Case ID: tenn_58/html/0141-01.html
Source: Caselaw Access Project
Author: {"author": "Eebeman, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Tipton v. Bank of Tennessee.
    Chancery Practice. Final Feme Suspended. A final decree settling the rights of the. parties, was suspended by order of the Chancellor, upon the application of solicitor of defendant, until the next term of the court, to allow defense on the merits, should evidence be produced showing justice required it; Held: Under such an order the Chancellor had no power to vacate the decree of the former term, simply to enable the defendant to plead the pendency of an insolvent and injunction bill in another court involving the same matters of litigation. The laches of defendant in not making this defense earlier, is a waiver of his right to do so, he having been regularly served with process in the present suit.
    PROM HAWKINS.
    Appeal from the Chancery Court at Rogersville, May Term, 1872. H.. C. Smith, Ch.
    Shields, for complainant said:
    This bill, filed in the Chancery Court at Rogers-ville, October 28, 1871, charges that the complainants are the personal representatives of A. B. Tipton, deceased;' that the defendant many 'years ago sold to their intestate a tract of land in Sullivan county, and executed a bond to convey the same in fee simple; that the purchase money long since was fully paid, but no conveyance has been made.
    It is further charged that there was an incumbrance on the land; that one Lydia Ann Torbet was at the time of the sale entitled to be endowed of the land as widow of a former owner, o a fact that was subsequently judicially declared; (and, we will here remark in parenthesis, the doctrine of the case, more fully elaborated in Henell v. Henell, has by this court been overruled;) and dower assigned to her.
    The prayer of the bill is, that the value of said dower interest be ascertained, ■ the defendant decreed to pay it, and that certain real estate situate in Hawkins county be sold for the satisfaction of the decree, and that the title to the tract of land so purchased be divested out of the defendant and vested in the heirs at law of the said Tipton.
    No defense was made, and a judgment pro eonfesso was regularly taken and entered.
    A reference to ascertain the value of said dower was ordered, a report made, which was confirmed, and at a special term, held in . January, 1872, a decree against the defendant for $842.50 was pronounced, and also to sell the said property for the satisfaction of the same.
    But, after the decree was entered on the minutes, the following order was made: “ On motion of the defendant it is ordered by the court as upon the affidavit of C. J. McKinney, that the deei’ee entered upon a former day of this term be suspended until. the next May Term, 1872, the court reserving the power to vacate the decree, and allow Judge Watson, as as-signee of the bank, to make defense,- should he show sufficient grounds by affidavit, showing that justice requires that he be allowed to defend.”
    At the May Term, 1872, the following order was entered: “ In this cause, J. A. McKinney, solicitor for the defendant Watson, and - solicitor and attorney for the Bank of Tennessee, appeared, and affidavit being waived, stated as on affidavit, that there was a bill filed in the Chancery Court at Nashville for the purpose of settling and adjusting all claims against the Bank of Tennessee, and said court had enjoined all creditors of the bank from filing bills, or sueing out process against said bank in any other court, as is shown by a certified transcript of the record herewith filed as exhibit A, and made by order of the court a part of the record, and moved the court to suspend-, all further action in this case in this court until the injunction at Nashville shall be dissolved, or modified, which motion is ordered to lie over for further consideration.”
    At a subsequent day of the same term, the said motion was overruled, the decree of the January special term revived, and the clerk and master ordered to execute it. -And thereupon, the defendants appealed to this court.
    The order at January Term was to suspend the execution of the first decree then entered, until the next May Term, to allow “Judge” Watson to “defend,” provided he could show that justice required that defense should be allowed. This “Judge” Watson failed to do. It was to show that justice required that defense should be allowed, and for this purpose alone, that the final decree was suspended. No effort was ever made to show this, nor even to make defense. A further motion was made to suspend further action until an injunction in. another cause in another court was dissolved or modified.
    Now, if this court had been of the opinion, that the affidavit and exhibit A to the same, contained matter sufficient to authorize a further suspension, there was no power to make such order left in this court. The final decree of January Term was binding and conclusive upon the court, except so far as power over it, had been expressly reserved, and this was simply to allow defense to the merits, if it should appear to the court that justice demanded that such defense ’ should be made.
    But, this question arises, do the statements of Mr. McKinney and the transcript of the record from Nashville, present sufficient reasons and grounds for not enforcing this decree ?
    It appears that on May 16, 1866, a bill was filed in the Chancery Court at Nashville, in the name of the State of Tennessee and Samuel Watson against the President and Directors of the Bank of Tennessee,' and other persons whose names and residences are stated. This bill charges that the Legislature required the said corporation to make an assignment of its property; that such an assignment was made, and the prayer is, that the trust be executed under the direction of this court. The bill also prays for injunctive relief in these words: “Complainants would pray your honor in the mean time to order the writ of injunction to issue, enjoining all persons or corporations from suing out any writ against said bank or trustee, either original, intermediate or final, or commencing any legal proceedings whatever, either in any court of law or equity in the State of Tennessee, or elsewhere.” It further appears that a fiat was made ordering such an injunction to issue.
    We do not question that such a writ must be obeyed until dissolved by all persons bound by it; but it certainly was granted in the exercise of a power which assumed to be almost omnipotent, for not only are all persons in the State of 'Tennessee, whether parties or not, but all persons everywhere, enjoined from suing said corporation.
    As to the validity of the legislation stated in the bill,, and as to the right to maintain the bill itself, we do not propose to say anything, because those are questions that can not be material in considering the effect of this injunction. The fact that such an injunction was granted and issued exists, and the question is, whether the complainants in the present suit are bound by it.
    We submit these propositions:
    1. An injunction should not be granted against persons who are not parties to the suit; and if granted, they are not bound by it. 3 Dan. Chan. Prac., 1717; 
      Iveson-v. Harris, 7 Ves. Jr., 257; Fellows v. Fellows, 4 Johnson’s Ch., 25; 7 Paige, 167. Exceptions have been allowed; but we maintain that the practice works intolerable hardships and gross injustice, and should not be adopted in Tennessee.
    2. If this case were within the principle of the exceptions that have beeh allowed, the complainants had no notice. The first notice they had, was at the May Term, 1872, months after a final decree had been pronounced. There is no evidence of notice in the record, until the production of the transcript in court at the May Term. Publication, it is true, seems to have been made. Such notice is seldom notice in fact, even in' those cases in which it is notice in law. But we deny that notice of an injunction can be given by publication in a newspaper; There is no authority for such a practice. We admit that any uotiee in fact is sufficient — but there is no evidence of any such notice in this case.
    It therefore follows, that as this cause was prosecuted to a final decree before any notice of the injunction was given — and the corporation had ample notice of the proceedings — that the proceedings and decree are valid, and that complainaats are entitled to the benefit of them.
    B arto A, for defendant, said:
    For the trustee and bank, I submit that this decree was erroneous and void and must be reversed.
    By the Act of 1865-6, ch. 36, .sec. 33, the charter of the Bank of Tennessee is repealed.
    
      By the provisions of the 28th ch. of Acts of 1865-6, the President and Directors are required to make an assignment of the assets of the bank. By the 7th section, the. Attorney General shall file a bill, making all creditors parties, by publication, and enjoining them, etc.
    1. I submit, that the court at Nashville having properly obtained jurisdiction to wind up the affairs of the bank in an insolvent bill, the injunction was properly granted, and is obligatory on all parties.
    2. The jurisdiction having attached, in the Chancery Court at Nashville, the Chancery Court at Rogers-ville could make no decree in regard to the same property or subject matter, that will hinder the court at Nashville in enforcing all decrees rendered in that cause. The court at Rogersville has no power to exercise any jurisdiction over the property conveyed, and so soon as notified of the pending of the suit at Nashville, it was the duty of the Chancellor to sustain the motion to suspend. See Deaderick v. Smith, 6 Hum., 138; Whiteside & Wyatt v. Latham, 2 Col., 91 ; Lane v. Marshall, 1 Heis., ; Farnsworth v. Felt.
    
    3. If the injunction was improperly granted, which is not conceded, still, until dissolved, it remains in force, and all decrees taken in disregard thereof are merely void. Rutherford v. Metcalf, 5 Hay., 58.
   Eebeman, J.,

delivered the opinion of the Court.

This bill was filed October, 1871, to have a decree divesting the Bank of Tennessee of title of a tract of land purchased by complainant, and have the same vested in said complainant, the purchase money having been paid, but no title made.

Incidental to this relief, it is alleged that there had been a loss of part of the land, by the allowance of dower, which had been assigned to Lydia Ann Torbett,. and it is asked by the prayer of the bill, that an account be had of the value of this incumbrance and a decree for such value, and a sale of certain real estate qf the bank is asked to satisfy the decree. Process was served, or acknowledged, and we assume on the proper party, as no point is made o.n this question before us.

At November Term, 1871, an order pro eonfesso was regularly taken, for want of an answer, or appearance by the defendant; and thereupon a decree was rendered by the court, settling the right of complainant to a recovery, as prayed for in his bill; but it not appearing to the court what was the value of the dower estate, it was ordered that the clerk and master inquire and report on that question at next term. Afterwards, January 25th, 1871, at a special term of the court, the master made his report, valuing the dower at $842.50 — said report having been made after due notice given to Watson, the president of the bank. This report being unexcepted to, was confirmed, and a decree entered for the amount, and an order for the sale of the. land attached. But at the same term, it was ordered as follows: “On motion of the defendant, it is ordered by the court, as upon affidavit of C. J. McKinney, that the decree entered on a former day of this term, (that is, the above decree ■ordering the sale), be suspended until the next May term, 1872, the court reserving the power to vacate the decree and allow Judge Watson, assignee of the bank, to make defense, should he show sufficient grounds by affidavit, showing that justice requires that he be allowed to defend.”

At May term, J. A. McKinney, solicitor for Watson and for the Bank, appeared and stated as on affidavit, that there was a bill filed in the Chancery Court at Nashville, for the purpose of settling and adjusting all claims against the Bank of Tennessee, and that said court had enjoined all creditors of the bank from -filing bills or suing out process against said bank in any other court, as is shown by a certified transcript of the record, herewith filed as exhibit A, and made by the court a part of the record. And thereupon he moved the court to suspend all .further action in this case in this court, until the injunction at Nashville shall be' dissolved or modified, which motion was ordered to lie over for further consideration. At a subsequent day of the term, this motion was overruled, and the decree made at the last term ordered to be executed, from which- decree defendant appealed.

The question presented on these facts, is not whether fhe decree rendered by the Chancellor in favor of complainant, on the matters contained in his bill, is correct and the proper decree in the case, but whether lie erred in proceeding with the cause, and in overruling the motion of defendant to suspend his final decree ordering a sale of the land, until the dissolution or modification of the injunction in the case at Nashville. It will be seen that this decree of January, 1872, was regularly entered, was a final decree, as containing the amount that was due, or to be allowed as value of the incumbrance by the dower, and, as to the sale of the land attached was but in the nature of an execution awarded, to satisfy the amount found due by the clerk and master, the liability having been ascertained by the previous decree of November, 1871.

This decree, however, was ordered to be suspended, the court reserving the power to vacate the decree,, and allow Judge Watson, as assignee of the bank, to-make defense, should he show sufficient grounds, showing that 'justice requires that he be allowed to defend.”' This reservation was until May term, 1872.

We think it clear, that the court could render this, order, or did only reserve the right to vacate its decree, provided Watson should show, that justice required that he should be allowed to defend.

In the aspect of the case, as it stood at this time,, the question is, whether the pendency of the suit at Nashville, showed that justice required that Watson, as. assignee, should have been allowed to defend it. We do not think that such was the case. Watson had been regularly served with process, had failed to appear and interpose any objection to the proceedings, as he might have done, if the effect of this proceeding was such as is now insisted on. He chose to waive this, and allow this case to go on to final decree; and then, without any explanation or excuse for his failure to interpose the defense at an earlier day, asks that the court suspend its final decree, until the injunction be dissolved or modified. We doubt whether the court had the power, under these circumstances, to suspend its decree, even if the terms of the order did not preclude it. That is simply as asked by the defendant. But by the terms of the reservation it is clear, that the court, could only vacate this final decree, upon a defense being presented to the case as it stood, as it had no power to vacate the decree made at a former term. That had passed beyond its control. In a word, no defense 'to the merits is presented, but only a suspension of action by the court. As no defense was then presented available against the case at the stage in which. it stood, nor facts showing that justice required such defense to be made by Watson, the court could not under this reservation properly vacate its decree already entered.

It is not necessary, in this view of the case, to consider the question presented, as to whether. complainant had notice of the injunction, as we think the defendant had, by his own laohes, waived that defense, and let the case pass beyond the point at which he could properly interpose the defense presented. The decree of the Chancellor will be affirmed.