Source: https://caselaw.findlaw.com/us-supreme-court/150/202.html
Timestamp: 2019-04-24 22:56:15+00:00

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The facts in this case are as follows: On March 29, 1881, Joel Wood and William H. Lee, citizens of the state of Missouri, partners as Wood & Lee, obtained a judgment in the eighth district court of the parish of East Carroll, La., against Simon Cohn, a citizen of the state of Louisiana, for $529.25, with interest, for goods sold by them to him on October 30, 1880. On April 2, 1881, S. B. Newman and S. D. Stockman, composing the firm of S. B. Newman & Co., also obtained a judgment in the same court against said Cohn for [150 U.S. 202, 203] $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 Lousiana 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, La., 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.
Edward Cunningham, Jr., for appellants.
No appearance has been made for the appellees in this court, and we should be at a loss to know the grounds for the decision [150 U.S. 202, 204] of the circuit court, were it not for the opinion of District Judge Boarman, before whom the case was heard, (39 Fed. Rep. 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.
We are unable to concur in these views. It is well settled that the jurisdiction of the federal courts, sitting as courts of equity, is neither enlarged nor diminished by state legislation. Though by it all differences in forms of action be abolished, [150 U.S. 202, 205] though all remedies be administered in a single action at law, and so far, at least, as form is concerned, all distinction between equity and law be ended, yet the jurisdiction of the federal court, sitting as a court of equity, remains unchanged. Thus, in Payne v. Hook, 7 Wall. 425, 430, it was said, citing several cases: 'We have repeatedly held '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.' And in McConihay v. Wright, 121 U.S. 201, 205 , 7 S. Sup. Ct. Rep. 940: '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 , 11 Sup. Ct. Rep. 712; Cates v. Allen, 149 U.S. 451 , 13 Sup. Ct. Rep. 883, 977, -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.
So, conceding it to be true, as stated by the learned judge, [150 U.S. 202, 206] 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.
In order to determine this question, a further statement is necessary of the facts disclosed in, and the exact relief sought by, the bills. After the allegations in respect to the judgments, the bills aver that in 1879 and 1880 the defendants entered into a conspiracy to defraud and despoil the creditors of Simon Cohn; that he proceeded to carry out this scheme by purchasing from plaintiffs and others a large amount of goods, on credit, and selling them for cash at a great sacrifice, and these moneys he had so placed as to be beyond the reach of his creditors. The means by which these goods were received and disposed of are stated at some length. Further, and as is alleged, in carrying out this scheme, he fraudulently procured his wife to institute a suit for moneys, when none was due from him to her, and he, not defending, to recover a judgment for $ 4,000, as her separate estate, by which any property in his name could be sold, and the title transferred to his wife. Also, he executed a mortgage for $5,800 on certain real estate, to wit, six lots in the town of Providence, and a fine brick storehouse thereon, in favor of his brother,- a mortgage which was in fact without any consideration. Thereafter, his brother foreclosed such mortgage, and on foreclosure the property was purchased in the name of Mrs. Steinhardt,-Simon Cohn's mother-in-law. Other property described was purchased in the name of Mrs. Steinhardt, although the money paid therefor was furnished by Cohn, and was part of that realized from the cash sales heretofore mentioned. All his property had in fact been placed in the name of Mrs. Steinhardt, and he was carrying on business, ostensibly, in her name, though all the while the real owner. The prayer of the bills is that [150 U.S. 202, 207] 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.
It will be seen from this statement that these bills were substantially creditors' bills, to subject property-in fact, the property of the defendant, but fraudulently standing in the name of a third party- to the payment of those judgments, and to remove a fraudulent judgment which might stand as a cloud upon the title of the debtor. Such suits have always been recognized as within the jurisdiction, of equity. In 2 Beach, Mod. Eq. Jur. 883, it is said: '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 Pom. Eq. Jur. 1415; Dockray v. Mason, 48 Me. 178; Edgell v. Haywood, 3 Atk. 357; Burroughs v. Elton, 11 Ves. 33; Hendricks v. Robinson, 2 Johns. Ch. 283; Edmeston v. Lyde, 1 Paige, 637; Beck v. Burdett, Id. 305; Cuyler v. Moreland, 6 Paige, 273; Feldenheimer v. Tressel, 6 Dak. 265, 43 N. W. Rep. 94. It follows from these considerations that the circuit court erred in dismissing these bills for want of jurisdiction.
It may be that, when the appellants obtain the relief they seek in respect to the judgments rendered in their own favor in the federal court, and the property of the defendants has been sold by a receiver, or otherwise, the owners of this Newman judgment may intervene in the case, and apply for a share of the funds. Payne v. Hook, 7 Wall. 425, 432. But [150 U.S. 202, 209] 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.
The act which gives this court jurisdiction (25 Stat. 693) provides that, '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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