The property involved in this suit is improved real estate in
the City of Washington, and the controlling question presented is
whether the sale of it under a deed of trust stands in the way of
its redemption by Mrs. Hitz upon her paying the debt secured by the
deed of trust.
As between the parties to the original cause, the title to the
real estate in question was bound for the filing of the cross-bill
by Mrs. Hitz.
The deeds which Mrs. Hitz sought to have set aside are valid and
enforceable instruments.
The sale by Tyler as trustee conferred no title as against Mrs.
Hitz.
Mrs. Hitz is entitled in this suit to redeem the property by
paying such sum as may be due on account of the debt to secure
which the deed to Tyler was made.
The case is stated in the opinion of the Court.
MR. JUSTICE HARLAN delivered the opinion of the Court.
The property involved in this suit is certain improved real
estate on the northeast corner of Ninth and G Streets in the City
of Washington, of which the appellant, who was the plaintiff below,
asserts ownership subject to the lien created by a deed of trust to
which reference will be presently made, but of which property the
heirs at law and devisees of the late William P. Jenks also assert
ownership in virtue of a conveyance to him by the purchaser at a
sale had under that deed by the trustee therein named while he held
the property as receiver -- such purchase having been in fact for
the benefit of Jenks, in whose favor the deed of trust was
executed.
Page 185 U. S. 156
This land had been inherited by Mrs. Hitz from her father after
her marriage to John Hitz in 1856. There were several children of
that marriage, and, as stated by the Court of Appeals, the husband
became entitled to an inchoate tenancy by the curtesy in the wife's
estate, which remained unaffected by the Married Woman's Act of
1869.
The controlling question presented on this appeal is whether the
sale under the deed of trust stands in the way of the redemption of
the property by Mrs. Hitz upon her paying the debt secured by the
above deed of trust.
The facts necessary to be stated in order to bring out clearly
the views of the respective parties touching that question are as
follows:
By a deed of trust dated January 26, 1876, John Hitz and his
wife, Jane C. Hitz, conveyed this real estate to R. B. Donaldson
and Charles E. Prentiss, trustees, to secure the payment of two
promissory notes of $10,000 each, executed January 5, 1876, by
William R. Chipley to E. P. Halstead, and by the latter indorsed to
the German-American Savings Bank.
Subsequently the above notes passed to and became the property
of the German-American National Bank, which succeeded the
German-American Savings Bank.
On the 16th day of June, 1877 (the deed to Donaldson and
Prentiss having been released of record), Hitz and wife by deed
conveyed the property to Sarah L. Crane, who, on June 18, 1877,
conveyed to Richard W. Tyler as trustee, to secure the payment of a
promissory note for $20,000 executed by the grantor, and made
payable to John Hitz or order three years after date, with interest
at the rate of eight percent per annum until paid, which note was
indorsed by the payee to William P. Jenks. Sarah L. Crane had no
interest in the transaction with Jenks, the real consideration for
the note being a loan of money by Jenks to the German-American
National Bank, of which John Hitz was president and Charles E.
Prentiss, a brother of Sarah L. Crane, was cashier. The title was
put in her name in order that she might execute the above note to
Jenks and make a deed of trust to secure its payment, which should
be a first lien on the property.
Page 185 U. S. 157
The deed to Tyler as trustee authorized him, upon default in the
payment of the note or any quarterly installment of interest
thereon at the rate aforesaid, or of any sums advanced for taxes
and insurance when demanded, or of any cost, charge, or commission,
to sell the land and premises, or as much thereof as might be
necessary at public auction to the highest bidder, upon such terms
and at such time and place as the trustee deemed best for the
interest of the parties concerned.
In October, 1878, the German-American National Bank failed, and,
by appointment of the Comptroller of the Currency, Benjamin U.
Keyser became its receiver. The latter (having first procured from
Sarah L. Crane a conveyance of such interest as she had after
satisfying the deed of trust to Tyler) obtained possession of the
property from Hitz., and proceeded, in his capacity as receiver of
the bank, to collect the rents.
Default having occurred in the payment of taxes and interest on
the Jenks note, Tyler as trustee gave notice by publication in a
newspaper that he would sell the property at public auction on the
20th day of January, 1879.
Thereupon, on the 10th day of January, 1879, Keyser as receiver
commenced his suit in equity in the Supreme Court of the District
of Columbia against John Hitz, Jane C. Hitz, Sarah L. Crane,
William P. Jenks, Richard W. Tyler, E. P. Halstead, R. P.
Donaldson, Charles E. Prentiss, and William R. Chipley. Part of the
relief asked was that, pending the cause, the defendants Jenks and
Tyler and each of them be restrained from advertising and selling
the property in question or in any manner interfering with it.
On the 21st of February, 1879, an order was entered restraining
the sale by Tyler.
All of the defendants filed answers, Jenks and Tyler resisting
the relief asked. Sarah L. Crane by cross-bill asked that the
conveyance from her to Keyser be vacated. Mrs. Hitz by cross-bill
claimed the property as hers, and prayed, upon various
grounds,
for the cancellation of the deed to Sarah L. Crane, as
well as the deed of the latter to Tyler, and for an accounting
in respect of rents and profits. She also charged that there had
been
a fraudulent alteration of the deed from her to
Page 185 U. S. 158
Sarah L. Crane. Answers to the various cross-bills were
also filed.
The cause having been heard at special term, the court, on the
28th of November, 1881, rendered a decree adjudging that the two
Chipley notes of $10,000 each had been paid, that the deed of
release by Donaldson and Prentiss was a valid instrument, that the
deed by Hitz and wife to Crane was null and void as to Mrs. Hitz,
that the deed to Tyler, trustee, was valid as to any interest in
the property which John Hitz had in virtue of his marital relation,
but was null and void as to Mrs. Hitz, and that the deed to Keyser
as receiver was null and void from its delivery.
That decree also provided that Keyser, receiver, be directed to
account to the court for whatever sums of money he might have
collected arising our of the property in question after the same
came into his possession, and that he immediately surrender
possession
"to Richard W. Tyler,
who is hereby appointed receiver,
to take possession of and rent and manage the same, and to collect
the rents and profits thereof, and apply the same, so far as may be
necessary, to the payment of taxes, insurance, and other expenses
needed to keep the said property in tenantable condition until the
further order of the court."
Keyser, Mrs. Hitz, and Jenks severally appealed to the general
term, and their appeals were allowed.
On the 5th day of December, 1881, Tyler gave a bond as receiver
of the court in the penalty of $5,000. But he did not take
immediate possession.
On the 15th day of December, 1881, an order was made at special
term that Keyser bring the rents and profits of the property
accruing after December 1, 1881, from month to month, into court,
and give bond as receiver of the German-American National Bank in
the penalty of $5,000, and the execution of the decree so far as it
transferred the property to the receiver therein named was stayed
until final decision. Keyser executed, December 16, 1881, the
required bond.
On the 11th day of December, 1883, the general term, upon final
hearing, rendered a decree in which, among other things, it was
stated that the court was of opinion
"that the complainant,
Page 185 U. S. 159
Benjamin U. Keyser, receiver, as the holder of the notes made by
William R. Chipley, is not entitled to any relief, and that the
deed of conveyance, dated the 16th of June, 1877, made by Jane C.
Hitz and John Hitz to Sarah L. Crane, in fee simple, conveyed as
well the right, title, interest, and estate of the said Jane C.
Hitz as of the said John Hitz in and to the real estate and
premises in said deed mentioned and referred to, and that there is
no equity shown in this cause to prevent or delay the execution
[or] enforcement of the deed of trust dated the 18th day of June,
1877, whereby the said Sarah L. Crane conveyed the said real estate
and premises to Richard W. Tyler in trust to secure the payment of
the debt to William P. Jenks, with interest and costs, as in and by
the said deed of trust mentioned and provided."
It was therefore adjudged that
"the injunction granted on the 21st of February, 1879, enjoining
the sale by the said Richard W. Tyler of the said real estate and
premises conveyed to him in trust [be], and the same is hereby,
dissolved, and that the decree in special term, so far as the same
holds that the said deed of conveyance from Jane C. Hitz and John
Hitz did not convey the right, title, interest, and estate of the
said Jane C. Hitz in and to the said real estate and premises, and
so far as the same retains the said injunction in respect of such
right, title, interest, and estate of the said Jane C. Hitz, be,
and the same is hereby, reversed."
The court adjudged that the deed from Crane to Keyser was void,
and directed that Keyser, as receiver, account for the rents and
profits received or which should have been received by him before
and after the decree in special term, the cause to be retained for
the purposes of such accounting.
The decree of the general term also provided:
"Fourth. That the order passed in special term on the 15th of
December, 1881, authorizing the collection of said rents and
profits by the complainant, be, and the same is hereby, revoked,
and that the said Richard W. Tyler be, and he is hereby, appointed
receiver, with power,
until a sale shall be made under
the said deed of trust, to take and hold possession of said
real estate and premises, and to rent and manage the same, and to
collect the rents and profits and apply the same to the
payments
Page 185 U. S. 160
of the taxes, insurance, and any proper expenses, and it shall
be the duty of the said receiver, after such application, to pay
from time to time the said rents and profits into court, and from
time to time to make report to the court of the manner in which he
has discharged his trust, and before entering upon the performance
of his office as receiver, the said Richard W. Tyler shall give
bond in the penal sum of five thousand dollars, and with a surety
or sureties to be approved by this court or one of the justices
thereof, conditioned for the faithful discharge of the trust hereby
reposed in him."
"Seventh. That this decree is without prejudice to the right of
any party entitled to the reversion of the said real estate and
premises, or any interest in such reversion, to redeem or to make
claim, as such party may be advised, to any balance or portion
thereof which, upon a sale under the said deed of trust and the
satisfaction of the debt secured thereby, with interest and costs,
and of the expenses of sale, may remain in the hands of the
trustee."
"Eighth. That, save so far as this cause is retained, as above
mentioned and decreed, the bill of the complainant, with the
amendment and supplement thereto, and to cross-bill of Jane C.
Hitz, with the amendment thereto, be, and the same are hereby,
dismissed."
Mrs. Hitz appealed from the above decree to this Court. The
appeal was allowed, and such allowance was recited in the decree.
On December 31, 1883, Mrs. Hitz executed and the court approved a
supersedeas bond in the penalty of $3,000.
In January, 1884, Keyser, in conformity with the decree of the
general term, surrendered possession of the property to Tyler, who
thereafter held it
as receiver appointed by the court. But
notwithstanding the allowance of Mrs. Hitz's appeal and the
approval of the supersedeas bond executed by her, Tyler, upon his
own motion, or by direction of Jenks, and in his capacity only
as trustee under the Crane deed, published, on March 3,
1884, a notice in a newspaper that he would, on the 26th day of
March, 1884, sell
for cash the property in question,
together with the improvements thereon, by virtue of the deed of
trust executed to him June 18, 1877. The notice did not
Page 185 U. S. 161
mention the fact that the property was in Tyler's hands as
receiver appointed by the court. But he was immediately notified in
writing by the attorney of Mrs. Hitz of the fact that she had
executed, and that the court in December, 1883, had approved, her
supersedeas bond. Tyler ignored that notice and sold the property
at public auction on the day named to one Seth Caldwell for the sum
of $29,200 -- the latter, it is conceded, making the purchase
in behalf of Jenks. On the next day, Tyler executed a
conveyance to Caldwell, who on April 9, 1884, conveyed to Jenks.
The proceeds of the sale lacked upwards of four thousand dollars of
discharging the debt due to Jenks.
It should be stated that, after the cause was removed to this
Court by appeal, an accounting was had below as to the rents and
profits collected or which should have been collected by Tyler as
receiver, and on July 13th, 1885, a claim of Mrs. Hitz was
disallowed, and the money in the registry of the court was ordered
to be paid to Tyler to be applied by him in discharge of taxes and
assessments accruing prior to January 1, 1884. From that order Mrs.
Hitz also appealed and executed a bond for costs.
The two appeals were heard in this Court, and each decree or
order appealed from was affirmed November 14, 1887.
Hitz v.
Jenks, 123 U. S. 297.
Pending the cause here, William P. Jenks died, and, the record
states, John Story Jenks, William Henry Jenks, and Evan Randolph,
executors, were made appellees.
The present suit was brought by Mrs. Hitz on the 6th day of
November, 1890, the defendants being the sole heirs at law and
devisees of Jenks, and Richard W. Tyler, Sarah L. Crane, and Enoch
Totten. Its object was to have the sale to Caldwell and the
conveyance by him to Jenks set aside and annulled. It is not
necessary, in view of the grounds upon which we will dispose of the
cause, to set forth all the allegations of the bill. It is
sufficient to say that it asked that the sale be set aside for the
following reasons:
"1. The property was in the possession and custody of a receiver
appointed by the court to take and keep possession
Page 185 U. S. 162
thereof and to collect the rents, and an approved supersedeas
bond in due form of law had been given on her appeal to the Supreme
Court of the United States from the decree of the general term, and
all proceedings were stopped, and no action could be legally taken
under said decree while said appeal remained pending."
"2. Said sale was void because the terms of sale were
unreasonable, because there were no bids, the bidders there, if
any, having been discouraged from bidding, because the pretended
sale was made pending an appeal in the cause to the Supreme Court
of the United States, because it was given out, stated, and
understood at the time of sale that it was intended to make the
sale in the face of said appeal for the purpose only of
transferring the title to the creditors, because the price bid and
accepted at said sale was so grossly inadequate as to amount to a
fraud upon the complainant, and because said pretended sale was
conceived and carried through solely in the interest of the
creditor, and in total disregard and in violation of the rights of
the complainant as the owner of the equity of redemption. She
therefore submits to the court that said pretended sale should be
set aside, and that she ought to be allowed to redeem said
property. She is willing and hereby offers to pay for the said
heirs at law of said Jenks whatsoever sum may be found justly due
to them for principal and interest on the said loan, and also for
all expenditures in and upon said property, after charging them
with the rents actually received, a fair accounting to be had under
the direction of this Court to ascertain the true balance due."
The relief prayed for was that the plaintiff be decreed to be
the owner of the above property,
subject to the debt to
secure the payment of which the deed to Tyler as trustee was given;
that the deed from Tyler to Caldwell be declared void, and that she
be allowed to redeem the property
by paying to the heirs of
Jenks what might be found due upon a proper accounting in reference
to the property; that Tyler be held chargeable as receiver,
and that he be compelled to account for the rents that had been or
should have been collected by him; that the heirs of Jenks be
restrained from selling or encumbering the property;
Page 185 U. S. 163
that a receiver be appointed to take charge of it and to collect
the rents, and that the plaintiff might have such other and further
relief as was just and equitable.
The answers were such as to meet all the material issues made by
the bill. Upon final hearing, the bill was dismissed with costs and
that decree was affirmed in the Court of Appeals of the
District.
We have seen that the relief asked by Mrs. Hitz in her
cross-bill in the original suit was a decree declaring that the
deed to Donaldson and Prentiss, the deed from herself and husband
to Sarah L. Crane, the deed from the latter to Tyler as trustee,
and the deed from Sarah L. Crane to Keyser as receiver were null
and void as to her. She asked to be put in possession of the
property, and that it might be conveyed to trustees for her sole
and separate benefit, so that it could not be interfered with by
her husband or his creditors. We have also seen that the special
term declared void as to Mrs. Hitz the deed to Sarah L. Crane, as
well as the deed to Tyler, trustee, and the deed to Keyser as
receiver. The general term reversed that decree, dissolved the
injunction restraining Tyler from selling the property under the
trust deed, and dismissed the suit. But Mrs. Hitz appealed to this
Court, and the decree of the general term reciting the allowance of
her appeal was superseded.
It is now said that the appeal from the special to the general
term in the Keyser case was only a step in the progress of the
cause during its pendency in the same court, and that the decree of
the general term took the place of the decree and orders in the
special term, and was the final decision in the cause;
consequently, it is argued, an appeal to this Court from the decree
of the general term, with supersedeas, could not have the effect to
reinstate or revive the decree of the special term, particularly
that part of it enjoining Tyler from selling under the trust deed.
Treating the decree of the general term as the final decision in
the original suit, and the only one that could have been reviewed
on the appeal in that cause to this Court, it is further contended
that such decree, although appealed from, was not in law superseded
so far as it dissolved the injunction -- no special order
having been made by the general
Page 185 U. S. 164
term or by this Court staying the execution of that part of the
decree pending the cause here. In other words -- and such was the
holding of the Court of Appeals -- the force of the decree
dissolving the injunction was not at all affected by the appeal
with supersedeas.
In the view we take of the case, it is unnecessary to discuss
these questions, and it may be assumed for the purposes of the
present examination that the positions just referred to are
correct. But does it follow that the decree of the general term in
the
Keyser case was not superseded so far as it ordered
the dismissal of Mrs. Hitz's cross-bill with costs, and declared
that she was not entitled to have the deed of her husband and
herself to Sarah L. Crane, as well as the deed to Tyler, trustee,
annulled and set aside, so far as her interests in the property
were concerned? We think not. The mere dissolution of the
injunction did not conclusively determine the merits of the cause
as disclosed by the pleadings. Notwithstanding such dissolution,
the way was open for Mrs. Hitz, by her appeal in the original
cause, to obtain a decision by this Court as to the validity of the
deed from herself and husband to Crane, and of the deed from Crane
to Tyler, trustee. If this Court had adjudged, upon that appeal,
that those deeds were void as to Mrs. Hitz, and had remanded the
cause for further proceedings, can it be doubted that the court
below could have granted the relief asked in her cross-bill by
setting aside not only the above deeds, but the sale made by Tyler
as trustee under the deed from Crane to him? If the order
dissolving the injunction was not affected by the appeal with
supersedeas, and if a stranger to the suit had purchased the
property at the sale by Tyler pending the
Keyser case
here, a different question would have been presented. But all
difficulty on that ground is avoided by the fact that the purchase
was in fact by the agent and representative of Jenks and for his
benefit. As between the plaintiff and Jenks, the title to the
property was bound from the filing of the bill. By the pleadings in
the cause, the parties had joined issue as to the validity of the
deed to Tyler, trustee and as to the right of Jenks to have the
property sold under that deed. Jenks and Tyler, being parties to
the cause, could not avoid the final determination
Page 185 U. S. 165
of that issue in this Court by any direction from the former to
Tyler to sell the property under the deed of trust, and by becoming
the purchaser through an agent.
We have made these observations for the purpose of showing that
the mere dissolution of the injunction by the general term and the
subsequent sale at public auction under the trust deed by Tyler --
whether acting upon his own motion or by direction of Jenks is
immaterial -- do not preclude an inquiry in the present suit as to
the validity of the sale made by Tyler in his capacity as trustee,
pending the
Keyser cause here upon appeal by Mrs. Hitz
with supersedeas. This question will now be examined.
Tyler, as trustee under the Crane deed, advertised and sold the
property while in his possession as receiver appointed by the
court. This was done by him after the removal of the cause to this
Court, and without any special order of court allowing him to take
that course. As receiver, he held the property for the court and
for the benefit of all the parties asserting an interest in it,
including Mrs. Hitz. While in his hands as receiver, the property
was in the custody of the law. As a party to the cause he, as well
as Jenks, whom he represented as trustee, knew that Mrs. Hitz, by
her cross-bill, sought to have the deed under which he proceeded
set aside as void. What he did as trustee tended to defeat the
rendition here of any effective decree in favor of Mrs. Hitz, even
if this Court, upon her appeal, had directed such a decree to be
entered. That this Court affirmed the decree appealed from did not
change the fact that the title to property in the custody of the
law, by a receiver, was attempted to be changed by that receiver,
acting without special leave of court and under a private deed of
trust, the validity of which was in issue in the very case in which
the receiver was appointed. If this Court had decided that Mrs.
Hitz was entitled on her cross-bill to have the deed made by
herself and husband to Crane, and the deed by the letter to Tyler,
set aside, and had remanded that cause with directions to enter a
decree to that effect, the court below would have been confronted
with the fact that its own receiver, in his capacity as private
trustee and without leave or direction to that end, had sold the
property at public auction for cash to the party in whose interest
he had been made trustee,
Page 185 U. S. 166
and who was the principal adversary of Mrs. Hitz, one of the
parties for whom he held possession as receiver. Let us look at
some of the authorities on this general subject.
In
Wiswall v.
Sampson, 14 How. 52,
55 U. S. 65, it
was said:
"When a receiver has been appointed, his possession is that of
the court, and any attempt to disturb it, without the leave of the
court first obtained, will be a contempt on the part of the person
making it. This was held in
Angel v. Smith, 9 Ves. 335,
both with respect to receivers and sequestrators. When, therefore,
a party is prejudiced by having a receiver put in his way, the
course has either been to give him leave to bring an ejectment or
to permit him to be examined
pro interesse suo. Brooks
v. Greathed, 3 Daniel's Pr.1984. And the doctrine that a
receiver is not to be disturbed extends even to cases in which he
has been appointed expressly without prejudice to the rights of
persons having prior legal or equitable interests. And the
individuals having such prior interests must, if they desire to
avail themselves of them, apply to the court either for liberty to
bring ejectment or to be examined
pro interesse suo, and
this though their right to the possession is clear. 1 Cox 422; 6
Ves. 287. The proper course to be pursued, says Mr. Daniel in his
valuable treatise on Pleading and Practice in Chancery, by any
person who claims title to an estate or other property sequestered,
whether by mortgage or judgment, lease or otherwise, or who has a
title paramount to the sequestration, is to apply to the court to
direct the plaintiff to exhibit interrogatories before one of the
masters in order that the party applying may be examined as to his
title to the estate. An examination of this sort is called an
examination
pro interesse suo, and an order for such
examination may be obtained by a party interested as well where the
property consists of goods and chattels, or personalty, as where it
is real estate. And the mode of proceeding is the same in the case
of the receiver. 6 Ves. 287; 9 Ves. 336; 1 J. & W. 178; 3
Daniel's Pr.1984."
Again:
"The settled rule also appears to be that, where the subject
matter of the suit in equity is real estate, and which is taken
into the possession of the court pending the litigation by the
appointment of a receiver or by sequestration,
the title
is
Page 185 U. S. 167
bound from the filing of the bill, and
any
purchaser
pendente lite, even if for a valuable
consideration, comes in at his peril. 3 Swanst. 278, n. 298; 2
Daniel's Pr. 1267; 6 Ves. 287; 9 Ves. 336; 1 J. & W. 178;
Daniel's Pr. 1984."
It was contended in that case that a sale of the premises on
execution and purchase occasioned no interference with the
possession of the receiver, and hence no contempt of the authority
of the court, and that the sale therefore in such a case should be
upheld. But this Court, in words that are strikingly applicable in
the present case, thus disposed of that contention:
"Conceding [that] the proceedings did not disturb the possession
of the receiver, the argument does not meet the objection.
The
property is a fund in court, to abide the event of the
litigation and to be applied to the payment of the judgment
creditor who has filed his bill to remove impediments in the way of
his execution. If he has succeeded in establishing his right to the
application of any portion of the fund, it is the duty of the court
to see that such application is made. And in order to effect this,
the court must administer it independently of any rights acquired
by third persons pending the litigation. Otherwise the whole fund
may have passed out of its hands before the final decree, and the
litigation become fruitless. It is true, in administering the fund,
the court will take care that the rights of prior liens or
encumbrances shall not be destroyed, and will adopt the proper
measures, by reference to the master or otherwise, to ascertain
them, and bring them before it. Unless the court be permitted to
retain the possession of the fund thus to administer it, how can it
ascertain the interest in the same to which the prosecuting
judgment creditor is entitled, and apply it upon his demand? . . .
But it is not necessary to go this length in the case before us, as
it is sufficient to say that the
sale under the judgment,
pending the equity suit, and while the court was in possession
of the estate, without the leave of the court, was illegal and
void. We do not doubt but that it would be competent for the
court, in case the judgment creditor holding the prior lien had not
come in and claimed his interest in the equity suit, to decree a
sale in the final disposition of the fund subject to his judgment.
The purchaser would then be bound to pay it off.
Page 185 U. S. 168
But this disposition of the legal prior encumbrance is a very
different matter, and comes to a very different result from that of
permitting the enforcement of it,
pendente lite, without
the leave of the court. The rights of the several claimants to the
estate or fund is then settled, and the purchase under the decree
can be made with a full knowledge of the condition of the title or
charges to which it may be subject."
So in
Heidritter v. Elizabeth Oilcloth Co.,
112 U. S. 294,
which was the case of a sale of property under process from a state
court while it was in the actual possession of a district court of
the United States. When the sale took place, the property
had
passed out of the possession of the federal court, and there
was no actual disturbance of such possession. Nevertheless, this
Court held the sale to be void under the doctrine of
Wiswell v.
Sampson, saying:
"The same conclusion must prevail here, for, although the sale
under the judgments in the state court was not made until after the
property had passed from the possession of the district court by
delivery to the purchaser at the sale under the decree, yet the
initial step on which the sheriff's sale depended --
the
commencement of the proceedings to enforce the mechanic's
lien, asserting the jurisdiction and control of the state
court over the property sold -- took place when that property was
in the exclusive custody and control of the district court, and by
reason of its prosecution to a sale was an invasion of the
jurisdiction of that court. No stress is laid on the fact that
notice of the proceeding, by affixing a copy of the summons upon
the building, which was required by the statute, could only be made
by an actual entry by the sheriff upon the property, to that extent
disturbing the possession of the marshal, because the same result,
in our opinion, would have followed if no such notice had been
required or given. The substantial violation of the jurisdiction of
the district court consisted in the control over the property in
its possession, assumed and asserted, in commencing the proceedings
to enforce against it the lien claimed by the plaintiffs in those
actions, prosecuting them to judgment, and consummating them by a
sale. The principle applied in
Wiswall v. Sampson, ubi
supra, must be regarded as firmly established in the decisions
of this Court. It
Page 185 U. S. 169
has been often approved and confirmed.
Peale v.
Phipps, 14 How. 368;
Hagan v.
Lucas, 10 Pet. 400;
Williams v.
Benedict, 8 How. 107;
Pulliam v.
Osborne, 17 How. 471;
Taylor v.
Carryl, 20 How. 583;
Yonley v.
Lavender, 21 Wall. 276;
People's Bank v.
Calhoun, 102 U. S. 256;
Barton v.
Barbour, 104 U. S. 126;
Covell v.
Heyman, 111 U. S. 176."
We are not aware of any decision of this Court modifying the
rule laid down in these cases.
To the same effect are
Walling v. Miller, 108 N.Y. 173;
Porter v. Kingman, 126 Mass. 141;
Dugger v.
Collins, 69 Ala. 324;
Thompson v. McCleary, 159
Pa.191;
Ellis v. Vernon Ice, Light & Water Co., 86
Tex. 109; High on Receivers, 3d ed., 141; Kerr on Receivers, 2d
ed., 177.
In view of what has been said in the adjudged cases, it is clear
that,
as between the parties to the original cause, the
title to the real estate in question was bound from the filing of
the cross-bill of Mrs. Hitz, and that her appeal, with supersedeas,
from the decree of the general term preserved her right to have
this Court determine the whole cause upon the merits, as from the
commencement of her suit and as between her and the parties hostile
to her claim. It is also clear under the authorities that if Tyler,
while holding as receiver, had, in a separate suit against Sarah L.
Crane, obtained a decree for its sale under the deed of trust, no
title would have been acquired by the purchaser at such a sale.
Still less could any title be acquired under a sale at public
auction by Tyler acting in his capacity as private trustee, the
property being at the time in his possession as receiver in another
cause
to which he was a party, and which had at the time
been removed to this Court by appeal with supersedeas. As receiver
he held the property for Mrs. Hitz as well as for Jenks, and he
could not throw off the responsibility attaching to him in that
capacity and act, pending the appeal, simply as a private trustee
under the deed from Sarah L. Crane.
But it is said that the decree of the general term must be
construed as authorizing Tyler as trustee, in his discretion, to
sell the property while in his possession as receiver after the
appeal from that decree by Mrs. Hitz had been perfected and
Page 185 U. S. 170
a supersedeas bond executed and approved. A complete answer to
this suggestion is that Tyler sought no such relief at the hands of
the court. He asked no affirmative relief. He only desired that the
court should not restrain him by injunction from acting under the
deed of trust.
The words in the decree,
"and he [Tyler] is hereby appointed receiver with power,
until a sale shall be made under the said deed of trust,
to take and hold possession of said real estate and premises, and
to rent and manage the same, and to collect the rents and profits
and apply the same to the payment of taxes, insurance, and any
proper expenses,"
did not confer any direct authority on Tyler as trustee to sell
the property.
The court, having recited in the decree the allowance to Mrs.
Hitz of an appeal, knew that such allowance removed the whole cause
to this Court,
Ridings v. Johnson, 128 U.
S. 212,
128 U. S. 218;
United States v. Rio Grande Dam and Irrigation Co.,
184 U. S. 416, and
that this Court could determine, at least as between the parties,
whether the deed of trust to Tyler was a valid instrument so far as
it affected the rights of Mrs. Hitz. It knew that one of the
questions to be determined upon her appeal was as to Tyler's right
to proceed under that deed. We should not therefore interpret the
words referred to as intended to authorize, much less direct,
Tyler, the receiver for all the parties and the representative of
the court, to proceed in his private capacity as trustee for one of
the parties to sell the property outright, without any special
order or direction to that effect. Neither Tyler nor Jenks, by
their pleadings, asked for any such direction or authority from the
court. The words "until a sale shall be made under said deed of
trust," reasonably interpreted, meant no more than that the
power of Tyler as receiver to take and hold possession of
the property
for the purposes designated should continue
until there had been such a sale under the deed of trust as could
properly and legally be made and such as would give the purchaser a
good title. By dissolving the injunction -- which was a matter of
judicial discretion -- the court in effect declared nothing more
than that it would not by injunction restrain the trustee from
doing what he might rightfully do under the deed to him. It did
not, we must assume,
Page 185 U. S. 171
intend to direct or authorize a sale by the trustee whereby the
right of Mrs. Hitz to have a final determination upon her appeal in
the original cause as to the binding force, as between the parties,
of the deeds purporting to pass her interest in the property would
be overreached or defeated.
Other questions were discussed at the bar, but they do not
require to be specially noticed.
In our judgment, it must be held: (1) that the deeds which Mrs.
Hitz sought by her cross-bill to have set aside are to be deemed
valid and enforceable instruments, it having been so adjudged in
Hitz v. Jenks, 123 U. S. 297; (2)
that the sale by Tyler as trustee, on the 26th day of March, 1884,
while holding possession of the property as receiver, and when the
suit to which he was a party was pending here upon appeal with
supersedeas, conferred no title upon Jenks as against Mrs. Hitz;
(3) that, as no sale has been made under the deed from Sarah L.
Crane to Tyler, trustee, which would bind Mrs. Hitz, she is
entitled in this suit to redeem the property by paying such sum as
may be due on account of the debt to secure which that deed was
executed, that sum to be ascertained by an accounting in the court
of original jurisdiction, and the amount of all rents collected and
all sums expended in the preservation or protection of the property
to be taken into consideration.
It results that the decree of the Supreme Court of the District
of Columbia dismissing the bill in the present suit, and the decree
of the Court of Appeals affirming that decree, were both
erroneous.
The decree of the Court of Appeals of the District is
reversed, and the cause remanded to that court, with directions to
reverse the decree of the Supreme Court of the District, and for
such further orders in each court as will be in conformity with the
principles of this opinion.
MR. JUSTICE BREWER dissented.