Source: https://supreme.justia.com/cases/federal/us/69/191/
Timestamp: 2019-04-20 10:16:37+00:00

Document:
1. It is the duty of assignees for the benefit of creditors who have once accepted the trust not only to appear but, so far as the nature of the transaction and the facts and circumstances of the case will admit or warrant, to defend the suit. And if a federal court is already seized of the question of the validity of the trust, they should set up such pending proceeding against any attempt by parties in a state court to bring a decision of the case within its cognizance. If, when the federal court has acquired previous jurisdiction, they submit with a mere appearance, and without any opposition to the jurisdiction of the state court, and pass over to a receiver appointed by it the assets of the trust, they will be held personally liable for them all in the federal court.
2. A party not appealing from a decree cannot take advantage of an error committed against himself, as for example that the appellant had omitted to prove certain formal facts averred in his bill and which were prerequisite of his case. But where -- assuming the fact averred but not proved to be true -- a decree given against a party in the face of such want of proof is reversed in his favor, it may be reversed with liberty given to the other side to require him to prove that same fact which the appellee, when seeking here to maintain the decree, was not allowed to object that the appellant had failed, below, to prove.
praying for the appointment of a receiver to take possession and charge of the property conveyed by the assignment, and that the trusts therein created be carried into effect, and that, upon the filing of the bill in the state court and after hearing the motion for a receiver, the motion was granted, and that they had afterwards, in pursuance of the order of the state court, transferred and set over to the said receiver, one Mitchell, all the property, real and personal, that had come to their hands.
To this answer a replication was filed, and the parties went to their proofs. There was no evidence that on the application in the state court for a receiver, which was made on the alleged ground of faithless execution of the trust, the assignees had made opposition. They had done nothing but acknowledge service on themselves of the notice of the intended motion for a receiver, employ a solicitor to enter an appearance for them, and to give their assent to the hearing of the motion at the February Term of the court, then at hand. The state court accordingly granted the prayer of the bill before it and appointed a receiver, one Mitchell, in the case. But no fraud was proved nor specifically alleged on the part of the assignees in any part of the proceeding.
the state court should have been treated as an interference with the federal jurisdiction previously acquired.
In order to understand this question of priority, it is necessary here to say that the bill in the circuit court was filed on the 4th of January, 1858; the subpoena served on the defendants on the next day; and their appearance entered on the 1st of February following. The bill in the state court was filed on the 1st of February, 1858, and the subpoena served on the 20th of the same month. The receiver was appointed afterwards on notice. The evidence did not show that the defendants conveyed the effects of the judgment debtor in their hands to the receiver, but the fact was apparently assumed both by the counsel and the court below, and no point upon it was made by the Court here.
the same, as in the case of Jones v. Green. [Footnote 1] See also Day v. Washburn. [Footnote 2] But here the complainants only have appealed, and the rule is settled in the appellate court that a party not appealing cannot take advantage of an error in the decree committed against himself, and also that the party appealing cannot allege error in the decree against the party not appealing. [Footnote 3] If the appellees desired to avail themselves of this error in the decree, they should have brought a cross-appeal. By omitting to do so, they admit the correctness of the decree as to them. The case stands before the appellate tribunal the same as if the error had been waived at the hearing.
This brings the case down to the question as to the effect to be given to the suit in the state court and to the order of that court appointing a receiver and directing the defendants to assign and set over to him all the effects of the judgment debtor in their hands, under his assignment of the 4th of November, 1857.
The bill in the circuit court of the United States to set aside the assignment to these defendants as fraudulent against creditors was first filed, and consequently operated as the first lien upon the effects of Brewster, the judgment debtor.
protect their title to the fund in controversy so far as the nature of the transaction and the facts and circumstances of the case would admit or warrant. Their whole duty appears to have been discharged in this respect, and we perceive no ground of complaint against them. But this duty was equally incumbent upon them in respect to the suit in the state court. They should have appeared and defended that suit, and, in addition to the defense on the merits, that is of their faithful execution of the trust, which was impeached by the bill, they should have set up the pending proceedings against them in the federal court, which tribunal had first acquired jurisdiction over them and over the fund in dispute, and were entitled to deal with it and with all questions growing out of the relations existing of debtor and creditor of the parties concerned. Instead, however, of pursuing this course, no defense, as appears, was set up by the defendants to the suit, no answer filed, nor even opposition made to the motion for the appointment of a receiver. The only part they seem to have taken in the proceedings is, besides acknowledging service of the notice of the motion for a receiver, the solicitors entered their appearance in the cause and gave consent that the motion might be made at the then February Term of the court. It was at once made, and the receiver appointed and gave the requisite security.
Now, we think, here was a clear omission of duty on the part of the defendants, as trustees and bailees of the property in question, and for which they should have been held personally responsible. They should have appeared and defended the suit in the state court and set up the pending proceedings in the federal court, which was a complete answer to the jurisdiction of the former, and if this defense had been overruled, a remedy existed by a writ of error to this Court under the 25th section of the Judiciary Act.
68 U. S. 1 Wall. 330.
65 U. S. 24 How. 355, 65 U. S. 356.
Kelsey v. Weston, 2 Comstock 505; Norbury v. Meade, 3 Bligh 261; Mapes v. Coffin, 5 Paige 296; Idley v. Bowen, 11 Wendell 227.
Levy v. Arredondo, 12 Pet. 218; Marine Insurance Company v. Hodgson, 6 Cranch 206; Mandeville v. Burt, 8 Pet. 256-257.

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