The eleventh section of the Judiciary act of 1789 says
"Nor shall any district or circuit court have cognizance of any
suit to recover the contents of any promissory note or other chose
in action in favor of an assignee unless a suit might have been
prosecuted in such court to recover the said contents if no
assignment had been made except in cases of foreign bills of
exchange."
This clause has no application to the case of a suit by the
assignee of a chose in action to recover possession of the thing in
specie, or damages for its wrongful caption or detention.
Therefore where an assignee of a package of bank notes brought
an action of replevin for the package, the action can be maintained
in the circuit court, although the assignor could not himself have
sued in that court.
This was an action of replevin brought by Deshler, a resident
and citizen of the State of New York, against Dodge, a citizen and
resident of the State of Ohio.
The proceedings in the case were these:
In March, 1853, Deshler filed in the Circuit Court of the United
States for the District of Ohio the following praecipe and
affidavit.
"
Praecipe. Issue a writ of replevin for the following
goods and chattels, to-wit, a quantity of bank bills of various
denominations, consisting of fives, tens, twenties, and fifties,
given for the payment, in the aggregate, of the sum of ten thousand
five hundred and eighty dollars, being the same bank bills taken by
the said George C. Dodge, from the City Bank of Cleveland on the
26th day of March, 1853. Also another quantity of bank bills of
various denominations consisting of ones, twos, threes, fours,
fives, tens, twenties, fifties, and hundreds and given for the
payment, in the aggregate, for the sum of seven thousand nine
hundred sixty-five dollars, being the same bank bills taken by the
said George C. Dodge, from the Merchants Bank of Cleveland on the
26th day of March, A.D. 1853. Also another quantity of bank bills
of various denominations, consisting of ones twos,
Page 57 U. S. 623
threes, fives, tens, twenties, fifties, and hundreds, and given
for the payment, in the aggregate, of the sum of nine thousand two
hundred and sixteen dollars, being the same bank bills taken by the
said George C. Dodge from the Canal Bank of Cleveland on the 26th
day of March, A.D. 1853. Also another quantity of bank bills of
various denominations, consisting of ones, twos, threes, fives,
tens, twenties, fifties, and hundreds, and given for the payment,
in the aggregate, of the sum of eleven thousand two hundred and
twenty dollars, being the same bank bills taken by the said George
C. Dodge, from the Commercial Bank of Cleveland, on the 26th day of
March, A.D. 1853."
"
Affidavit. John G. Deshler, plaintiff in the case in
the annexed praecipe named, being first duly sworn, does depose and
say that he has good right to the possession of the goods and
chattels described in the annexed praecipe, and that the same are
wrongfully detained by the said George C. Dodge, named as defendant
in the said praecipe, and that the said goods and chattels were not
taken in execution on any judgment against the said John G.
Deshler, nor for the payment of any tax, fine, or amercement
assessed against the said Deshler, nor by virtue of any writ of
replevin or any other mesne or final process whatsoever issued
against the said Deshler. Said Deshler further makes oath and says,
that he is a citizen and resident of the State of New York, and
that the said George C. Dodge is a citizen and a resident of the
State of Ohio."
"
U.S. America, District of Ohio, ss. JOHN G.
DESHLER"
The writ was issued accordingly, and served by the marshal. The
property was appraised at $38,592. Deshler gave the usual replevin
bond.
At April term, 1853, Dodge made the following motion:
"And now comes the said George C. Dodge, by R. P. Spalding, his
attorney, and moves the court for a rule on the plaintiff to show
cause, during the present term, why the said suit should not stand
dismissed for all and singular the reasons following, to-wit: "
"1st. Because there is no sufficient affidavit filed by
plaintiff as a predicate for the writ of replevin."
"2d. Because it does not comport with sound public policy that
any portion of the revenue of the state should be arrested, at the
instance of the taxpayers or other person for his benefit, and
taken from the hands of the collector through the instrumentality
of the writ of replevin."
"3d. Because the several bank bills in the writ specified were
assigned to the plaintiff by said several banks in the City of
Cleveland for the sole purpose of instituting suit in this court.
"
Page 57 U. S. 624
"4th. Because said assignment from said banks to said John G.
Deshler was colorable merely, and operates as a fraud upon the Act
of Congress of September 24, 1789, establishing the judicial courts
of the United States."
"5th. Because this court is debarred taking jurisdiction of this
case by a provision contained in the eleventh section of said Act
of Congress of September 24, 1789, in the words following:"
" Nor shall any district or circuit court have cognizance of any
suit to recover the contents of any promissory note or other chose
in action in favor of any assignee unless a suit might have been
prosecuted in such court to recover the said contents if no
assignment had been made, except in cases of foreign bills of
exchange."
"It being admitted, for the purposes of this motion, that the
said John G. Deshler derived all his right to said bank notes from
an assignment in writing made to him by the Commercial Bank, the
Merchants Bank, the City Bank, and the Canal Bank of Cleveland, all
corporate bodies in the State of Ohio, after the seizure of the
said bank bills by the said George C. Dodge, as Treasurer of
Cuyahoga County, to satisfy sundry taxes assessed against said
banks."
"R. P. SPALDING"
"
Attorney for defendant"
In August, 1853, the court overruled the motion, but permitted
the defendant to set up the same matter, by plea.
At the same term, the plaintiff, Deshler, filed his declaration,
and Dodge filed the following plea:
"And the said George C. Dodge, in his own proper person, comes
and says that this court ought not to have or take further
cognizance of the action aforesaid, because he says that on the day
and year in the said declaration mentioned, to-wit, on the
twenty-sixth day of March in the year one thousand eight hundred
and fifty-three, he, the said George C. Dodge, was acting as
Treasurer of the County of Cuyahoga in the State of Ohio, and as
such treasurer on the day and year last mentioned, at Cleveland, in
the County of Cuyahoga aforesaid, held in his hands for collection
the tax duplicate of said County of Cuyahoga, for the year one
thousand eight hundred and fifty-two, upon which tax duplicate
sundry large amounts of taxes stood assessed against the several
banks in the plaintiff's declaration mentioned, to-wit, against the
City Bank of Cleveland, the Merchants Bank of Cleveland, the Canal
Bank of Cleveland, and the Commercial Bank of Cleveland, which said
taxes, with a large amount of penalty thereon, were then due and
unpaid, and it then and there became, and was the official duty of
the said George C. Dodge, as such treasurer, to distrain a
sufficient amount of bank bills belonging to said banks and in
their possession,
Page 57 U. S. 625
respectively, to satisfy the said taxes and penalties, amounting
in the aggregate to a large sum of money, to-wit, to the sum of
thirty-eight thousand nine hundred and eighty-one dollars. And the
said George C. Dodge did in fact, then and there, to-wit, on the
26th day of March, in the year one thousand eight hundred and
fifty-three, at the City of Cleveland, in the County of Cuyahoga
aforesaid, enter into said banks and take and distrain from them,
respectively, the amount of taxes and penalty as aforesaid, to-wit:
from the City Bank of Cleveland he took and distrained the sum of
ten thousand five hundred and eighty dollars in bank bills of
various denominations, consisting of fives, tens, twenties, and
fifties, the same being at the time said distress was made the
exclusive property of said City Bank of Cleveland. From the
Merchants Bank of Cleveland he took and distrained the sum of seven
thousand nine hundred and sixty-five dollars in bank bills of
various denominations, consisting of ones, twos, threes, fours,
fives, tens, twenties, fifties, and hundreds, the same being at the
time said distress was made the exclusive property of said
Merchants Bank of Cleveland. From the Canal Bank of Cleveland he
took and distrained the sum of nine thousand two hundred and
sixteen dollars in bank bills of various denominations, consisting
of ones, twos, threes, fives, tens, twenties, fifties, and
hundreds, the same being at the time said distress was made the
exclusive property of said Canal Bank of Cleveland. And from the
Commercial Bank of Cleveland he took and distrained the sum of
eleven thousand two hundred and twenty dollars in bank bills of
various denominations, consisting of ones, twos, threes, fives,
tens, twenties, fifties, and hundreds, the same being at the time
said distress was made the exclusive property of said Commercial
Bank of Cleveland. And the said George C. Dodge, having thus then
and there taken and distrained said bank bills, being all and
singular the bank bills in the plaintiff's declaration set forth
and described, immediately, to-wit, on the twenty-sixth day of
March, in the year one thousand eight hundred and fifty-three
aforesaid, removed said several bank bills from said several banks,
respectively, to a place of security, to-wit, to the vault of the
Cleveland Insurance Company, where the same were specially
deposited by the said George C. Dodge, and where the same in fact
remained to the credit of the said George C. Dodge as a special
deposit, until they were afterwards seized and taken by force of
the writ of replevin issued at the instance of the said John G.
Deshler, plaintiff in this suit."
"And the said George C. Dodge further saith that on the same
twenty-sixth day of March, A.D. 1853, but after the said George C.
Dodge had so as aforesaid distrained, and taken away from
Page 57 U. S. 626
the possession and keeping of the said several banks herein
before mentioned, the said bank bills above mentioned, and after he
had deposited the same for safekeeping in the vault of the
Cleveland Insurance Company in manner aforesaid the said several
banks above mentioned, all of which were incorporated by the laws
of the State of Ohio to transact a general banking business in said
City of Cleveland, in the County of Cuyahoga aforesaid, and not
elsewhere, and all of which in fact were at the time said taxes
were assessed, and at the time the said bank bills were so as
aforesaid distrained for the payment of said taxes, transacting a
general banking business in the City of Cleveland aforesaid,
entered into an arrangement with the said John G. Deshler, the
plaintiff in this suit, who claims to be a citizen and resident in
the State of New York, whereby the said several banks, by written
instruments of assignment, bearing date on the said twenty-sixth
day of March, A.D. 1853, and executed in behalf of said banks by
their cashiers or other agents duly authorized by the directors of
the same, sold, assigned, and transferred to the said John G.
Deshler, plaintiff in this suit, all and singular the bank bills so
as aforesaid taken and distrained by the said George C. Dodge, and
which said bank bills were, by the express terms of said several
assignments in writing, declared to be then, and at the time of the
execution of said several instruments of assignment, in the
possession of George C. Dodge, Treasurer of the County of Cuyahoga,
in the State of Ohio."
"And the said George C. Dodge further saith that before and at
the time of the taking and distraining said several bank bills for
the payment of said taxes and penalties assessed as aforesaid
against said several banks, he, the said John G. Deshler, had no
right of property in, or claim to, the possession of said several
bank bills whatsoever, but that all the pretended right, interest,
and claim of the said John G. Deshler thereto arose under and by
virtue of said several instruments of assignments, executed and
delivered long after said bank bills had been taken and distrained
by the said George C. Dodge, as treasurer as aforesaid, in
satisfaction of the taxes and penalty so due as aforesaid from said
banks, and while the said bank bills were on special deposit in the
vault of the said Cleveland Insurance Company to the credit of the
said George C. Dodge, treasurer as aforesaid. And the said George
C. Dodge further saith that he is a citizen of and resident in the
State of Ohio, and was such at the time when this suit was
instituted, and that all and singular said banks are corporate
bodies of said State of Ohio, and have not now and never had any
legal existence except within the limits of said state. And so the
said George C. Dodge pleads, and
Page 57 U. S. 627
says, that said supposed causes of action are not within the
jurisdiction of this court, and this he is ready to verify; whereof
he prays judgment whether this Court can or will take further
cognizance of the action aforesaid."
"GEORGE C. DODGE"
This plea was verified by affidavit.
The plaintiff demurred to this plea, when the court overruled
the demurrer and sustained the plea upon the ground
"that the matters therein contained are sufficient in law to
preclude the said Deshler from having and maintaining said action
against the said Dodge in this Court, and that the court has no
jurisdiction of the same."
Deshler sued out a writ of error, and brought the case up to
this Court.
Page 57 U. S. 630
MR. JUSTICE NELSON delivered the opinion of the Court.
The suit below was an action of replevin to recover the
possession of a quantity of bank bills, in the hands of the
defendant, upon banks in the City of Cleveland amounting in the
whole to the sum of thirty-eight thousand five hundred and
ninety-two dollars, and the title to which was derived by an
assignment from the banks to the plaintiff. The declaration is in
the usual form for wrongfully and unjustly detaining the possession
of the property, the plaintiff averring that he is a citizen and
resident of the State of New York; and the defendant a citizen and
resident of the State of Ohio.
To this declaration the defendant plead to the jurisdiction of
the court, setting up that the defendant was Acting Treasurer of
the County of Cuyahoga, Ohio, and had distrained the bills in
question belonging to the banks to satisfy the taxes and penalties
duly imposed upon them, and that after the said bills had been thus
distrained and in his possession, the said banks being incorporated
companies by the laws of the State of Ohio, and doing business in
the City of Cleveland, sold, assigned, and transferred the same to
the plaintiff, and that all the right and title to the said bills
belonging to him is derived from the aforesaid assignment,
wherefore the defendant says the supposed causes of action are not
within the jurisdiction of the court, and prays judgment if it will
take further cognizance of the suit.
To this plea the plaintiff demurred, and the defendant joined in
demurrer, upon which judgment in the court below was given for the
defendant.
The only question presented in the case by either of the parties
is whether or not the court below had jurisdiction of the case
within the true meaning of the 11th section of the Judiciary Act of
1789, the material part of which is as follows:
"Nor shall any
Page 57 U. S. 631
district or circuit court have cognizance of any suit to recover
the contents of any promissory note or other chose in action in
favor of an assignee unless a suit might have been prosecuted in
such court to recover the said contents if no assignment had been
made, except in cases of foreign bills of exchange."
It is admitted the assignors in this case could not have
maintained the suit in the federal courts. We are of opinion that
this clause of the statute has no application to the case of a suit
by the assignee of a chose in action to recover possession of the
thing in specie, or damages for its wrongful caption or detention,
and that it applies only to cases in which the suit is brought to
recover the contents, or to enforce the contract contained in the
instrument assigned.
In the case of a tortious taking, or wrongful detention of a
chose in action against the right or title of the assignee, the
injury is one to the right of property in the thing, and it is
therefore unimportant as it respects the derivation of the title;
it is sufficient if it belongs to the party bringing the suit at
the time of the injury.
The distinction as it respects the application of the 11th
section of the Judiciary act to a suit concerning a chose in action
is this -- where the suit is brought to enforce the contract, the
assignee is disabled unless it might have been brought in the court
if no assignment had been made; but if brought for a tortious
taking or wrongful detention of the chattel, then the remedy
accrues to the person who has the right of property or of
possession at the time, the same as in case of a like wrong in
respect to any other sort of personal chattel.
The principle governing the case will be found in cases that
have frequently been before us arising out of the assignment of
mortgages, where it has been held if the suit is brought to recover
the possession of the mortgaged premises, the assignee may bring
the suit in the federal courts if a citizen of a state other than
that of the tenant in possession, whether the mortgagee could have
maintained it or not within this section; but if brought to enforce
the payment or collection of the debt by sale of the premises or by
a decree against the mortgagor, then the assignee is disabled
unless the like suit could have been maintained by the mortgagee.
48 U. S. 7 How.
198. This distinction is stated by MR. JUSTICE GRIER in the case of
Sheldon v.
Sill, 8 How. 441. The learned Justice, in
delivering the opinion of the Court in that case, observed
"that the term 'chose in action' is one of comprehensive import.
It includes the infinite variety of contracts, covenants, and
promises which confers on one party a right to recover a personal
chattel, or sum of money from another, by action."
This paragraph has been relied on
Page 57 U. S. 632
to sustain the plea in question; but other portions of this
opinion will show, that the phrase "right to recover a personal
chattel" was not meant a recovery in specie, or damages for a
tortious injury to the same, but a remedy on the contract for the
breach of it, whether the contract was for the payment of money or
the delivery of a personal chattel. Indeed, upon a close
examination, this is the fair import of the language used, as he
was speaking of the contract in the instrument assigned, not of the
sale or transfer of it.
We have looked simply at the question of jurisdiction in the
case, as that is the only question raised by the plea, and as we
are satisfied that the demurrer to it is well taken, the judgment
of the court below should be
Reversed with costs and proceedings remitted, with
directions that judgment be given for the plaintiff that the
defendant answer over.
MR. CHIEF JUSTICE TANEY, MR. JUSTICE CATRON, MR. JUSTICE DANIEL,
and MR. JUSTICE CAMPBELL, dissented.
MR. JUSTICE CATRON, dissenting.
The defendant, Dodge, was Treasurer and Tax Collector of
Cuyahoga County, in Ohio for the year 1852. There was assessed on
the tax list of that year, against the Bank of Cleveland, $10,580,
against the Merchants Bank of Cleveland, $7,965, on the Canal Bank
of Cleveland, $9,216, and on the Commercial Bank of Cleveland,
$11,981, making $38,981.
These respective amounts were distrained in bank notes from each
bank, and deposited by the tax collector with the Cleveland
Insurance Company to his credit. As the four banks whose property
was distrained were incapable of suing the tax collector, who was
citizen of Ohio, in the circuit court of the United States, they
joined in a written transfer of the bank notes to John G. Deshler,
the plaintiff, a citizen of New York, and he obtained a writ of
replevin, and process founded on it, out of the circuit court of
the United States, and declared as a citizen of New York. The
defendant Dodge pleaded in abatement, alleging that the causes of
action are not within the jurisdiction of the court, to which plea
there was a demurrer.
The first question is whether this plea in abatement is the
proper defense, or should the plea have been in bar.
The plea sets forth the distress for taxes due and unpaid from
the banks to the state; that the defendant Dodge was the tax
collector, and had the proper authority to make the distress, and
did distrain, by virtue of his authority. By the laws of England,
replevin does not lie for goods taken in execution, nor in
Page 57 U. S. 633
cases where goods are taken by distress according to an act of
Parliament, this being in the nature of an execution. 7 Bac.Ab.
Replevin and Avowry, C. 71; 6 Comyns' Digest Replevin, D. 218;
Ilsley v. Stubbs, 5 Mass. 282, per Parsons, Ch.J.
So the statute of Ohio under which the proceeding in this case
was had gives the writ of replevin, and prescribes the mode of
proceeding, requiring an affidavit from the owner or his agent that
the goods were his that they are wrongfully detained by the
defendants,
"and that said goods and chattels were not taken in the
execution, on any judgment against said plaintiff, nor for the
payment of any tax, fine, or amercement assessed against the
plaintiff,"
and it is further provided that any writ of replevin issued
without such affidavit shall be quashed at the costs of the clerk
issuing it, and that he and the plaintiff shall be liable in
damages to the party injured. This affidavit, Deshler made, and got
the property into his possession on giving bond as the law
requires.
The plea distinctly shows that the property was in a condition
not to be taken by the writ of replevin, and that the circuit court
had no jurisdiction to issue the writ, or in anywise interfere with
the property by that suit in replevin, and there being no
jurisdiction to try title or proceed further, the plea in abatement
was the proper one. And so are the American decisions.
Shaw v.
Levy, 17 Serg. & Rawle 99.
The next question is whether these corporations could lawfully
assign to a third person their rights of action to property out of
their possession and held adversely? On common law principles, such
an assignment is champerty. Blackstone says, vol. 4 135,
champart, in French law, signified a similar division of
profits:
"In our sense of the word, it signifies the purchasing of a
suit, or right of suing, a practice so much abhorred by our law
that it is one main reason why a chose in action, or thing of which
one hath the right, but not the possession, is not assignable at
common law, because no man should purchase any pretense to sue in
another's right."
I am not aware that this, as a general rule, has been disputed.
It therefore follows, as I think, that the assignment was void and
that the causes of action belonged to the four banks as if it had
never been made, and they alone having the right to sue in any form
and being citizens of Ohio, no power to interfere with the tax
collector, Dodge, or the property distrained, existed in the United
States court.
A principal objection that I have heard urged is that as the
plea sets forth matter in bar, and commences and concludes in
abatement, it is bad for this reason: if we were allowed to rely on
such a barren technicality, the assumption is not well
Page 57 U. S. 634
founded. In a replevin for goods, the defendant may plead
property in another or that the goods were taken in execution
either in abatement or bar. 1 Chit.Pl. 446;
Ilsley v.
Stubbs, 5 Mass. 284-285; 1 Johns. 380; 1 Salk. 5.
As the plaintiff had no title that he could assert, it is of no
consequence to him who has, say some of the authorities, but if
this second ground was doubtful, it is cured by the act of
jeofails.
The thirty-second section of the Judiciary Act declares that no
proceeding in civil causes shall be quashed or reversed for any
defect of want of form, but that the courts shall proceed and give
judgment according to the right of the cause without regarding such
defects or want of form in any pleading, except in cases of
demurrer, where the party demurring shall have specially set down
and expressed in his demurrer the causes thereof. The demurrer here
is general, and no mere technicality was allowable.
"The right of the matter in law" in this case involves a very
grave consideration, such as would in all probability deeply
disturb the harmony of the Union if taxpayers in larger classes
could combine together, let their property be distrained, and then
assign it to a third person, a citizen of another state, and on the
same day, as in this case, take it from the state authority by a
federal court writ and let it be taken beyond the state's
jurisdiction.
It was said by the Supreme Court of Pennsylvania, in a case
where property had been seized for taxes due and taken from the
officer's possession by a writ of replevin,
"that the court will not support this form of action in such a
case, nor suffer such an abuse of their process. If one man may
bring replevin where his goods have been taken for taxes, so may
every other person, and thus the collection of all taxes might be
evaded. Independently of the act of assembly, we are bound to quash
this writ."
3 Yeates 82.
I deem the case before us to have been a very disreputable
proceeding. The officers of these banks could not make the
necessary oath required to obtain a writ of replevin, and to evade
the laws of Ohio, the device of an assignment of their separate
causes of action to a nonresident was resorted to, who could swear
that this property was not distrained for his taxes, and thus
apparently comply with the law so far as an oath was required
whereas he violated its spirit, to bring into a tribunal of the
Union a controversy that a state court would not sanction by
practicing a fraud on the laws of Ohio and a fraud on the
Constitution of the United States. And what adds to the grossness
of this transaction is the attempt to assign and vest in this
plaintiff divers causes of action by separate assignors, thus
Page 57 U. S. 635
seeking to practice champerty in a form and to an extent not
heretofore devised. If four could assign, and their claims be
combined in one suit by the assignee, so could as many hundreds. To
sanction the validity of an assignment to a nonresident of property
adversely held and let him sustain a suit for it would throw open
the United States courts to every matter of litigation where
property was in dispute exceeding the value of five hundred
dollars.
I feel quite confident that the Constitution did not contemplate
this mode of acquiring jurisdiction to the courts of the Union, and
am of opinion, that the judgment of the circuit court sustaining
the plea ought to be affirmed.
MR. JUSTICE DANIEL.
I also dissent from the opinion of the Court in this case, and
concur in the views so conclusively taken of it by my brother
Catron.
Order
This cause came on to be heard on the transcript of the record
from the Circuit Court of the United States for the District of
Ohio, and was argued by counsel. On consideration whereof, it is
now here ordered and adjudged by this Court that the judgment of
the said circuit court in this cause be, and the same is hereby,
reversed with costs, and that this cause be and the same is hereby
remanded to the said circuit court for further proceedings to be
had therein in conformity to the opinion of this Court.
