1. A judgment of a state court denying the validity of a title
claimed under an execution sale based upon a federal court
judgment, because of supposed irregularities in the marshal's
attempted exercise of his authority to sell, the authority itself
not having been drawn in question, is reviewable by certiorari and
not by writ of error, under Jud.Code § 237, as amended. P.
257 U. S.
15.
2. The application of state laws to a marshal's sale of property
under a common law execution issued on praecipe from a federal
court,
Page 257 U. S. 11
is governed by the conformity provisions of Rev.Stats. §§ 914,
916. P.
257 U. S.
18.
3. The provisions of the Act of March 3, 1893, c. 225, 27 Stat.
751, relative to the place of sale apply only to judicial sales
made under order or decree and requiring confirmation by the court
for their validity. P.
257 U. S.
18.
4. An assignment of error
held sufficient to submit to
the court below the question whether a marshal's sale was valid
under Rev.Stats. § 916. P.
257 U. S. 19.
5. Under Rev.Stats. § 916, giving to the party who has recovered
judgment in a federal court
"similar remedies . . . by execution . . . as are now provided
in like causes by the laws of the state in which such court is
held, or by any such laws hereafter enacted which may be adopted by
general rules of any such circuit or district court,"
the state law applicable is that which was in force when the act
of which § 916 was a part was originally enacted,
viz.,
June 1, 1872, in the absence of general rules adopting later state
law. P.
257 U. S.
19.
6. Under § 849 of the Mississippi Code of 1871, which, prior to
amendment by § 3467 of the Code of 1892, provided that shares or
interests in any corporation, as well as banknotes or evidences of
debt circulating as money, might be taken and sold under an
execution in the same manner as goods and chattels, or applied to
the payment of the execution, and required the custodian of the
corporate books to give the levying officer a certificate of the
number of shares or amount of interest held by the defendant in the
company, and declared that the purchaser of such shares or interest
at the execution sale should become the owner thereof in the same
manner as if such shares or interest had been regularly assigned to
him by the defendant, a certificate of shares issued to a judgment
debtor and found in the custody of his agent or trustee was a
proper subject of levy and sale. P.
257 U. S.
20.
7. Under the laws of Mississippi, a
venditioni exponas
is not necessary to enable the officer to proceed with the sale of
property taken under a
fieri facias of which the return
day has not gone by, and, where the return on the latter writ shows
due levy and sale, references therein to a
venditioni
exponas may be treated as surplusage. P.
257 U. S.
22.
8. Under Rev.Stats. § 914, which requires that proceedings in
common law cases in the federal courts shall conform to those of
state courts "as near as may be," and § 916, which gives the
judgment
Page 257 U. S. 12
creditor remedies on common law executions "similar" to those of
the state court, an execution sale of personal property which,
under the state law (Miss.Code, 1871), must be made at the
courthouse of the county may be made at the courthouse of the
United States where the judgment was entered and execution issued.
P.
257 U. S. 22.
Smith v.
Cockrill, 6 Wall. 756, and
Amy v.
Watertown, 130 U. S. 301,
distinguished.
81 So. 178 reversed.
Certiorari to review a judgment of the Supreme Court of
Mississippi rendered in favor of the City of Clarksdale in a suit
brought by the city to assert its ownership in shares of stock in a
railway company. The facts are stated in the opinion.
Page 257 U. S. 14
MR. CHIEF JUSTICE TAFT delivered the opinion of the Court.
This is a controversy over the ownership of 250 shares of the
stock of the Louisville, New Orleans & Texas Railway Company, a
corporation of Mississippi. The City of Clarksdale acquired the
stock in 1891 in consideration of $25,000 of bonds issued by it to
aid in the construction of a new branch of the Railway Company in
which it was interested. The certificate for the stock the city
left in the custody of a Clarksdale bank. The Louisville, New
Orleans & Texas Railway Company, in 1892, was merged by
consolidation in the Yazoo & Mississippi Valley Railroad
Company. In 1897, the Pacific Improvement Company, a bondholder,
recovered against the city in the United States Circuit Court for
the Northern District of Mississippi a judgment for unpaid interest
on the bonds amounting to $3,058.13. Execution issued to the
marshal, who levied on and took possession of the stock certificate
in the Clarksdale bank and at public sale sold the certificate and
shares to the judgment creditor for $100, which was credited on the
judgment. In 1898, the city made a compromise with the bondholders
by which, for payment of the principal of the bonds in cash, the
bondholders released all claim of interest and transferred the
unsatisfied judgment. No mention was made of the
Page 257 U. S. 15
stock in this settlement. In 1904, the Pacific Improvement
Company, for $2,770, sold the stock to the Mississippi Valley
Company, an investment company, and transferred the certificate to
that company. The value of the stock, which was little or nothing
at the time of the judgment and the compromise, has greatly
enhanced, and is averred to be $75,000.
By its bill in equity in the state chancery court, the city
sought to compel the Yazoo & Mississippi Valley Railroad
Company to recognize the city's ownership of this stock and to
issue to it stock of the consolidated company in lieu thereof, in
accordance with the terms of the merger. The Mississippi Valley
Company, after the answer to the bill revealed its ownership of the
stock, was made a defendant, and the real contest became one
between the city and that company.
In the pleadings and at the hearing, the city attacked the
marshal's sale as void under the statutes of Mississippi, and
relied on the duty of the United States courts under federal
statutes to conform their executions and sales to the laws of the
state in which they are held. The state chancery court declared the
sale void, and granted the relief asked by the city. The state
supreme court affirmed the decree. No opinion was filed in either
court.
We are met by a preliminary question of jurisdiction. The case
was first brought here by writ of error to the state supreme court.
Then, within due time, a petition for a certiorari was also
presented, and consideration of the latter was postponed until the
hearing on the writ of error. Under which writ can the case be
reviewed here? The Mississippi Valley Company relied below, and
here insists, on a title acquired under an execution sale of a
United States marshal. This is a title claimed under an authority
of the United States. Under § 237 of the
Page 257 U. S. 16
Judicial Code as amended by Act of September 6, 1916, c. 448, 39
Stat. 26, if the validity of an authority exercised under the
United States is drawn in question and the decision is against its
validity, review is by writ of error. If only a title claimed under
an exercise of such an authority is in dispute, then certiorari is
the proper writ. The authority of the United States marshal to make
sales upon judgments in the United States courts and to give title
thereby is not drawn in question in this case. What is denied here
is the regularity of the marshal's attempted exercise of his
conceded authority and the validity of the resulting title. Hence,
the only way of reviewing this cause is by certiorari.
Dana v.
Dana, 250 U. S. 220;
Philadelphia & Reading Coal & Iron Co. v. Gilbert,
245 U. S. 162;
Avery v. Popper, 179 U. S. 305,
179 U. S. 314.
The writ of error is dismissed, the petition for certiorari is
granted, and we now proceed to dispose of the case on the latter
writ.
The validity of the judgment upon which the execution issued is
conceded. The questions to be decided arise on the levy and sale.
On the 1st day of June, 1897, a
fieri facias issued. This
writ the marshal executed and made the following return on it:
"Executed the within writ this the 13th day of Aug. 1897 by
levying on and taking into my possession one certificate of stock,
the property of said defendant, in the Louisville, New Orleans
& Texas R. Co., No. 147, for 250 shares, issued to the town or
city of Clarksdale, Miss. Further executed on this the 6th day of
Dec., 1897 at 12 o'clock meridian by selling said certificate of
stock No. 147 after due advertisement by posting notices in three
public places for the period of 10 days as provided by law, to the
highest and best bidder for cash, before the western door of the
United States courthouse and post office building in the town of
Oxford, Miss.. at which sale the Pacific Improvement Company
Page 257 U. S. 17
became the highest and best bidder at and for the price of $100,
and at the same time and place I executed the writ of
vendi
exponas issued to me in this cause and offered for sale all
the interest which the city or town of Clarksdale had in the
capital stock of the Louisville, New Orleans & Texas Railway
Co. or in the Yazoo & Mississippi Valley Railroad Company,
offering said interest at the same time with said certificate of
stock to the said Pacific Improvement, for the said sum of $100,
that being the highest and best bid offered for same."
"Dec. 6th, 1897."
"[Signed] A. J. Cooke"
"
U.S. Marshal"
On the back of the certificate, the marshal inscribed the
following:
"Pacific Improvement Co. v. City or Town of Clarksdale,
Mississippi. No. 3900 Law. In the Circuit Court of the United
States for the Western District of the Northern District of
Mississippi. By virtue of a writ of
fieri facias issued in
said cause, I levied upon certificate of stock on August 3, 1897,
and thereon December 6, 1897, pursuant to said execution and to a
certain writ of
venditioni exponas, I in the manner
provided by law sold this certificate of stock, all the interest of
the city or town of Clarksdale in the stock of the Louisville, New
Orleans & Texas Railway Company, to the Pacific Improvement
Company. Witness my signature this the 6th day of December, 1897.
A. J. Cooke, United States Marshal."
Counsel for the city attack the sale chiefly on two grounds:
first, that the levy was void because made on a mere muniment or
indicium of title to the stock, the certificate, and not on the
stock itself, and, second, that the sale was void because not made
at the county courthouse, as required by the laws of
Mississippi.
Page 257 U. S. 18
In applying the laws of Mississippi to the validity of this
sale, we are governed by §§ 914 and 916 of the Revised Statutes of
the United States, as follows:
"Sec. 914. The practice, pleadings, and forms and modes of
proceedings in civil causes, other than equity and admiralty
causes, in the Circuit and district courts shall conform, as near
as may be to the practice, pleadings, and forms and modes of
proceeding existing at the time in like causes in the courts of
record of the state within which such circuit or district courts
are held, any rule of court to the contrary notwithstanding."
"Sec. 916. The party recovering a judgment in any common law
cause in any circuit or district court shall be entitled to similar
remedies upon the same, by execution or otherwise, to reach the
property of the judgment debtor, as are now provided in like causes
by the laws of the state in which such court is held, or by any
such laws hereafter enacted which may be adopted by general rules
of such circuit or district courts, and such courts may, from time
to time, by general rules, adopt such state laws as may hereafter
be in force in such state in relation to remedies upon judgments,
as aforesaid, by execution or otherwise."
Counsel for the petitioner also relies on the Act of March 3,
1893, chapter 225, 27 Stat. 751, which provides in its first
section
"that all real estate or any interest in land sold under any
order or decree of any United States court shall be sold at public
sale at the courthouse of the county, parish, or city in which the
property, or the greater part thereof, is located, or upon the
premises, as the court rendering such order or decree of sale may
direct,"
and, in its second section,
"that all personal property sold under any order or decree of
any court of the United States shall be sold as provided in the
first section of this act, unless, in the opinion of the court
rendering
Page 257 U. S. 19
such order or decree, it would be best to sell it in some other
manner."
We think that the language of this act limits its application to
judicial sales made under order or decree of the court and
requiring confirmation by the court for their validity, and that it
does not extend to sales under common law executions which issue by
mere praecipe of the judgment creditor on the judgment without
order of the court, and in which the levy and sale of the marshal
are ministerial, do not need confirmation to give them effect, and
only come under judicial supervision on complaint of either party.
The sale in such a case depends for its validity on the marshal's
compliance with the requirements of law. While the Act of 1893 is
not limited to equity and admiralty cases, its passage was
doubtless chiefly prompted by the fact that they were excepted from
the conformity sections.
It is objected that petitioners cannot now rely on § 916 because
they did not rely on it in the courts below. Their seventh
assignment of error on appeal to the state supreme court complained
of the refusal of the chancery court
"to hold and adjudge that whether the said act of Congress
[
i.e., the Act of 1893] or laws of Mississippi governed
the sale under said execution the validity
vel non of said
execution was a federal question, for even if the statutes of the
state were applicable, the same became federal statutes by adoption
under Act of Congress of June 1, 1872, U.S. Revised Statutes, §
916."
It seems to us that this submitted in the alternative with
sufficient specification to the state supreme court the question
whether § 916 of the Revised Statutes conferred validity on the
marshal's sale.
Section 916 gives to the judgment creditor
"similar remedies . . . by execution . . . as are now provided
in like causes by the laws of the state in which
Page 257 U. S. 20
such court is held, or by any such laws hereafter enacted which
may be adopted by general rules of such Circuit or district
court."
This section was part of an act "to further the administration
of justice," enacted by Congress June 1, 1872. The law of
Mississippi applicable to this subject matter therefore is the law
which was in force at that date, unless the United States Court for
the Northern District of Mississippi has since adopted by general
rules later state law. We are not advised that it has done so.
In 1872, the law of Mississippi as to levies on stock of a
corporation was § 849 of the Code of 1871, as follows:
"Bank notes, bills, or evidences of debt, circulating as money,
or any share or interest in any incorporated company, belonging to
the defendant in execution, may be taken and sold, by virtue of an
execution, in the same manner as goods and chattels, or applied to
the payment of the execution, and the clerk, cashier, or other
officer having the custody of the books of the company, shall, upon
exhibiting to him the writ of execution, be bound to give to the
officer having such writ, a certificate of the number of shares or
amount of the interest held by the defendant in such company, and
if he shall neglect or refuse to do so, or if he shall willfully
give a false certificate thereof, he shall be liable to the
plaintiff for double the amount of all damages occasioned by such
neglect or false certificate, to be recovered in an action of the
case against him. The purchaser of such share or interest at such
sale shall become the owner thereof in the same manner as if such
share or interest had been regularly assigned to him by the
defendant."
We are not advised of any construction of this section by the
Supreme Court of Mississippi, and we must therefore treat it as a
case of first impression in determining the proper mode of levying
upon shares of corporate stock under its terms.
Page 257 U. S. 21
Taking the section as a whole, it classes bank notes, bills, or
evidences of indebtedness circulating as money, and shares in an
incorporated company together, and makes them subject to be "taken
and sold as goods and chattels," or to be "applied to the payment
of the execution." At common law, choses in action were not subject
to levy as personal property. Here, the legislative purpose appears
to be to treat the written evidences of the choses in action
circulating as money as in themselves capable of manual seizure by
the execution officer, and, in appropriate cases, of actual
application as money on the execution debt. The joining of shares
of stock in this section with such choses in action indicates that
the shares are to be regarded as
in pari materia, and to
be dealt with, as nearly as may be, in like manner.
The elaborate and specific provision for a levy upon corporate
stock of § 3467 of the Mississippi Code of 1892, which succeeded
the Code of 1871, was, and was evidently intended to be, a
departure from, and a substantial amendment of, § 849 in this
respect. Under the later Code, provision for levy on bank notes,
bills, and other evidences of indebtedness is separated from that
prescribing the levy on shares of stock. Shares of stock are no
longer dealt with expressly as "goods and chattels." The officers
of the corporation are no longer required to give a "certificate"
of the number of shares held by the judgment debtor to the levying
officer, but are to make a statement in writing.
The procedure provided in § 849, in our view, was intended to
furnish to the levying officer a certificate of the shares of the
defendant which the officer could manually take and offer for sale
as the shares, and which, when indorsed by the officer with a
record of his proceedings and sale, would work an assignment of the
shares to the purchaser "as if regularly assigned to him by
defendant" --
i.e., by the usual transfer of a
certificate. If we are right
Page 257 U. S. 22
in this view, and the absence of any specific form for a levy in
the section confirms us in it, then, of course, a certificate of
shares issued to the debtor and found in the custody of his agent
or trustee is the proper subject of levy and sale under the
section. This statutory method of treating shares of stock and
certificates for them as the same for purposes of levy and "as
goods and chattels" is not without parallel.
People v.
Grifenhagen, 152 N.Y.S. 679;
Mitchell v. Leland, 246
F. 102;
Beal v. Carpenter, 235 F. 273;
Puget Sound
National Bank v. Mather, 60 Minn. 362.
We think the levy was valid.
Counsel for respondent criticize the recitals of the return as
to a
venditioni exponas and urge that neither ground nor
time enough was shown for the issue and return of such a writ.
Under the Code of Mississippi, as elsewhere, this is a writ used to
compel an officer to proceed to a sale under a
fieri
facias, if any of the property taken remains in the hands of
the officer unsold. The writ is not necessary to enable the officer
to proceed with the sale unless the return day of the writ has gone
by. With this exception, it gives him no authority not previously
possessed. Reference to it in the return may well be treated as
surplusage, not affecting the validity of the proceedings if in
other respects they are regular.
The chief objection of respondent is to the place of sale, which
was at the western door of the United States courthouse for the
Western district of Mississippi in the Town of Oxford. Counsel for
respondent contend that, under the Mississippi statute, the place
of the sale should have been at the courthouse of Coahoma County at
Clarksdale, the county of the judgment debtor, and where the
certificate of stock was levied on, and that the sale at the
courthouse of the United States where the judgment was entered and
execution issued was void.
Page 257 U. S. 23
The provision in the Mississippi Code of 1871 as to the place of
sales on execution was as follows:
"846. All sales by any sheriff or other officer, by virtue of
any execution or other process, shall be made at the courthouse of
the county, except when personal property, too cumbersome to be
removed, shall be levied on, which may be sold at the place where
the same may be found, or at any other convenient place, and also,
except where cattle, hogs, sheep, or stock, other than horses and
mules, are levied on, the sale of which may be made within the
usual hours, on ten days' notice at the most public place in the
neighborhood of the defendant."
The Supreme Court of Mississippi has decided in
Koch v.
Bridges, 45 Miss. 247, and
Jones v. Rodgers, 85 Miss.
802, that, where land is not sold at the proper county courthouse,
the sale is void. In
Jones v. Rodgers, the sale was by a
United States marshal. It was made at the statehouse in Jackson. A
special Act of Congress of February 16, 1839, 5 Stat. 317, § 1,
provided that the United States Marshal for the District of
Mississippi should be authorized to sell property at the courthouse
in each county, but that he might, at the written request of the
defendant, change the sale to the place where the United States
court for the district was held. The court, in the absence of any
request of the defendant, held the sale void, saying:
"Statutes fixing the place of sale of lands under executions are
mandatory, and not merely directory, and it is the imperative duty
of officers to make such sales at the very place designated, and a
sale made at any other place is not voidable merely, but absolutely
null and void. The place of sale is the very essence of the sale,
and strict compliance with the statute is absolutely essential in
order to transfer a good title to realty. "
Page 257 U. S. 24
The court cites other cases of land sales by United States
marshals in support of this.
Moody's Heirs v. Moeller, 72
Tex. 635, in which the sale was at the United States courthouse
just across the street from the county courthouse.
Sinclair v.
Stanley, 64 Tex. 72;
Casseday v. Morris, 49 Tex. 613;
Jenners v. Doe, 9 Ind. 461. Mr. Freeman, in his work on
Executions, § 289, vol. 2, says of these cases that, although a
view that such sales were voidable only would be reasonable, the
weight of authority sustains them.
With respect to goods and chattels, however, the sale at the
place fixed by statute has not been regarded as so essential as
compliance with the requirement that the officer selling them shall
have the goods in view of the buyers, Freeman on Execution, par.
290, vol. 2, and yet the authorities are divided on the question
whether a departure from this requirement renders the sale of
personalty void. We do not feel called upon, however, to inquire
and decide which is the better view, because we think that, under §
916, in respect to sales of personalty, the federal courthouse was
a proper place for holding the sale.
Section 914 requires that the proceedings in common law cases in
the federal court shall conform to those of state courts "as near
as may be." Section 916 gives the judgment creditor remedies on
common law executions "similar" to those of the state court. These
qualifying words recognize the necessity for some play in adapting
the state procedure to the practice of the federal courts. Certain
things must be changed. The officer issuing the writ of execution
must be the United States clerk, the officer executing it must be
the marshal, and not the sheriff, the name of the court must be
different, and it is but a reasonable and obvious consequence that
the place of the proceedings generally shall be at the federal
Page 257 U. S. 25
courthouse,of at the state courthouse. The inconvenience and
danger of injustice to the judgment debtor in having his land sold
at the federal courthouse, when it may lie at a great distance from
there in a remote county of the state, furnish strong reason why
federal and other courts should hold compliance with the injunction
of the state laws as to the place of sale of realty indispensable
to its validity. But, in case of goods and chattels which after
seizure and levy can be viewed by bidders as well at a federal
courthouse as at a state courthouse, there is little ground for
holding that such sales, like other proceedings under its
authority, may not be properly carried on at the place where the
court sits. The distinction between realty and goods and chattels
in this matter is recognized in the provisions already noticed, of
the act of Congress of 1893. The first section provides that the
real estate must be sold either at the county courthouse in the
county where the land is, or on the premises. No discretion is
given the court to change the sale to any other place. The second
section, however, while it directs that personalty shall be sold as
provided in the realty section, vests full discretion in the court
to sell it elsewhere.
The case of
Smith v.
Cockrill, 6 Wall. 756, is relied on by counsel for
respondent. That was a sale of real estate. The state law required
appraisal before sale and a sale at not less than two-thirds the
value thus fixed, both of which requirements were wholly
disregarded by the marshal. The federal statute applying was the
Act of Congress of 1828, 4 Stat. 281, § 3, which provided that the
forms of process, etc., should be the same as that used in the
state courts. The requirement for appraisal of real estate and its
sale at not less than two-thirds of the appraised value by a
ministerial officer is much more important in protecting the rights
of the judgment debtor
Page 257 U. S. 26
than the place in a sale of personalty. The case of
Bornemann v. Norris, 47 F. 438, was also a sale of real
estate, and, moreover, was a direct proceeding to quash.
Nor do we think that the quoted language of the Court, speaking
through Mr. Justice Bradley in
Amy v. Watertown,
130 U. S. 301, is
in conflict with our view of the effect of these conformity
sections. The question in that case was whether, when the state
statute provided that process could be served on a city only by
leaving the summons with the mayor, and there was no mayor, the
federal court could order service to be made on some one else. The
court held that, under § 914, the United States courts were limited
to the method of service prescribed by the state statute. In
adapting a state statute as a guide to the conduct of the business
of a United States court and its officers, service on a state
municipal corporation specified by a state statute is a very
different matter from the fixing of the place for performing the
functions of the United States court and its officers. The
corporation is completely the creature of a state, and it is
usually within the function of the creator to say how the creature
shall be brought before judicial tribunals. It was with reference
to such a matter, that Mr. Justice Bradley said that the statute of
1872 was peremptory, and federal courts must conform to the
practice of state courts.
For the reasons given, we hold that the sale of the 250 shares
of stock to the Pacific Improvement Company vested a good
title.
The decree of the Supreme Court is reversed, and the cause
remanded for further proceedings not inconsistent with this
opinion.
Reversed.