APPEAL from the Circuit Court of Cook County; the Hon. F.
EMMETT MORRISSEY, Judge, presiding.
MR. PRESIDING JUSTICE DOWNING DELIVERED THE OPINION OF THE COURT:
Plaintiff brought an action in the nature of a creditor's bill *fn1 against defendant, Nursery Identi-Foto, Inc., an Illinois corporation engaged in the business of photographing newborn babies throughout the United States (NIF-I), seeking to satisfy a judgment in the amount of $26,948.55 and costs, obtained by plaintiff against defendant Norman Zaltsman (Zaltsman), his judgment debtor. The trial court granted defendant NIF-I's motion to strike plaintiff's amended complaint and dismissed the cause with prejudice. *fn2 Plaintiff appeals from that dismissal, questioning the propriety of the trial court's action.
Plaintiff's alleged cause of action, as determined from the pleadings on file, arose as the result of a series of 1968 and 1969 transactions wherein the two owners of 100% of the stock of NIF-I entered into agreements with Zaltsman whereby the latter would acquire ownership of NIF-I. On October 1, 1968, Zaltsman induced plaintiff to purchase, for $20,000, four subordinated convertible debentures of Nursery Identi-Foto, Inc. of Missouri (NIF-M). This $20,000 was used by Zaltsman as partial payment towards his purchase of some of the stock of NIF-I. As a result of a written agreement amongst the involved parties, NIF-I was to reacquire that portion of its own stock Zaltsman had contracted to purchase, a debt of $27,000 due NIF-I from Zaltsman was cancelled, a debt from Zaltsman to a bank was paid, and the parties mutually agreed to release each other from any and all claims owed to one another. The effect of this agreement was that NIF-I assumed $125,438 of Zaltsman's debts in exchange for a 45% interest in NIF-I for which he had made a partial payment of $125,000.
In April, 1970, plaintiff commenced an action (70CH1718) in the circuit court of Cook County against Zaltsman, defendant NIF-I, NIF-M, and others, seeking the return of $20,000 plus punitive damages and certain other relief. In his second amended complaint, plaintiff set forth the foregoing transactions and prayed for the recovery of the $20,000 he had loaned to Zaltsman, an accounting, and other relief, claiming he was induced to pay the $20,000 on certain alleged false representations of Zaltsman resulting in the establishment of an equitable trust against NIF-I in the stock it had acquired as a result of the March, 1970, agreement. The essence of plaintiff's claim against Zaltsman was that, in agreeing to purchase the debentures, plaintiff had relied upon false and fraudulent representations made by Zaltsman. Although he alleged that the other defendants had knowledge that plaintiff's $20,000 had been made part of Zaltsman's partial payment for the 45% interest, nowhere in the complaint does plaintiff allege that the defendants were aware of or had knowledge of Zaltsman's alleged representations to plaintiff.
Zaltsman failed to appear in the 70CH1718 suit and, on July 12, 1971, the trial court entered an ex parte judgment against him for $20,448.65 actual and $5,000 punitive damages, and provided that execution on the judgments issue forthwith. As to the remaining defendants, upon their motion, the trial court ordered the second amended complaint stricken and dismissed as to them with prejudice. Plaintiff took no appeal from this order.
In February, 1973, plaintiff initiated the action giving rise to the instant appeal. Plaintiff, in his first complaint against NIF-I, premised his action on a statute (Ill. Rev. Stat. 1973, ch. 22, par. 49) which, in pertinent part, states that when an execution on a judgment is returned unsatisfied, the unsatisfied party may:
"[F]ile a complaint against such defendant, and any other person, to compel the discovery * * * of any property, money, or thing in action due to him, or held in trust for him, and to prevent the transfer of any such property, money or thing in action, or the payment or delivery thereof to the defendant * * *."
Plaintiff alleged that he had obtained a judgment against Zaltsman in the amount of $26,948.65 which was unpaid; that NIF-I was indebted to Zaltsman for $66,074.34 in that the stock it received was worth $180,000 and defendant only paid $113,925.66 (the debt to the bank having been discounted); and that plaintiff's judgments should be paid out of this difference.
Defendant made a motion to strike the complaint in that the judgment entered in the 70CH1718 action acts as a bar to the current suit and that the complaint failed to state a cause of action. This latter allegation was based on the fact that the alleged transactions were concluded by agreement of the parties supported by sufficient consideration such that the judgment debtor has no claim thus negating the judgment creditor's claim against the defendant NIF-I. The trial court granted NIF-I's motion and dismissed the cause with prejudice. Although Zaltsman was named as a co-defendant in the amended complaint, the record on file in this court does not indicate either service on Zaltsman or his appearance.
• 1 In order to maintain an action in the nature of a creditor's bill, the plaintiff must have exhausted his legal remedies. (Gore v. Kramer (1886), 117 Ill. 176, 183, 7 N.E. 504.) Accordingly, the creditor must reduce his claim to judgment. (Dunham v. Kauffman (1943), 385 Ill. 79, 84, 52 N.E.2d 143, rehearing denied (1944); Birney v. Solomon (1932), 348 Ill. 410, 413-14, 181 N.E. 318, rehearing denied; Thomas v. Kowalewski (1st Dist. 1956), 12 Ill. App.2d 283, 288, 139 N.E.2d 604, rehearing denied (1957), rev'd on other grounds, Thomas v. Richards (1958), 13 Ill.2d 311, 148 N.E.2d 740.) In order to seek equitable relief, it must also appear that execution has issued on the judgment and has been returned unsatisfied in whole or in part. (Dunham; Birney; Wottas v. Rachel (1st Dist. 1932), 267 Ill. App. 148, 154.) Finally, it must appear that the judgment debtor possesses a present, fixed right to recover the property in issue in an action in his own name since a judgment creditor, in filing his complaint, obtains no greater rights to the property in issue than the judgment debtor himself. Tumy v. Mayer (1919), 289 Ill. 458, 460, 124 N.E. 661; Bonte v. Cooper (1878), 90 Ill. 440, 444; People ex rel. Russel v. Michigan Avenue Trust Co. (1st Dist. 1924), 232 Ill. App. 456, 458.
In the case at bar, plaintiff's amended complaint satisfies these requirements to the extent that he alleges the existence of a judgment and the return of execution upon that judgment unsatisfied. The complaint is deficient, however, in failing to allege any facts demonstrating that Zaltsman has a present right to maintain an action against NIF-I to recover the monies plaintiff claims NIF-I owes to defendant Zaltsman. On the contrary, the facts of the case as previously determined in the prior suit, and in the complaint in the present suit, clearly indicate that Zaltsman has no such fixed right since, as part of the March, 1970, agreement, he agreed to release NIF-I from any and all claims.
A complaint in a creditor's action must allege clearly and definitely every fact necessary to entitle the plaintiff to relief. (Detroit Copper & Brass Rolling Mills v. Ledwidge (1st Dist. 1895), 58 Ill. App. 351, 353, aff'd 162 Ill. 305, 44 N.E. 751; 14 Ill. L. & Pr. Creditor's Actions § 10 (1968).) As plaintiff's amended complaint failed to allege a present and fixed right of action on the part of Zaltsman against ...