Some of the distinctions stated between bills of review, of
revivor, and supplemental and original bills in chancery.
This Court, as an appellate court, has the power to allow
amendments to be made to the record before it, although the general
practice has been to remand the case to the circuit court for that
purpose.
When a cause is brought before this Court on a division in
opinion by the judges of the circuit court, the points certified
only are before it. The cause should remain on the docket of the
circuit court, and at their discretion may be prosecuted.
If the jurisdiction of a circuit court be not shown in the
proceedings in the case, its judgment is erroneous, and liable to
be reversed; but it is not an absolute nullity.
But when an amendment to the record was made by consent of
counsel in this Court, which amendment set forth the jurisdiction,
a mandate containing that amendment ought to have prevented any
subsequent objection to the jurisdiction in the circuit court.
A decree for a sale, made with the approbation of counsel filed
in court, removes all preceding technical objections.
Where a party interested consented to the sale of property,
afterwards took the benefit of the insolvent law, and at a
subsequent period counsel representing him filed a consent decree
to complete the sale, the trustee having taken no steps for two
years to connect himself with the proceedings in court, and then
having suffered fifteen years more to elapse without moving in the
business, it is too late for such trustee to object to the consent
decree.
So, also, the holders of bridge bills, who had no specific lien
upon a bridge, must be considered to have lost their right to
impugn the sale as fraudulent after so long a lapse of time.
Page 49 U. S. 587
As the decision of the court turned upon some collateral points,
it is not necessary to state all the facts in the case, which were
extremely complicated. The Reporter therefore refers the reader to
the opinion of the court, which was delivered by MR. JUSTICE McLEAN
and which contains a recital of all the facts necessary to an
understanding of the points decided.
Page 49 U. S. 605
MR. JUSTICE McLEAN delivered the opinion of the Court.
Henry Shultz and Lewis Cooper, in the year 1813, obtained from
the State of South Carolina a charter for a bridge over the
Savannah River, opposite the Town of Augusta, in Georgia, for the
term of twenty-one years, and in 1814 the State of Georgia granted
to them a charter for the term of twenty years. In 1816, Henry
Shultz and John McKinne, being the joint owners of the bridge,
formed a partnership in the business of banking under the name of
the "Bridge Company of Augusta;" the bridge was valued at
seventy-five thousand dollars, and it, with other property named,
constituted the partnership stock. In 1818, Shultz sold and
transferred his interest in the partnership to Barna McKinne. The
consideration of this
Page 49 U. S. 606
purchase was the sum of sixty-three thousand dollars, which
Shultz owed to the firm and which was credited to him on their
books.
In a short time the firm became greatly embarrassed. Among other
debts, they owed to the Bank of the State of Georgia the sum of
forty thousand dollars, and they obtained from it a further loan of
fifty thousand dollars, with the view, as was stated, to relieve
the bridge company. To secure the payment of the sum of ninety
thousand dollars to the bank, the McKinnes mortgaged the bridge,
eighty negroes, and some real estate, 10 June, 1819. Previous to
this the "Bridge Bank" stopped payment. On being informed of this
fact, Shultz resumed his place in the firm by procuring a transfer
of Barna McKinne's interest. He advanced fifteen thousand dollars
of his own funds to pay deposits in the bank, and took other steps,
with his partner, to sustain the credit of the bridge bills in
circulation.
In 1821, a petition was filed by the Bank of Georgia in the
Superior Court for Richmond County, praying a foreclosure of the
above mortgage, and at the May term of that court a rule was
entered to foreclose the mortgage unless the principal and interest
due on it should be paid, and at May term, 1822, the rule was made
absolute. The sum of $69,493 was found to be due to the bank on the
mortgage, and the property was directed to be sold. The sale was
enjoined by Shultz, Christian Breithaupt, and others by filing a
bill against the bank in the Circuit Court of the United States for
the District of Georgia which, among other things, prayed that the
property might be sold and the proceeds applied to the payment of
the creditors of the bridge company, and particularly to those who
had obtained judgments. An order was made for the sale of the
bridge, and commissioners were appointed to make the sale. The sale
was made on 28 November, 1822, to the bank for the sum of seventy
thousand dollars. For this amount the bank issued scrip, which by
the order of the court was deposited with its clerk.
In the further progress of the suit, the judges of the circuit
court were opposed in opinion on the following points:
1. Whether the complainants were entitled to relief.
2. What relief should be decreed to them.
These points being certified to the supreme Court, at the
January term, 1828, the cause was dismissed for want of
jurisdiction. The record did not show that a part of the defendants
were citizens of the State of Georgia.
At the January term of the Supreme Court in 1830, Messrs.
Page 49 U. S. 607
Wilde and McDuffie, being counsel for the parties, agreed in
writing that the cause should be reinstated and that the pleading
should be amended by alleging "that the stockholders of the bank
were citizens of Georgia," and that the cause be argued. The Court
dismissed the case on the ground that the whole cause was
certified, and not questions arising in its progress. And the case
was remanded to the circuit court with "directions to proceed
according to law."
This mandate was received by the circuit court at their May
term, 1830, and the case was reinstated on the docket. And at the
same term
"The cause came on to be heard on the amended bill, answers,
exhibits, and evidence, and the court having considered the same,
it was ordered and decreed, that the sale of the Augusta bridge,
made by virtue of certain powers of attorney and the consent of the
parties, and held and conducted under the direction of
commissioners heretofore appointed under this Court, be, and the
same is hereby, ratified and confirmed, and the said Bank of the
State of Georgia vested with a full, absolute, and perfect title to
the said bridge and its appurtenances, under the said sale, freed,
acquitted, released, and discharged from all manner of liens,
claims, or encumbrances, at law or in equity, on the part of the
said Henry Shultz, John McKinne, Barna McKinne,"
&c.
"And it is further ordered and decreed by the Court, by and with
the consent of the parties, complainants and defendants, that the
scrip issued by the Bank of the State of Georgia for the sum of
seventy-one thousand six hundred and eighty-six dollars and
thirty-six cents . . . be cancelled and delivered up to the bank by
the clerk, . . . and that the bill of complaint as to the several
other matters therein contained, be dismissed, with costs."
Under which decree is the following agreement:
"We consent and agree that the foregoing decree be entered at
the next or any succeeding term of the said Supreme Court of the
United States, District of Georgia,"
signed "George McDuffie, Sol. for complainants, and R. H. Wilde,
Sol. for defendants." Dated Washington, 10 April, 1830. And the
Court said --
"The within decree having been drawn up, agreed to, and
subscribed by the solicitors on behalf of the parties complainants
and defendants on motion of Mr. Wilde, ordered that the same be
filed and entered as the decree of this Court,"
signed by both of the judges.
Fifteen years after the above decree was entered, the bill now
before us was filed by Yarborough, as trustee of Henry Shultz, an
insolvent debtor, and for the creditors of Henry Shultz, and Henry
Shultz in his own right, which they say is "in the nature
Page 49 U. S. 608
of a bill of revivor and supplement" against the Bank of the
State of Georgia, the City Council of Augusta, John McKinne, and
Gazaway B. Lamar. In this bill the proceedings in the original suit
are referred to, and many of them stated at length, and they are
made a part of the present procedure. And the complainants pray
that the said original bill, with all its amendments, the answers,
decrees, decretal orders, and evidence, may be reinstated and
revived for the causes set forth, to the extent of the several
interests of the parties to this bill.
By way of supplement, the complainant Shultz states that under
the Insolvent Debtors' Act of South Carolina, he executed an
assignment of all his estate in trust for his creditors,, to Thomas
Harrison, on 13 October, 1828. That his interest in the bridge was
transferred by this assignment. Afterwards, the complainant, John
W. Yarborough, was appointed trustee of Shultz for the benefit of
his creditors. That the bridge and its appurtenances having been
originally pledged, as co-partnership property, by John McKinne and
Shultz for the redemption of the bills issued by them, the lien,
never having been released, still remains. And if the mortgage
executed to the bank be valid, the bank and all claiming under it
occupy the ground of mortgagees in possession, and are bound to
account for the rents and profits of the bridge, the same never
having been sold under the foreclosure of the mortgage. That the
bridge and its income are first liable to the redemption of bridge
bills. After these are paid, one-half of the surplus in the hands
of the complainant, Yarborough, as trustee, to satisfy the
creditors of Shultz &c.
On 4 May, 1838, the bank conveyed its interest in the bridge to
G. B. Lamar, for the sum of seventy thousand dollars, by a
quitclaim deed. That Lamar purchased with a full knowledge of the
title, and held the same, receiving the profits, up to 21 January,
1840, when he conveyed his interest in the bridge to the City
Council of Augusta for the sum of one hundred thousand dollars.
That the city corporation had full knowledge of the claims on the
bridge. The Legislatures of Georgia and South Carolina extended
their charter of the bridge to the bank, on 23 December, 1840,
reserving all liens upon it. That Yarborough, as trustee, out of
the sale of the property of Shultz, paid bridge bills and judgments
on such bills to the amount of about seventy thousand dollars, and
that the unsatisfied creditors have the equity of now requiring a
like amount of the co-partnership property of the bridge company to
be applied in payment of their individual claims. And in addition
to the above payment, Shultz avers that he has paid
Page 49 U. S. 609
out of his private means, for the redemption of bridge bills, a
sum of about one hundred and fifty-three thousand two hundred and
ninety-six dollars. That the total amount paid by him out of his
private funds on account of bridge bills was four hundred thousand
eight hundred and twenty-six dollars, which he insists in equity he
is entitled to receive next after the redemption of the outstanding
bridge bills. There is outstanding in bridge bills about the sum of
ninety-two thousand dollars.
And the complainants allege that the decree, as entered on the
original bill, is void as to all the parties except as regards the
claim of Breithaupt, as the solicitor for the complainants in said
bill did not represent the creditors of Shultz, and that no act of
the solicitor could impair their rights. That all the right of
Shultz passed out of him by virtue of his assignment for the
benefit of his creditors. That the decree was a fraud upon them.
That the sale of the bridge by the commissioners was void, as John
McKinne, an equal partner of Shultz, never assented to it. That the
Bank of Georgia, and all those who have held and are now holding
under it, are in equity bound to account. But if the sale of the
bridge shall be held valid, the complainants allege that the bank
is bound to account for the amount of the purchase money and
interest, and for the net sum of tolls received. And the
complainants pray that the original bill, with all the proceedings
thereon, may be revived, and stand as before the decree was entered
in 1830; that the said decree may be opened, reviewed, and
reversed, that the mortgage to the bank may be declared null and
void, and that the sale may be set aside &c.
The defendants demurred to the bill on the ground
"that the complainants have not, by their bill, made such a case
as entitles them in a court of equity to any discovery from the
defendants respectively, or any or either of them, or any relief
against them or either of them, as to the matters contained in the
bill,"
&c. And afterwards John McKinne filed his answer, admitting
the general allegations in the bill.
This bill has been considered by some of the defendants' counsel
as a bill of review. But it has neither the form nor the substance
of such a bill. Since the ordinances of Lord Bacon, a bill of
review can only be brought for "error in law appearing in the body
of the decree or record," without further examination of matters of
fact, or for some new matter of fact discovered, which was not
known and could not possibly have been used at the time of the
decree. But if this were a bill of review, it would be barred by
the analogy it bears to a writ of error, which must be prosecuted
within five years from
Page 49 U. S. 610
the rendition of the judgment.
Whiting
v. Bank of the United States, 13 Pet. 15.
Nor is this properly denominated a bill of revivor. When, in the
progress of a suit in equity, the proceedings are suspended from
the want of proper parties, it is necessary to file a bill of
revivor. A supplemental bill is filed on leave, and for matter
happening after the filing of the bill, and is designed to supply
some defect in the structure of the original bill. But this does
not appear to be strictly of that character. The complainants
denominate it a bill "in the nature of a bill of revivor and
supplement." It must be treated as an original bill, having for its
objects the prayers specifically set forth.
The proceedings on the original bill, under which the property
now claimed was sold, are not before this Court in their appellate
character. We cannot correct the errors which may have intervened
in that procedure, nor set it aside by a reversal of the decree.
That case is collateral to the issue now before us.
The complainants insist that the proceedings in the original
suit, embracing the interlocutory decree under which the property
was sold and the consent decree of 6 May, 1830, were void for want
of jurisdiction in the circuit court. It is not necessary now to
inquire whether the circuit court had power to enjoin proceedings
under the judgment in the state court. The injunction was issued at
the instance of Shultz and for his benefit, and no question of
jurisdiction was raised. But as there was no allegation in the
original bill of citizenship of the stockholders of the Bank of
Georgia, it is supposed the proceedings were
coram non
judice.
When the points on which the opinions of the judges of the
circuit court were opposed were brought before the Supreme Court at
its January term, 1828, the cause was dismissed for want of
jurisdiction. But afterwards, at the January term, 1830, of the
Supreme Court, by the agreement of counsel, the record was amended
by inserting the allegation, "that the stockholders of the bank
were citizens of Georgia," and the cause was reinstated on the
docket, and dismissed because the whole case was certified, and not
the points on which the judges differed, as required by the act of
Congress. The cause was sent down to the circuit court by a
mandate, which directed that court to proceed therein according to
law.
This Court, it is contended, has no power to amend a record
brought before it, and consequently the above entry was void.
There is nothing in the nature of an appellate jurisdiction,
proceedings according to the common law, which forbids the
Page 49 U. S. 611
granting of amendments. And the thirty-second section of the
Judiciary Act of 1789, allowing amendments, is sufficiently
comprehensive to embrace causes of appellate as well as original
jurisdiction. 1 Gall. 22. But it has been the practice of this
Court, where amendments are necessary, to remand the cause to the
circuit court for that purpose. The only exception to this rule has
been where the counsel on both sides have agreed to the amendment.
This has been often done, and it has not been supposed that there
was any want of power in the Court to permit it. The objection is
that consent cannot give jurisdiction. This is admitted, but the
objection has no application to the case. Over the subject matter
of the suit and of the parties the court had jurisdiction, and the
amendment corrected an inadvertence by stating the fact of
citizenship truly.
When a cause is brought before this Court on a division of
opinion by the judges of the circuit court, the points certified
only are before us. The cause should remain on the docket of the
circuit court, and at their discretion may be prosecuted.
But if no amendment had been made, would the orders and decrees
in the case by the circuit court have been nullities? That they
have been erroneous, and liable to be reversed, is admitted. In
Skillern's Ex'rs. v. May's
Ex'rs., 6 Cranch 267, a final decree had been
pronounced, and by writ of error removed to the Supreme Court, who
reversed the decree, and after the cause was sent back to the
circuit court, it was discovered to be a cause not within the
jurisdiction of the court; but a question arose whether in that
court it could be dismissed for want of jurisdiction, after the
Supreme Court had acted thereon. The opinion of the judges being
opposed on that question, it was certified to the Supreme Court for
its decision. And this Court held "that the circuit court was bound
to carry the decree into execution, although the jurisdiction of
that court be not alleged in the pleadings."
The judgments of inferior courts, technically so called, are
disregarded, unless their jurisdiction is shown. But this is not
the character of the circuit courts of the United States. In
Kempe's Lessee v.
Kennedy, 5 Cranch 173,
9 U. S. 185,
this Court said
"The courts of the United States are all of limited
jurisdiction, and their proceedings are erroneous if the
jurisdiction be not shown upon them. Judgments rendered in such
cases may certainly be reversed, but this Court is not prepared to
say that they are absolute nullities which may be totally
disregarded."
And again in the case of
McCormick v.
Sullivant, 10 Wheat. 199, in answer to the argument
that the proceedings were void
Page 49 U. S. 612
where the jurisdiction of the court was not shown, the Court
said the argument
"proceeds upon an incorrect view of the character and
jurisdiction of the inferior courts of the United States. They are
all of limited jurisdiction, but they are not on that account
inferior courts in the technical sense of those words, whose
judgments, taken alone, are to be disregarded. If the jurisdiction
be not alleged in the proceedings, their judgments and decrees are
erroneous, and may, upon a writ of error or appeal, be reversed for
that cause. But they are not absolute nullities."
From these authorities it is clear that the proceedings in the
original case are not void for want of an allegation of citizenship
of the stockholders of the bank. They were erroneous, and, had no
amendment been made, might have been reversed within five years
from the final decree by an appeal or a bill of review. But the
mandate of this Court which contained the amendment as to the
citizenship of the stockholders of the bank, agreed to by the
counsel, was filed on 6 May, 1830, in the circuit court, and it
necessarily became a part of the record of that court. This was
before the final decree was entered, and it removed the objection
to the jurisdiction of the court. After this, the decree could not
have been reversed for the want of jurisdiction. In the case of
Bradstreet v.
Thomas, 12 Pet. 64, the Court held that an averment
of citizenship in a joinder in demurrer, not being objected to at
the time, was sufficient to give jurisdiction.
The sale of the bridge is alleged to be void, as it was made
without the consent of John McKinne, who was an equal partner with
Shultz.
The court ordered the bridge to be sold by Walker and
Fitzsimmons, commissioners, and that the parties should execute
powers of attorney to the commissioners authorizing the sale. All
the parties concerned executed the powers except McKinne, and his
refusal or neglect to do so prevented the sale. But afterwards the
court, with the assent of the complainants, ordered the bridge to
be sold for a sum not less than fifty thousand dollars by the same
commissioners, who were authorized to take possession of the bridge
and receive the tolls until the sale was made.
McKinne does not complain of this sale, and Shultz consented to
it. It was manifest from the embarrassment of the bridge company
that the bridge must be sold, and the nature of the property seemed
to require a speedy sale. All objection to that sale by the parties
on the record must be considered as having been waived by the
consent decree in May, 1830.
Page 49 U. S. 613
That decree "ratified and confirmed" the previous sale of the
bridge. That the counsel who consented to that decree represented
the parties named on the record is not controverted. A decree thus
assented to and sanctioned by the court must stand, free from all
technical objections.
But it is urged that the consent of Shultz to the final decree
did not bind his creditors, to whom he had assigned the bridge and
his other property under the insolvent act of South Carolina.
That assignment was made on 13 October, 1828. The bridge was
sold by the commissioners under the interlocutory decree of the
court in 1822, and the proceeds were held by the bank subject to
the order of the court. There was no abatement of the suit by the
assignment of Shultz. The insolvent laws of South Carolina had no
extraterritorial operation. They can only act upon the persons and
the property within the state. The assignment did not affect
property in Georgia, which was in the custody of the law --
property which had been sold, with the express consent of Shultz,
under the authority of a court of chancery, and the proceeds of
which were kept subject to the distribution of the court.
The trustee of Shultz took no step to connect himself with the
proceedings in the circuit court, although two years elapsed after
the assignment, before the final decree was entered. For about
seventeen years, he seems to have been passive in this matter, and
until the present bill was filed. After so great a lapse of time
without excuse, he cannot be heard to object to a decree which was
entered by consent. The power of attorney given by Shultz to the
commissioners, which authorized them to sell the bridge for the
purposes specified was conclusive upon him, and all claiming under
him. And the decree which was agreed to by his counsel followed as
a necessary consequence of the sale.
It does not appear that the holders of bridge bills had a
specific lien upon the bridge. They were creditors of the bridge
company, and could claim the rights of creditors against a
fraudulent conveyance of the bridge and of its proceeds. But such a
claim must be duly asserted and diligently prosecuted. A failure in
this respect for fifteen years might well be construed into an
acquiescence fatal to the claim. We cannot now, under the
circumstances stated, look into the decree to ascertain whether, in
the distribution of the proceeds of the sale of the bridge and of
the other property, the court may not have mistaken the rights of
some of the creditors of Shultz.
The objection that the mortgage to the bank under a statute
Page 49 U. S. 614
of Georgia was void, is not open for examination. If anything
was settled by the decree, it was the validity of that instrument.
And this remark applies to several of the other objections made by
the complainants. McKinne was a party on the record and through his
counsel assented to the final decree, but the counsel of Shultz now
object to its validity because McKinne did not assent to the sale
of the bridge. And this objection is for the first time made in the
bill before us. And it is not made by McKinne.
Within five years after the decree was entered, he might have
reversed it, if erroneous, by an appeal or a bill of review. And
that time having long since elapsed, the decree must stand as
concluding the rights of parties and privies, unless it shall be
held to be void. It cannot be so held, as we have shown, on the
reasons assigned in the bill. Fraud in the obtainment of the final
decree is not alleged in the bill. If this were stated and proved,
it would authorize the court to set aside the decree. But even this
would not affect the sale of the property unless the purchasers
should be in some degree connected with the fraud.
The final decree in the case, which covered and adjusted the
whole subject of controversy before the court, was not only
assented to by the counsel, but it was drawn up and agreed to by
them. The court adopted it as their own decree and entered it upon
their record. It confirmed the sale of the bridge, and made a
distribution of the proceeds. The bill was dismissed as to certain
matters where relief was not given. The proceedings were not void
for want of jurisdiction in the court. Nothing was left for its
future action. The whole controversy was terminated. And here the
matter rested for fifteen years, until the bill before us was
filed. It asks the court to set aside the decree, and reinvestigate
the whole matter of the former suit. No fraud is alleged against
the decree. The want of jurisdiction in the court, as urged, is not
sustained. Errors in the procedure cannot now be examined. The
decree of the circuit court is therefore
Affirmed.
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
Georgia and was argued by counsel. On consideration whereof it is
now here ordered, adjudged, and decreed by this Court that the
decree of the said circuit court in this cause be and the same is
hereby affirmed with costs.