Courts created by statute can have no jurisdiction but such as
the statute confers.
Therefore, where the Third Article of the Constitution of the
United States says that the judicial power shall have cognizance
over controversies between citizens of different states, but the
act of Congress restrains the circuit courts from taking cognizance
of any suit to recover the contents of a chose in action brought by
an assignee when the original holder could not have maintained the
suit, this act of Congress is not inconsistent with the
Constitution.
A debt secured by bond and mortgage is a chose in action.
Therefore, where the mortgagor and mortgagee resided in the same
state, and the mortgagee assigned the mortgage to the citizen of
another state, this assignee could not file his bill for
foreclosure in the circuit court of the United States.
The appellee was the complainant in the court below. The bill
was filed to procure satisfaction of a bond, executed by the
appellant, Thomas C. Sheldon, and secured by a mortgage on lands in
Michigan executed by him and Eleanor his wife, the other appellant.
The bond and mortgage were dated on 1 November, 1838, and were
given by the appellants, then and ever since citizens of the State
of Michigan, to Eurotas P. Hastings, President of the Bank of
Michigan, in trust for the President, Directors, and Company of the
Bank of Michigan.
The said Hastings was then and ever since has been a citizen of
the State of Michigan, and the Bank of Michigan was a body
corporate in the same state.
On 3 January, A.D. 1839, Hastings, President of said bank, under
the authority and direction of the Board of Directors,
"sold, assigned, and transferred, by deed duly executed under
the seal of the bank, and under his own seal, the said bond and
mortgage, and the moneys secured thereby, and the estate thereby
created"
to said Sill, the complainant below, who was then and still is a
citizen of New York.
These are all the facts which it is necessary to state, for the
purpose of raising the question of jurisdiction.
The circuit court decided in favor of the complainant below, and
decreed a sale of the mortgaged premises &c.
From this decree the defendants appealed to this Court.
Page 49 U. S. 448
MR. JUSTICE GRIER delivered the opinion of the Court.
The only question which it will be necessary to notice in this
case is whether the circuit court had jurisdiction.
Sill, the complainant below, a citizen of New York, filed his
bill in the Circuit Court of the United States for Michigan,
against Sheldon, claiming to recover the amount of a bond and
mortgage, which had been assigned to him by Hastings, the President
of the Bank of Michigan.
Sheldon, in his answer, among other things, pleaded that
"the bond and mortgage in controversy, having been originally
given by a citizen of Michigan to another citizen of the same
state, and the complainant being assignee of them, the circuit
court had no jurisdiction."
The eleventh section of the Judiciary Act, which defines the
jurisdiction of the circuit courts, restrains them from taking
"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 contents if no assignment had been made, except in cases of
foreign bills of exchange."
The Third Article of the Constitution declares that
"The judicial power of the United States shall be vested in one
Supreme Court and such inferior courts as the Congress may, from
time to time, ordain and establish."
The second section of the same article enumerates the cases and
controversies of which the judicial power shall have cognizance,
and, among others, it specifies "controversies between citizens of
different states."
It has been alleged that this restriction of the Judiciary Act,
with regard to assignees of choses in action, is in conflict with
this provision of the Constitution and therefore void.
It must be admitted that if the Constitution had ordained and
established the inferior courts and distributed to them their
respective powers, they could not be restricted or divested by
Congress. But as it has made no such distribution, one of two
consequences must result -- either that each inferior court created
by Congress must exercise all the judicial powers not given to the
Supreme Court or that Congress, having the power to establish the
courts, must define their respective jurisdictions.
Page 49 U. S. 449
The first of these inferences has never been asserted, and could
not be defended with any show of reason, and if not, the latter
would seem to follow as a necessary consequence. And it would seem
to follow also that, having a right to prescribe, Congress may
withhold from any court of its creation jurisdiction of any of the
enumerated controversies. Courts created by statute can have no
jurisdiction but such as the statute confers. No one of them can
assert a just claim to jurisdiction exclusively conferred on
another or withheld from all.
The Constitution has defined the limits of the judicial power of
the United States, but has not prescribed how much of it shall be
exercised by the circuit court; consequently the statute which does
prescribe the limits of their jurisdiction cannot be in conflict
with the Constitution unless it confers powers not enumerated
therein.
Such has been the doctrine held by this Court since its first
establishment. To enumerate all the cases in which it has been
either directly advanced or tacitly assumed would be tedious and
unnecessary.
In the case of
Turner v. Bank of North
America, 4 Dall. 10, it was contended, as in this
case, that as it was a controversy between citizens of different
states, the Constitution gave the plaintiff a right to sue in the
circuit court notwithstanding he was an assignee within the
restriction of the eleventh section of the Judiciary Act. But the
Court said
"The political truth is that the disposal of the judicial power
(except in a few specified instances) belongs to Congress, and
Congress is not bound to enlarge the jurisdiction of the federal
courts to every subject in every form which the Constitution might
warrant."
This decision was made in 1799; since that time, the same
doctrine has been frequently asserted by this Court, as may be seen
in
McIntire v.
Wood, 7 Cranch 506;
Kendall v. United
States, 12 Pet. 616;
Cary
v. Curtis, 3 How. 245.
The only remaining inquiry is whether the complainant in this
case is the assignee of a "chose in action" within the meaning of
the statute. The term "chose in action" is one of comprehensive
import. It includes the infinite variety of contracts, covenants,
and promises which confer on one party a right to recover a
personal chattel or a sum of money from another by action.
It is true a deed or title for land does not come within this
description. And it is true also that a mortgagee may avail himself
of his legal title to recover in ejectment in a court of law. Yet
even there, he is considered as having but a chattel
Page 49 U. S. 450
interest, while the mortgagor is treated as the true owner. The
land will descend to the heir of the mortgagor. His widow will be
entitled to dower. But on the death of the mortgagee, the debt
secured by the mortgage will be assets in the hands of his
executor, and although the technical legal estate may descend to
his heir, it can be used only for the purpose of obtaining
satisfaction of the debt. The heir will be but a trustee for the
executor.
In equity, the debt or bond is treated as the principal, and the
mortgage as the incident. It passes by the assignment or transfer
of the bond, and is discharged by its payment. It is in fact but a
special security or lien on the property mortgaged. The remedy
obtained on it in a court of equity is not the recovery of land,
but the satisfaction of the debt. It is the pursuit by action of
one debt on two instruments or securities -- the one general, the
other special. The decree is that the mortgaged premises be sold to
pay the debt, and if insufficient for that purpose, that the
complainant have further remedy by execution for the balance.
The complainant in this case is the purchaser and assignee of a
sum of money, a debt, a chose in action -- not of a tract of land.
He seeks to recover by this action a debt assigned to him. He is
therefore the "assignee of a chose in action" within the letter and
spirit of the act of Congress under consideration, and cannot
support this action in the circuit court of the United States where
his assignor could not.
The judgment of the circuit court must therefore be
Reversed for want of jurisdiction.
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
Michigan and was argued by counsel. On consideration whereof it is
now here ordered and decreed by this Court that this cause be and
the same is hereby reversed for the want of jurisdiction in that
court, and that this cause be and the same is hereby remanded to
the said circuit court with directions to dismiss the bill of
complaint for the want of jurisdiction.
