## Facts

- James H. Rice Co. (Rice) sued Joseph McJohn and obtained a money judgment for $1,801.60.
- About one month before the judgment was entered, Joseph conveyed his only substantial asset—Chicago real estate improved with a three‑story brick building—to his father, Edward McJohn.
- The deed recited a consideration of $1, but Edward paid no consideration; Rice alleged Edward held title in trust for Joseph to keep the property beyond the reach of Rice’s judgment.
- After judgment, the sheriff demanded payment, but Joseph did not satisfy the judgment.
- Rice filed a creditor’s bill in aid of execution against Joseph and Edward seeking to set aside the conveyance as fraudulent and to subject the property and its income to the judgment.
- Neither Joseph nor Edward answered; the trial court entered defaults, received proof through a master, and found the conveyance fraudulent as to Rice.
- The trial court appointed a receiver to take charge of the property and collect rents while the case was pending.
- Edward died after the receiver’s appointment; the administrator of Edward’s estate appeared and moved to vacate the default and challenged the court’s authority to appoint a receiver and to divert rents from Edward’s estate.
- The trial court set aside the conveyance as fraudulent as to Rice and ordered the receiver to pay rents collected to Rice to apply on Joseph’s judgment.
- The administrator appealed, eventually reaching the Illinois Supreme Court.

## Issues

1. Whether Rice’s suit was properly treated as a creditor’s bill in aid of execution (with full equitable remedies) rather than a limited statutory creditor’s bill.
2. Whether, in a creditor’s bill in aid of execution seeking to set aside a fraudulent conveyance of income‑producing real estate, the court may appoint a receiver to take possession and collect rents pending litigation.
3. Whether the court may direct rents collected by the receiver to be applied toward the judgment, rather than paid to the fraudulent grantee (or the grantee’s estate), after the conveyance is declared fraudulent as to the creditor.

## Decision

- The Illinois Supreme Court affirmed.
- The Court treated the action as a creditor’s bill in aid of execution to reach property fraudulently conveyed and subject it to the judgment.
- The Court held the trial court had authority to appoint a receiver to manage the real estate and collect rents while the claim was being resolved.
- The Court upheld the order directing that rents collected by the receiver be paid to Rice and credited on the judgment, rejecting the estate administrator’s demand that the rents be turned over to Edward’s estate.

## Legal Principles

- A judgment creditor may bring an equitable action in aid of execution to remove obstacles to collection, including a conveyance made to hinder, delay, or defraud the creditor.
- A transfer of a debtor’s principal (or only) reachable asset to a close relative for nominal or no consideration, made shortly before judgment, supports a finding of fraud as to the creditor.
- When the suit is a creditor’s bill in aid of execution (not merely a statutory discovery proceeding), the court may use general equitable remedies appropriate to preserve and secure the property for satisfaction of the judgment.
- In such a suit, the court may appoint a receiver to take possession of income‑producing property and collect rents during the litigation when needed to protect the creditor’s ability to realize on the judgment.
- Once the conveyance is declared fraudulent as to the creditor, the fraudulent grantee (and the grantee’s estate) has no superior claim to rents collected under the court’s control, and those funds may be applied to the judgment.

## Conclusion

James H. Rice Co. v. McJohn holds that a judgment creditor may use a creditor’s bill in aid of execution to set aside a debtor’s fraudulent transfer of real estate to a family member, and that the court may appoint a receiver to collect rents and apply them toward the judgment once the transfer is found fraudulent as to the creditor.


James H. Rice Co. v. McJohn, 244 Ill. 264 (1910)