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assignment, and the title of the assignee vested as of March 5, 1874, which was before any execution levy. In this view it would not be necessary to notice any of the objections made as to the first petition, or as to the seconá petition regarded as an amended petition, were it not that the bill is founded on the first petition. The date of October 19th in the adjudication must be regarded as a clerical or typographical error. The proper date is stated in the bill and admitted in the answer, and is stated in the clerk's certificate and in the bankruptcy assignment, and in a stipulation signed by the solicitors. Enoch C. Hoyt died February 25, 1874, before the second petition was filed, and the order made by the bankruptcy court, May 2, 1874, states that he had died "since the commencement of the proceeding in said matter;" and it was that fact, in connection, probably, with the fact that no order to show cause had been served on Enoch C. Hoyt, which made it necessary for that order to direct the marshal to surrender to the representatives of Enoch C. Hoyt all his individual property.
It is also objected by the defendant that the petition was filed against the firm, and that the record does not show that the petitioner filed any proof of his claim, or any proof of bankruptcy. * By section 36 of the act of 1867, (section 5121 of the Revised Statutes,) where two persons, partners in trade, should be adjudged bankrupt, not only was the property of the firm to be taken and administered, but also the separate estate of each partner. When Enoch C. Hoyt died, the partnership estate vested in the survivor, and the proceedings were, by consent of attorneys then appearing for the survivor, ordered to stand against him as survivor, and to proceed against him as survivor. He appeared by attorney, and consented to an adjudication. By section 41 of the act of 1867, (section 5026 of the Revised Statutes,) the appearance and consent of the debtor were made a waiver of other notice. The adjudication states that, on consideration of the proofs, it was found that the facts set forth in the petition were true. It was not necessary to show in this case what the proofs were. If the district court had jurisdiction of the subject-matter, and the bankrupt voluntarily appeared, and the adjudication was correct in form, it is conclusive of the fact decreed, and can be impeached only by a direct proceeding in a competent court, and can no more be attacked collaterally in a suit like the present than any other judgment. Michaels v. Post, 21 Wall. 398. The adjudication and the assignment embraced the individual property of Benjamin C. Hoyt; and it is alleged in the bill, and admitted in the answer, that the property levied on by the defendants was his individual property.
These views cover all the objections made to the bankruptcy proceedings, and it must be held that the adjudication was regular and valid, and refers to, and was made on, the first petition, as amended by the second, and on a proceeding commenced when the first petition was filed.
It is objected that the bill makes no mention of the attachment. But the answer sets up the attachment and the levy thereunder. The question as to whether a priority of right was acquired thereby was raised by the pleadings, and the decree makes no reference to the attachment, but annuls the execution levies. By section 2 of the act of 1867, the circuit court of the district has jurisdiction of all suits in equity brought by an assignee in bankruptcy against any person claiming an adverse interest touching any property of the bankrupt transferable to or vested in the assignee. This provision is re-enacted in section 4979 of the Revised Statutes. By section 720 of the Revised Statutes it is provided that "the writ of injunction shall not be granted by any court of the United States, to stay proceedings in any court of a state, except in cases where such injunction may be authorized by any law relating to proceedings in bankruptcy." It is contended for the appellant (1) that a suit in equity will not lie for the relief granted; (2) that, at all events, there was no power to award the injunction.
That the defendant claimed an adverse interest touching the property is clear. The question is whether the plaintiff can have relief in equity. He was in possession of the land, and, as he says, of the only building there was on it. By statutory provisions in Michigan, commencing with section 29 of the act of April 23, 1833, (Code 1833, p. 358,) followed by section 1 of the act of March 28, 1840, (No. 76, p. 127,) and the Revised Statutes of 1846, (title 21, c. 90, § 36, p. 360,) and now in force as section 6626 of Howell's Statutes, "any person having the actual possession of, and legal or equitable title to, lands, may institute a suit in chancery against any other person setting up a claim thereto in opposition to the title claimed by the complainant, and, if the complainant shall establish his title to such lands, the defendant shall be decreed to release to the complainant all claim thereto." If there should be a sale on the executions, there would be a sheriff's deed; and, by another statute of the state, such deed is made prima facie evidence of the regularity of the sale. Act February 19, 1867, No. 20, § 2, now in force as section 5678 of Howell's Statutes. It is held by the supreme court of Michigan that the statute first cited covers a claim to a lien on land, and that a lien which may result in a sale and a deed constitutes such a cloud that equity will afford relief. Scofield v. City of Lansing, 17 Mich. 437, 447, 448. Especially will this be
done, if the lien is not void on its face, as the lien here is not, but is a cloud on the plaintiff's title. Therefore, the plaintiff could obtain, under the Michigan statute, and in a court of Michigan, the relief he has had. In such a case, a circuit court of the United States, having otherwise jurisdiction in the case, will, as a general rule, administer the same relief in equity which the state courts can grant. Clark v. Smith, 13 Pet. 195, 203; Case of Broderick's Will, 21 Wall. 503, 519, 520; Van Norden v. Morton, 99 U. S. 378, 380; Cummings v. National Bank, 101 U. S. 153, 157; Holland v. Challen, 110 U. S. 15; S. C. 3 SUP. CT. REP. 495; Reynolds v. Crawfordsville Bank, 112 U. S. 405; S. C. ante, 213. It has general power given to it, irrespective of citizenship, to grant equitable relief, in a suit in equity by an assignee in bankruptcy against any person who claims an adverse iuterest touching the assigned property.
We are not disposed, however, to rest the case upon jurisdiction arising from the Michigan statute. We hold that, under the equity jurisdiction conferred by the bankruptcy act, the circuit court had authority to remove this cloud on the plaintiff's title. It was the duty of the assignee to remove it, and to obtain a title which would enable him to sell the land for the benefit of the estate. The claim of the defendants, under the levies, is one which ought not to be enforced. It has no validity as against the rights of the plaintiff; it throws a cloud on his title; he is in possession, and cannot sue at law; and the papers supporting the defendant's claim are not void on their face. Story, Eq. Jur. § 700, 705; 3 Pom. Eq. Jur. §§ 1398, 1399, and cases cited; Pettit v. Shepherd, 5 Paige, 493; Carroll v. Safford, 3 How. 463; Ward v. Dewey, 16 N. Y. 519; Mustian v. Jones, 30 Ga. 951; Martin v. Graves, 5 Allen, 601; Stout v. Cook, 37 Ill. 283; Clouston v. Shearer, 99 Mass. 209; Sullivan v. Finnegan, 101 Mass. 447; Anderson v. Talbot, 1 Heisk. 407; Marsh v. City of Brooklyn, 59 N. Y. 280; O'Hare v. Downing, 130 Mass. 16, 19. In Pettit v. Shepherd it was held that a court of chancery might interpose to prevent the giving of a conveyance, under pretense of right, which would operate as a cloud upon the title to real estate. In O'Hare v. Downing it is said that “a court of chancery will restrain by injunction a threatened levy of execution upon real estate which is not legally subject to such a levy, and thus prevent a cloud upon the title, without compelling the owner of the land to wait, until the levy has been completed, and then admit himself to be disseized, in order to maintain a writ of entry." Much more will it prevent a sale after a☛ levy.
But it is contended that the circuit court had no authority to award or is
sue the injunction. The jurisdiction of that court in this case is conferred by the "law relating to proceedings in bankruptcy;" and we think the injunc tion was authorized by that law. The court of bankruptcy was authorized, by section 40 of the act of 1867, (section 5024 of the Revised Statutes,) where a petition in involuntary bankruptcy was filed, to restrain all persons by injunction from interfering with the debtor's property. The jurisdiction of suits in equity, given to the circuit court by section 2 of the act of 1867, (section 4979 of the Revised Statutes,) was given to it concurrently with the district courts. It must be held that congress, in authorizing a suit in equity, in a case like the present, has, in order to make the other relief granted completely effective, authorized an injunction, as necessarily incidental and consequent, to prevent further proceedings under the levies already made and new levies under the judgment. But for the supposed inhibitory force of section 720, a court of equity, in granting on the merits the other relief here granted, would necessarily have power to award the injunction. We think the circuit court was authorized to award it here, within the exception in section 720.
It is urged that the plaintiff should have made himself a party to the proceedings in the state court, and have contested the matter there, under the authority given to him by section 14 of the act of 1867, (section 5047 of the Revised Statutes,) to defend suits pending against the bankrupt at the time of the adjudication. As the assignment in bankruptcy was not made till October 1, 1874, and the judgment and the levy under the first execution were in May, 1874, we do not think the assignee was called upon to take any steps in the state court, after the assignment, to obtain relief. He was entitled to pursue the remedy he did.
The cases of Krippendorf v. Hyde, 110 U. S. 276, S. C. 4 SUP. CT. REP. 27, and Covell v. .Heyman, 111 U. S. 176, S. C. 4 SUP. CT. REP. 355, are relied on by the appellant to show that the decree in this case was erroneous. The view urged is that, by virtue of the levy by the sheriff, the state court acquired custody, control, and jurisdiction of the property, which could not be disturbed by the circuit court. But the doctrine of those cases has no application in favor of the appellant in a case like the present. In the first case it was held that after property had been attached by a marshal of the United States, on mesne process from a circuit court of the United States, a third person, claiming its ownership, could, without reference to citizenship, come into the circuit court for redress, by ancillary proceedings. In the second case it was held, in pursuance of the decision in Freeman v. Howe, 24 How. 450, that possession of property by a marshal of the United States, under a writ of execution from a circuit court of the United States, could not be disturbed by virtue of a writ of replevin from a state court, issued by a third person. E converso, as was held in Taylor v. Carryl, 20 How. 583, property seized by a sheriff, under process of attachment from a state court, cannot be taken from the sheriff by initial admiralty process, issuing from a district court of the United States. But those were none of them cases where, under the bankruptcy act, an assignee in bankruptcy claimed a paramount title, and resorted to regular judicial proceedings to first vacate and declare void the adverse title, and sweep it away, and then have such final process in regard to the subject-matter of the title as should be necessary to make the decree effective. And in Covell v. Heyman, the court, speaking by Mr. Justice MATTHEWS, after explaining the point of the decision in Freeman v. Howe, says: The same principle protects the possession of property, while thus held by process issuing from state courts, against any disturbance under process of the courts of the United States, excepting, of course, those cases wherein the latter exercise jurisdiction for the purpose of enforcing the supremacy of the constitution and laws of the United States." This exception includes the present case. The bankruptcy proceeding dissolved the state
(114 U. S. 138)
attachment, and the bankruptcy act conferred on the assignee a paramount title, which he was empowered by that act to enforce, by proper equitable remedies, in the circuit court, against the adverse title set up by virtue of the suit in the state court. Decree affirmed.
FARMINGTON VILLAGE CORP. v. PILLSBURY.
(March 30, 1885.)
1. REMOVAL OF CAUSES-ACT OF 1875-COLLUSIVE ACTS IN ORder to Give JURISDICTION. In order to protect courts as well as parties against frauds upon the jurisdiction of United States courts, the act of 1875 made it the duty of a federal court, at any time when it satisfactorily appeared that a suit did not really and substantially involve a dispute or controversy properly within its jurisdiction, or that the parties had been improperly made or joined for the purpose of creating a case cognizable under that act, to proceed no further therein, and to dismiss the suit, or remand it to the state court from which it had been removed.
2. SAME ASSIGNMENT OF BONDS TO CITIZEN OF ANOTHER STATE.
A federal court will not entertain a cause brought by a resident of Massachusetts to recover upon a bond given by a corporation in Maine, when it appears that the bond had been previously assigned to plaintiff by its bona fide holder, a resident of Maine, in order to give jurisdiction of the controversy to such court.
In Error to the Circuit Court of the United States for the District of Maine. Wm. L. Putnam, for plaintiff in error. Chas. F. Libby, for defendant in
WAITE, C. J. This was a suit upon coupons for semi-annual interest on the bonds of the Farmington Village Corporation, and among the defenses set up was one to the effect that the plaintiff was not a bona fide holder of the coupons in suit, but that they were placed in his hands merely for the purpose of bringing a suit in the circuit court of the United States. The case was tried by the court without the intervention of a jury, and comes here with a special finding of facts, and a certificate of division of opinion between the judges holding the court upon certain questions arising at the trial. Among the questions certified was this: “Whether the plaintiff can maintain an action in this court upon the coupons declared upon, the bonds or instruments to which they were attached not being assigned to him, but having been issued to and always held by citizens of Maine.
The facts applicable to this question, which appear in the special findings, are these:
The bonds from which the coupons were cut were issued by Farmington village under a private statute passed by the legislature of Maine authorizing the village corporation to raise money to aid in the extension of the road of the Androscoggin Railroad Company to some point within or near the limits of the village. The bonds were issued by the assessors and treasurer of the village to a committee of citizens, who were authorized to sell and dispose of them for the purpose mentioned in the statute. Before the committee received any of the bonds from the assessors and treasurer, and before July 1, 1870, which was the date of the bonds, Jonas Burnham and 11 others, all citizens, owners of property subject to taxation, and tax-payers in the village corporation, filed a bill in equity in the supreme judicial court of the state of Maine, in Franklin county, against the railroad company, the assessors and treasurer, and the committee of the village, to enjoin them from issuing the bonds, on the ground of a want of authority of law for that purpose. This suit was entered at the July term, 1870, of the court, and held under advisement until the third of August, 1872, when the bill was dismissed without prejudice. After this, on the twelfth of August, 1872, other tax-payers filed another bill of the same general character against the same
defendants and the village corporation to obtain substantially the same relief. To this bill the village corporation filed an answer, and the railroad company a general demurrer. The case was heard by the court at the July term, 1873, and kept under advisement until August 27, 1878, when a decree was rendered sustaining the bill and granting the injunction prayed for. The opinion of the court is reported in 70 Me. 515, and is to the effect that the statute authorizing the village corporation to aid the extension of the railroad was unconstitutional and void. This opinion was concurred in by only four of the eight judges composing the court at the time of the hearing. One judge, who sat in the cause, died while the opinion was in his hands for examination, and his death made the four judges a majority of the court at the time of the decision.
Notwithstanding the pendency of the original suit, the bonds were put out, and, with the exception of a few only, were bought by citizens of Farmington and members of the village corporation. The coupons in suit were collected from various holders of the bonds, all residents of Farmington and citizens of the state of Maine, about May, 1880, and transferred to the plaintiff, a citizen of Massachusetts, separate from the bonds. The plaintiff gave his note and agreement for these coupons to the agent of the holders who had taken them to dispose of, as follows:
BOSTON, May 5. 1880.
"For value received I promise to pay to P. Dyer five hundred dollars in two years, with interest. E. F. PILLSBURY."
"BOSTON, May 5, 1880.
"Whereas, I have this day bought of P. Dyer, of Farmington, coupons of the Farmington village corporation to the amount of $7,922, and given him my note for the same; as a further consideration for said coupons, I agree that, if I succeed in collecting the full amount of said coupons, I will pay him fifty per cent. of the net amount collected above said five hundred dollars, and pay him as soon as I collect the money from said corporation.
"E. F. PILLSBURY."
This suit was begun July 1, 1880.
By the original judiciary act of September 24, 1789, c. 20, (1 St. 73,) it was provided (section 11) that no district or circuit court should "have cognizance of any suit to recover the contents of any promissory note or other chose in action in favor of an assignee, unless a suit might have been prosecuted in such court to recover the said contents if no assignment had been made, except in cases of foreign bills of exchange." The same act provided (section 12) for the removal of suits from a state court to the circuit court by a defendant, and he was required to file his petition for such a removal at the time of entering his appearance in the state court.
By the act of March 3, 1875, c. 137, § 1, (18 St. 470,) section 11*of the act of 1789 was changed so as to provide that the circuit and district courts should not have cognizance of any suit founded on contract in favor of an assignee, unless a suit might have been prosecuted in such court to recover thereon if no assignment had been made, except in cases of promissory notes negotiable by the law-merchant and bills of exchange. By the same act, sections 2 and 3, removals could be effected by either party, when the necessary citizenship existed, if a petition was filed therefor in the state court, before or at the term at which the cause could be first tried, and before the trial thereof. This last act also contained this provision, (section 5:) "If, in any suit commenced in a circuit court, or removed from a state court, * * * it shall appear to the satisfaction of the circuit court, at any time after such suit has been brought or removed thereto, that such suit does not really and substan. tially involve a suit or controversy properly within the jurisdiction of said