Ayres v. Wiswall, 112 U.S. 187 (1884)

This is an appeal under § 5 of the act of March 3, 1875, ch. 137,18 Stat. 470, from an order of the Circuit Court p. 188remanding a case which had been removed from a State court. The suit was brought on the 15th of April, 1879, in the Circuit Court of Huron County, Michigan, by the appellees, citizens of New York, against Ebenezer Wiswall, also a citizen of New York; Ebenezer R. Ayres, a citizen of Ohio; Frederick S. Ayres, James S. Ayres, Charles G. Learned, citizens of Michigan, and many others whose citizenship did not appear, to foreclose a mortgage executed by Frederick S. Ayres, Charles G. Learned and Ebenezer Wiswall, to Catharine E. Wiswall, a citizen of New York, to secure a debt owing by them jointly to her. This mortgage, and the debt it secured, were assigned to the appellees before the suit was brought. After the mortgage was made, Ebenezer Wiswall contracted in writing to sell to Frederick S. Ayres his interest in the mortgaged property, subject to the mortgage debt which Ayres assumed to pay as part of the consideration money. Afterwards Learned sold and transferred to Ebenezer R. Ayres all his remaining interest in a part of the mortgaged property, subject to the mortgage which Frederick S. Ayres, James S. Ayres and Ebenezer Ayres bound themselves to pay. Between the time of the execution of the mortgage and the commencement of the suit, the mortgagors and their grantees sold and conveyed a large number of the parcels of the mortgaged property to various persons whose citizenship did not appear. All these purchasers were made parties. The bill, after setting forth the execution of the mortgage, and the various transfers and conveyances, and giving credit for certain payments on the mortgage debt, prayed that Frederick S. Ayres, Charles G. Learned and Ebenezer Wiswall be decreed to pay the amount found due on the mortgage debt, and in default that the property, or so much thereof as was necessary, might be sold and the proceeds applied to that purpose. It further prayed for execution against Frederick S. Ayres, Charles G. Learned, Ebenezer Wiswall and James S. Ayres for any balance of the debt which might remain due after the property was exhausted.

Ebenezer Wiswall and Learned filed separate answers to the bill, in which they admitted the execution of the mortgage and the debt for the security of which it was given, and asked p. 189that their respective grantees, who had assumed the payment of the mortgage debt, might be decreed to be first personally liable for any money decree that should be rendered.

u It appearing to the court that the record in this cause was p. 190improperly removed to the court from the Circuit Court of the County of Huron, in chancery, and that this court hath not jurisdiction of the cause, it is ordered that the proceedings had thereon in this court be, and the same are hereby set aside and held for naught, and that the said cause be remanded to the said Circuit Court for Huron County, in chancery, and that this cause be dismissed from this court for want of jurisdiction.”

The 5th section of the act of March 3, 1875, makes it the duty of the Circuit Court of the United States to remand a cause which has been removed from a State court when it shall appear to the satisfaction of the court, at any time after the suit has been removed, that such suit does not really and substantially involve a dispute or controversy properly within the jurisdiction of the court. For this purpose the Circuit Court retained its power over the suit and the parties until the end of the term at which the final decree was rendered. The parties were not, in law, discharged from their attendance in the cause until-the close of the term, and the decree, though entered, was “ in .the breast of the court ” until the final adjournment. Bac. Abr. tit. Amendment and Jeofail, A; Ex pa/rte Lange. 18 Wall. 163; Goddard n . Ordway, 101 U. S. 745, 752. The order to remand can be made at any time during the pendency of the cause when it shall appear there is no jurisdiction. The fact that Ebenezer R. Ayres had filed his answer in the United States court is a matter of no importance. That fact did not of itself confer jurisdiction if there had been none before. It will be for the State court, when the case gets back there, to determine what shall be done with pleadings filed and p. 191testimony taken during the pendency of the suit in the other jurisdiction.

The material facts of this case are entirely different from those in the Removal Cases, 100 IT. S. 457, where there was one controversy between the construction company and the railroad company as to the existence of a mechanics’ lien and the amount due thereon, and another between the construction company and certain mortgage trustees as to the priority of their respective hens. In the progress of the cause the p. 192mechanics’ lien was established against the company, and the property sold under the lien to pay the mechanics’ debt. This ended that controversy. There then remained to be settled the other controversy between the construction company and the mortgage trustees, and we held that, as the railroad company was not interested in that dispute, it was to be treated as a nominal party only. It stood indifferent between the two real parties. No decree was asked against it, and the rights of the parties who were really contending could be fully settled without its presence.

It remains to consider whether it was removable under the second clause, on the ground that there was in the suit “ a controversy which is wholly between citizens of different States, and which can be fully determined as between them.” The petition for removal was framed to meet this provision of the statute. What we have already said applies equally well to this branch of the case. The rule is now well established that this clause in the section refers only to suits where there exists “ a separate and distinct cause of action, on which a separate and distinct suit might have been brought and complete relief afforded as to such cause of action, with all the parties on one side of that controversy citizens of different States from those p. 193on the other. To say the least, the case must be one capable of separation into parts, so that, in one of the parts, a controversy will be presented with citizens of one or more States on one side and citizens of other States on the other, which can be fully determined without the presence of the other parties to the suit as it has been begun.” Frazer v. Jennison, 106 U. S. 191,194. As has already been seen, this is not such a case. There is here but one cause of action. The personal decree which is asked against Wiswall is incident to the main purpose of the suit. It presents no separate cause of action. The fact that separate answers were filed which raised separate issues in defending against the one cause of action, does not create separate controversies within the meaning of that term as used in the statute. They simply present different questions to be settled in determining the rights of the parties in respect to the one cause of action for which the suit was brought. Hyde v. Ruble, 104 U. S. 407 ; Winchester v. Loud, 108 U. S. 130; Shainwald V. Lewis, 108 U. S. 158.

These were suits against the United States to recover portions of the Geneva award. The insurance company sued on vol . cxn—is p. 194its own account ; the plaintiff Paulson, as receiver of the Columbian Insurance Company. Motions to dismiss for want of jurisdiction were made in both cases, and were heard together. The facts making the case are stated in the opinion of the court.

The petition then alleges that the British government, by its laches and unfriendliness, in permitting these cruisers to be built, fitted out, and furnished with supplies within its p. 195donnnion, became responsible for the losses inflicted on the owners of the vessels and cargoes captured and destroyed by them. That petitioner placed these claims in the hands of the Secretary of State, with the evidence to prove them against that government. The negotiation, treaty, and award known as the Alabama Claims Treaty and the Geneva Award are then set out, with the allegation that the sum now claimed by petitioner entered into and constituted a part of the $15,500,000 which was awarded to the United States in satisfaction of all claims of this character.

If, therefore, the claim is well 11 founded on a contract, express or implied, with the United States,” within the meaning p. 196of § 1059 Rev. Stat., and is not forbidden by any other act of Congress, the petition should not have been dismissed; but if it does not present such an implied contract (for there is no pretence of an express contract), or if for any other reason the case is one of which the Court of Claims is forbidden to entertain jurisdiction, then the judgment of dismissal was correct.

Under these circumstances we do not think it appropriate to p. 197express an opinion on the legal or moral obligation of the government in the matter, unless it is in the line of a plain duty.

In a still clearer sense it is obvious that this recognition of the claim by the award and its payment to the United States, Were dependent on the treaty stipulation. Without the treaty the award would have bound nobody, and would have been at most a friendly recommendation. By virtue of the treaty it p. 198became a most solemn and important international obligation, whereby Great Britain became bound, as much as a nation can be bound, to pay the amount of the award, and, at the same time, became freed and discharged from any further liability on account of any claims of that class.

In the former case the United States agreed, for a valuable p. 200consideration in land or territory, to pay to Mexico $3,250,000 to her creditors residing in the United States. In the latter the government received $15,500,000 from England, under what is alleged to be an implied promise to pay a class of American claims against her. We can see no difference in principle in the two cases, as they have relation to the fact that both claims grew out of, and were dependent on, treaty stipulations.

W. Hallett Phillips for the rule and against the motion to dismiss or affirm.—The appointment of Moore after the date of such allowance was nullity, and Moore by accepting the appointment and undertaking to discharge the functions of the office, acted in gross violation of the supersedeas. Unless we are correct in this position, the supersedeas was a mere mockery. Thus in Green n . Van Buskerk, 3 Wall. 448, which came here under the 25th section, an order for execution on a judgment was entered, notwithstanding the plaintiff in error had obtained a supersedeas within ten days after judgment. On application of the plaintiff in error, this court ordered a writ of supersedeas to issue. The Chief Justice delivering the unanimous opinion of the court says : “ The unsuccessful party had ten days from that entry (of judgment) to take out a writ of error and make it a supersedeas ; and he duly availed himself of this right by service of the writ of error on the 30th of February, 1866, and giving the required bonds.” See also Slaughter-House Cases, 10 Wall. 273, 291 ; Stafford n . Union Ba/nk of Louisiana, 16 How. 135,139; Adams n . Law, 16 How. 144,148. We would confidently submit this view, were it not for the fact that this court, in the recent case of Doyle n . 'Wisconsin', 94 U. S. 40, has declared that the provision in the act of 18T5, re-enacting the stay of ten days contained in the act of 1789, has reference only to the p. 203courts of the United States. No reference is made in the opinion of the court to the previous decisions. We submit that it cannot be reconciled with those decisions, nor with the long settled practice of the court. In Commissioners n . Gorman, 19 Wall. 661, no bond having been given within the ten days from judgment, execution issued. The plaintiff in error gave bond within sixty days. A motion was made that a writ should issue from this court to restore the plaintiff in error to the office, from which he had been ousted under the execution. The contention was that under the act of June 1, 1872, a party had sixty days within which to give the bond, and that no execution could issue during that period. This court, however, held, that under the act there was only an absolute stay of execution for ten days from judgment; that although a bond might be given within the sixty days, the supersedeas only dated from the time of the approval and filing of the bond. In that case the execution had issued prior to the filing of the bond, and no notice was given that any had been approved. It nowhere appeared from the record when the bond was approved. The court held that under these circumstances the writ of error operated as a supersedeas only from the filing.

The showing under this rule presents the following facts: The Supreme Court of Kansas rendered a judgment on the 1st of April, 1884, removing Foster, the plaintiff in error, from the office of county attorney of Saline County. A statute of the State makes it the duty of the judge of the District Court of a county to fill the office of county attorney when a vacancy exists. A writ of error from this court for the reversal of the judgment of the Supreme Court was duly allowed in Washington on the 5th of April, and a supersedeas bond approved, and a citation signed. Notice of these facts was telegraphed on the same day, by the counsel of Foster in Washington, to his p. 204counsel in Kansas. On the 7th, the counsel in Kansas called on the judge of the District Court of the county, and exhibited to him the telegram and notified him of what had been done in Washington. After this, and a little before twelve o’clock of the night of the 7th, the judge appointed Joseph Moore to the office in place of Foster. The bond of Moore, which had been executed on the 7th, and then approved by the clerk of the county, was accepted by the county commissioners on the 8th of April, and Moore thereupon assumed to discharge the duties of his office. Before this appointment was made, an authenticated copy of the record of the Supreme Court removing Foster from the office was presented to the judge. On the same day, the 8th, the writ of error and supersedeas bond arrived from Washington, and were duly lodged in the office of the clerk of the Supreme Court of the State. At the next term of the District Court, which began on the 12th of May, Moore appeared and acted as county attorney, the judge ruling that he, and not Foster, was properly in office.

The judgment operated of itself to remove Foster and leave p. 205his office vacant. It needed no execution to carry it into effect. The statute gave the judge of the District Court authority to fill the vacancy thus created. The judge was officially notified of the vacancy on the 7th, when the authenticated copy of the record of the Supreme Court was presented to him. The operation of that judgment was not stayed by the supersedeas until the 8th, that being the date of the lodging of the writ of error in the clerk’s office. It follows that the office was in fact vacant when Moore accepted his appointment, gave his bond, and took the requisite oath. He was thus in office before the supersedeas became operative. What effect the supersedeas had, when it was afterwards obtained, on the previous appointment, we need not consider. This is not an appropriate form of proceeding to determine whether Foster or Moore is now legally in office.

This record shows that the Attorney-General of the State of Kansas commenced proceedings in quo warranto in the Supreme Court of the State against John Foster, county attorney of Saline County, to remove him from office because he had neglected and refused to prosecute persons who were gudty of selling intoxicating liquors in the county in violation of a statute of the State known as the prohibitory liquor law. Among other defences relied on by the defendant was one to the effect that the statute under which the prosecutions were to be instituted was in violation of the Constitution of the United States, and therefore void. It was also claimed that the writ of quo warranto in Kansas was a criminal proceeding, and that under the Constitution of the United States the defendant was entitled to a trial in accordance with the criminal code of procedure. The court ruled against the defendant on all these claims and defences, and charged the jury that the sections of the prohibitory liquor law involved in the proceeding were not repugnant to the Constitution of the United States. p. 206The trial resulted in a verdict against the defendant and a judgment thereon removing him from office. This writ of error was brought to reverse that judgment, and the State now moves to dismiss the case for want of jurisdiction, and with that has united a motion to affirm. This can be done under Rule 6, sec. 5, of this court.

The answer of the defendant denied all the charges of fraud p. 208made in the petition, and alleged that the defendant made the sale of the plaintiffs’ half of the property by virtue of a power of attorney authorizing him to sell it for $200,000, and stated facts showing, as the defendant insisted, that he was guilty of no fraud in procuring the power of attorney; and that the plaintiffs, before executing it, were fully advised by the defendant of his purpose to sell his own half of the land for a larger price than that for which the power of attorney authorized the sale of the plaintiffs’ half, the defendant undertaking to pay all the expenses of bringing about a sale; and that, with full knowledge of the facts, plaintiffs agreed to the arrangements for selling the property and executed the power of attorney.

The pleadings and the bill of exceptions, which embodied all the evidence, disclosed the following facts respecting the parties below: The plaintiffs, on or before November 6,1871, were the owners of an undivided half in common of certain lots, forming a part of what was known as the Central Tract, situate in the city of Cleveland, in the State of Ohio, and the defendant, Stone, was the owner of the other undivided half in common. For several years previous to November 6,1871, and until the sale of the property as hereafter mentioned, the defendant was the agent of the plaintiffs, having the charge and management of their estate in said property, with power to “ work up ” sales of the same, either in parcels or as a whole, but without power to make contracts of sale or to convey. On or about November 6, 1871, the defendant, who was a resident of Cleveland, sent by mail to the plaintiffs, who resided in New York, a power of attorney, dated November 7, to be executed by them, which, when executed, would authorize him to sell, by contract in writing, their undivided half of the real estate above mentioned for the consideration of $200,000, of which $40,000 was to be paid cash down, and the residue in eight annual payments of $20,000 each, with interest at six per cent., to be secured by mortgage on the property sold. The authority conferred by the power was to expire in sixty days from the date of the power. In a letter written by the defendant to the plaintiffs, which enclosed the power of attorney, and which bore date November 6, 1871, the defendant said, referring to p. 209the power of attorney: “ I think I can sell, on the terms therein set forth, the land therein mentioned to a responsible party, within sixty days from now, and perhaps by the first of December next, but, in order to do so, entire secrecy must be observed in regard to the matter, and I must be allowed to bring about the sale in my own way.” He added: “ I advise the sale and desire an immediate reply. If a sale is made, I expect to make special terms for my interest.” After the receipt of this letter and the draft of the power of attorney, to wit, about November 12, the plaintiffs sent their agent, Mr. Tatlow Jackson, to Cleveland, with a letter to the defendant, in which they said: “He,” Mr. Jackson, “goes at our express request to confer with you in reference to the subject matter of yours of the sixth instant. You will oblige us by communicating to him as freely as you would to us. The proposition contained in your letter is of such magnitude as to enjoin the most thorough canvass and consideration—hence Mr. Jackson’s mission.”

vol , cxn—14 p. 210that the use to which their common property might, if sold, be put would depreciate the value of other adjacent real estate on the Cuyahoga River owned by him.

On the same day, December 1st, Day wrote to his co-plam-tiff, Barlow, as follows: “ After a lengthy interview with Mr. Stone, I am strongly inclined to believe that we had better authorize him to sell that portion of the Central Tract, 485 lots, in the manner proposed by him;r and then, after giving 18 p. 211reasons for the opinion, added, “ I therefore think it wise to conform to the terms of his proposition.”

eac . The latter contract contained a provision that unless e plaintiffs within one year delivered the deed to the railroad company for their undivided half of the land, the railroad p. 212company should elect whether it would carry out its contract with the defendant or rescind the same.

“ It is not enough that the defendant should have written the plaintiffs, when he applied for the power of attorney, that he expected to make special terms for himself, or that he should have told the plaintiffs or their agent that he would not sell for the price fixed by them, but expected to get more for his share. He cannot claim and take to himself the benefit of the discrimination in his favor, unless the evidence satisfies you that he had fully communicated all the facts to the plaintiffs before he consummated the sale—all the facts known to him in relation to the chances of selling—so as to enable the plaintiffs intelligently to decide whether they would consent to the proposed discrimination in defendant’s favor or not. Such would be the rights of the parties, even if the defendant did not know or had not reason to believe, before he accepted the said p. 213power of attorney, and undertook to execute it, that the land could be sold for more.”

“ The court further instruct you that if you shall find that the power of attorney was obtained fairly, and after the communication by defendant to the plaintiffs of all the material facts and information, as aforesaid, but that he ascertained afterwards that he could sell the land, the whole of it, at $500,000, and that he refused to disclose the price or the name of the purchaser, but undertook to bring about the sale in his own way, he was in duty bound to accept the offer of $500,000 p. 214made by the purchasers, as well for his principal as for himself ; and if he, instead of making the sale for the benefit of both, sold plaintiffs’ part for $200,000 and his own for $300,000, he is not authorized to retain the excess to himself, but that he is, in equity and good conscience, bound to share the same with his principals, unless he made a full disclosure to them of all the facts material for them to know, and they, with such full knowledge and for reasons which they deemed sufficient, consented to the unequal division of the purchase money which the defendant made of it. If he did not so disclose the material facts in regard to the value or the amount received, and obtain plaintiffs’ consent that he might retain three-fifths of the purchase money, as it is admitted he did, the plaintiffs are entitled to recover the one-half of such excess, so received and retained by defendant, as per my former instructions.”

We think there was error in the charges complained of. To test their correctness we must assume the truth of the facts which the testimony submitted to the jury tended to prove. It was the duty of the court to submit to the consideration of the jury the testimony adduced by the defendant to sustain the defences set up in his answer, and the charge should have been based on the hypothesis that the defences which the testimony tended to prove were proven. The evidence tended to show that no fraud was practised by the defendant in p. 215procuring the power of attorney; in fact, the charge proceeds on this assumption; it tended to show that the plaintiffs, after full conference with the defendant, consented that he might secretly conduct the negotiations for the sale, that he might manage the sale of the property in his .own way, and that he should be free to dispose of his own half as he pleased; that, in case he sold their half for $200,000, he might sell his own half for any. price he could get. If the plaintiffs gave their consent in advance of any sale, it was immaterial to them what price the defendant got for his share of the land, and he was under no obligation to disclose the price to the plaintiffs and ask their consent to retain it. The effect of the charge of the court was to withdraw from the jury all the evidence tending to show the antecedent assent of the plaintiffs, fairly obtained, to the sale made by the defendant, and to instruct the jury that nothing but their subsequent assent could be effectual. This was error. Adams v. Roberts, 2 How. 486; Reese v. Beck, 24 Ala. 651 ; Grube v. Nichols, 36 Hl. 92; Chappell v. Allen, 38 Missouri, 213, 220.