prove their debts, and to take an account of all the personal estate of the deceased in the hands of the executor or administrator, and the same to be applied in payment of the debts and other charges in a due course of administration ; 1 Story, Eq. Jur. 546.
Generally speaking, this jurisdiction has been transferred to probate courts in most of the states, but in some states the original jurisdiction of equity over the administration of estates remains unabridged by the stat utes and is concurrent with that of probate courts. See 3 Porn. Eq. Jur. § 1154.
Creditors' suits of the other class are brought while the debtor is living and for the collection of a debt against him. This jurisdiction had its origin in the inadequacy of common-law remedies by writs of exe cution. These writs at common law often did not extend to estates and interests which were equitable in their nature, and creditors' suits were therefore permitted to be brought where the relief at common law by execution was ineffectual, as for the discovery of as sets, to reach equitable and other interests not subject to levy and sale at law, and to set aside fraudulent conveyances.
Statutes in England and America have ex tended the common-law remedies and pro vided adequate legal relief in many cases where formerly a resort to equity was neces sary ; Porn. Eq. Jur. § 1415.
The jurisdiction of chancery in suits brought by judgment creditqrs to enforce the collection of their judgments, after having exhausted their remedy at law, although it may have previously existed, is in some states expressly declared and defined by stat utes.
Before a creditor can resort to the equi table estate of his debtor, he must first ob tain judgment and seek to collect the debt by execution ; exhausting his remedy at law; Scott v. Neely, 140 U. S. 106, 11 Sup. Ct. 712, 35 L. Ed. 358 ; Taylor v. Bowker, 111 Ti. S. 110, 4 Sup. Ct. 397, 28 L. Ed. 368 ; Newman v. Willetts, 52 Ill. 98 ; Lawson's Ex'r v. Grubbs's Adm'r, 44 Ga. 466 ; and it must appear that a judgment has been recovered, execu tion issued thereon and returned "nulla bo na;" Preston v. Colby, 117 Ill. 477, 4 N. E. 375 ; Taylor v. Bowker, 111 U. S. 110, 4 Sup. Ct. 397, 28 L. Ed. 368; but this rule is said to be too general ; 3 Porn. Eq. Jur. § 1415 ; it probably would not apply where the judgment was a lien ; id.; Fleming v. Graf ton, 54 Miss. 79 ; and in the federal court the objection that the claim has not been re duced to judgment can be raised only by de fendant and may be waived; Pennsylvania Steel Co. v. Ry. Co., 157 Fed. 440. A judg ment cannot be questioned upon a creditor's bill brought to secure its payment ; Matting ly v. Nye, 8 Wall. (U. S.) 370, 19 L. Ed. 380.
In a few jurisdictions the equitable rule has been changed by statute, so that suits to set aside fraudulent conveyances may be maintained by simple contract creditors; Builders' & Painters' Supply Co. v. Bank, 123 Ala. 203, 26 South. 311; Riggin v. Hil lard, 56 Ark. 476, 20 S. W. 402, 35 Am. St. Rep. 113 ; Huntington v. Jones, 72 Conn. 45, 43 Atl. 564 ; Phelps v. Smith, 116 Ind. 399, 17 N. E. 602, 19 N. E. 156 ; Balls v. Balls, 69 Md. 388, 16 Atl. 18 ; Sandford v. Wright, 164 Mass. 85, 41 N. E. 120 ; Dawson Bank v. Harris, 84 N. C. 206 ; Greene v. Starnes, 1 Heisk. (Tenn.) 582 ; Stovall v. Bank, 78 Va. 188 ; Frye v. Miley, 54 W. Va. 324, 46 S. E. 135. A judgment of a court of record is or dinarily sufficient ; Chalmers v. Sheehy, 132 Cal. 459, 64 Pac. 709, 84 Am. St. Rep. 62; Schaible v. Ardner, 98 Mich. 70, 56 N. W.