Source: https://supreme.justia.com/cases/federal/us/150/202/
Timestamp: 2019-04-25 14:37:28+00:00

Document:
The jurisdiction of federal courts, sitting as courts of equity, cannot be enlarged or diminished by state legislation.
Whether such a court has jurisdiction in equity over a particular case will be determined by inquiring whether, by the principles of common law and equity, as distinguished and defined in this country and in the mother country at the time of the adoption of the Constitution of the United States, the relief sought in the bill was one obtainable in a court of law or one which only a court of equity was fully competent to give.
A creditors' bill, to subject property of the debtor fraudulently standing in the name of a third party to the payment of judgments against the debtor is within the jurisdiction of a federal court, sitting as a court of equity, although, in the courts of the state in which the federal court sits, state legislation may have given the creditor a remedy at law.
N. and S., being citizens of Louisiana, obtained a judgment in a court of the state against C., also a citizen of Louisiana, which they assigned to W, and L., citizens of Missouri. The assignees thereupon brought suit against C. in the Circuit Court of the United States for the Western District of Louisiana, putting the jurisdiction on the ground of diverse citizenship. Held that under the provisions of § 1 of the Act of March 3, 1875, 18 Stat. 470, c. 137, which statute was in force when the suit was commenced, it could not be maintained.
The jurisdiction of this Court in this case is limited by the Act of February 25, 1889, 25 Stat. 693, c. 236, to the determination of the questions as to the jurisdiction of the circuit court.
$24,282.16, which judgment, subject to a credit of $5,452, the proceeds of certain attachment proceedings accompanying the action, was duly assigned to Wood & Lee. Newman and Stockman were both citizens of Louisiana. On November 30, 1885, Wood & Lee filed their bill in equity in the Circuit Court of the United States for the Western District of Louisiana against Simon Cohn, his wife, Fannie Cohn, and his wife's mother, Henrietta Steinhardt, all citizens of Louisiana, the purpose and object of which was to set aside as fraudulent a judgment in favor of Mrs. Cohn against Simon Cohn, and to subject certain property standing in the name of Mrs. Steinhardt, and alleged to be the property in fact of Simon Cohn, to the payment of these judgments. On July 11, 1882, the Mississippi Mills, a corporation organized under the laws of the State of Mississippi, obtained a judgment in the Eighth District Court of the Parish of East Carroll, Louisiana, against Simon Cohn for $751.46. On July 5, 1883, it commenced in that court a suit of substantially the same nature as that commenced by Wood & Lee. This suit was duly removed to the Circuit Court of the United States for the Western District of Louisiana. After such removal, and on October 29, 1886, these cases were consolidated by an order of the circuit court, and from that time on they proceeded as one case. Pleadings having been perfected and proofs taken, the consolidated case was submitted to the circuit court, and on July 18, 1889, a decree was entered dismissing the bills of plaintiffs for want of jurisdiction. To reverse this decree of dismissal, appellants have brought their appeal to this Court.
of the circuit court were it not for the opinion of District Judge Boarman, before whom the case was heard, 39 F. 865, which gives his reasons for entering the decree of dismissal.
"If it be true that Cohn, notwithstanding said purchases, transfers, etc., were ostensibly made by Mrs. Steinhardt, and the title of record is in her name, is the real owner of the property now sought to be subjected to the payment of Cohn's debts, the complainants have a well known and adequate remedy at law to make the property liable for their claims."
"The issues made up by the pleadings and evidence involve fundamentally the title to or the real ownership of the property in question. The complainants charge that Cohn in fact and law is the owner thereof. The defendants deny his ownership, and contend that the sales were real sales to Mrs. Steinhardt. Such issues are not determinable in this court in equity proceedings. . . . In the view and purpose of complainants' charges, Cohn now owns the property, and they have not presented or sought to present such an action as should be heard in equity, and it is ordered that their suit be dismissed."
"that the jurisdiction of the courts of the United States over controversies between citizens of different states cannot be impaired by the laws of the states, which prescribe the modes of redress in their courts, or which regulate the distribution of their judicial power."
"If legal remedies are sometimes modified to suit the changes in the laws of the states and the practice of their courts, it is not so with equitable. The equity jurisdiction conferred on the federal courts is the same that the high Court of Chancery in England possesses, is subject to neither limitation nor restraint by state legislation, and is uniform throughout the different states of the Union."
"The contention of the appellants, however, is that by the statute of West Virginia, the complaint might have maintained an action of ejectment. Reference is made in support of this to the West Virginia Code of 1868, c. 90, to show that an action of ejectment in that state will lie against one claiming title to or interest in land, though not in possession. Admitting this to be so, it nevertheless cannot have the effect to oust the jurisdiction in equity of the courts of the United States, as previously established. That jurisdiction, as has often been decided, is vested, as a part of the judicial power of the United States, in its courts, by the Constitution and acts of Congress in execution thereof. Without the assent of Congress, that jurisdiction cannot be impaired or diminished by the statutes of the several states regulating the practice of their own courts."
See also Scott v. Neely, 140 U. S. 106; Cates v. Allen, 149 U. S. 451, in which a state statute extending the jurisdiction of equity to matters of a strictly legal nature was held inapplicable to the federal courts, and unavailing to vest a like jurisdiction in such courts sitting as courts of equity.
that the full relief sought in this suit could be obtained in the state courts in an action at law, it does not follow that the federal court, sitting as a court of equity, is without jurisdiction. The inquiry rather is whether, by the principles of common law and equity as distinguished and defined in this and the mother country at the time of the adoption of the Constitution of the United States, the relief here sought was one obtainable in a court of law or one which only a court of equity was fully competent to give.
the judgment in favor of the wife be set aside as fraudulent, that the defendant Simon Cohn be declared the real owner of the properties described, and that they be taken possession of by a receiver and sold to satisfy the judgments.
"A court of equity will aid a judgment creditor to reach the property of his debtor by removing fraudulent judgments or conveyances or transfers which defeat his legal remedy at law."
See also 3 Pomeroy's Eq.Juris. § 1415; Dockray v. Mason, 48 Me. 178; Edgell v. Haywood, 3 Atk. 352, 357; Burroughs v. Elton, 11 Ves. 33; Hendricks v. Robinson, 2 Johns.Ch. 283; Edmeston v. Lyde, 1 Paige, 637; Beck v. Burdett, 1 Paige 305; Cuyler v. Moreland, 6 Paige 273; Feldenheimer v. Tressel, 6 Dak. 265. It follows from these considerations that the circuit court erred in dismissing these bills for want of jurisdiction.
"Nor shall any circuit or district court 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.
This question has been settled adversely to the appellants, and in accord with the ruling of the circuit court, by the case of Walker v. Powers, 104 U. S. 245. That case arose under the same section. That presented, as this, a suit by the assignee of a judgment to set aside, as fraudulent, certain sales and conveyances of real estate made by the judgment debtor, and to subject it to the payment of the judgment. There were two judgments, and, after disposing of one, Mr. Justice Miller, speaking for the Court, said, as to the other:"
"In reference to the judgment in favor of Chester, on which, as his assignee, Whittemore asks relief, it is urged as ground of demurrer that, Chester being a citizen of the same state with Stewart, his assignee is incapable of prosecuting this suit in a federal court. It was brought in 1876, and the question here raised must be decided by a construction of the Act of March 3, 1875, c. 137, 18 Stat. pt. 3, p. 470. . . . That judgment is, then, the foundation of his suit in the circuit court. It is a cause of action which he holds by assignment from a party who cannot sue in that court. Without this cause of action, he has no standing in court, and has no right to ask the court to inquire into the other matters alleged in the bill. It is as much the foundation of his right to bring the present suit as if it were a bond and mortgage on which he was asking a decree of foreclosure. See Sheldon v. Sill, 8 How. 441. . . . The circuit court, if the judgment of Chester had been there recovered, might have jurisdiction of the case to remove obstructions to the enforcement of its own judgment, no matter who, for the time being, was its owner. But where a party comes for the first time in a court of the United States to obtain its aid in enforcing the judgment of a state court, he must have a case on which the former court can entertain original jurisdiction. Christmas v. Russell, 5 Wall. 290."
that is a question which need not now be considered, and is very different from the question here presented, of the right of the assignees of this state judgment to maintain in the federal courts an independent suit for its enforcement.
"in cases where the decree or judgment does not exceed the sum of five thousand dollars, the Supreme Court shall not review any question raised upon the record, except such question of jurisdiction."
It follows, therefore, that in this case, our inquiry must stop with that question of jurisdiction, which we have thus determined.
The decree of the circuit court dismissing these bills for want of jurisdiction must be reversed, and the consolidated case will be remanded to that court for further proceedings in accordance with the law.

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