Scott v. Neely

• Citation: 35 L.Ed. 358,11 S.Ct. 712,140 U.S. 106
• Parties: SCOTT et al. v. NEELY et al
• Decision Date: 27 April 1891
• Court: United States Supreme Court

140 U.S. 106

11 S.Ct. 712

35 L.Ed. 358

SCOTT et al. v. NEELY et al.

April 27, 1891.

[Statement of Case from pages 106-108 intentionally omitted] Edward Mayers, for appellants.

W. V. Sullivan and F. A. Montgomery, for appellees.

Mr. Justice FIELD, after stating the facts as above, delivered the opinion of the court.

This is a suit in equity to subject the property of the defendants to the payment of a simple contract debt of one of them, in advance of any proceedings at law, either to establish the validity and amount of the debt or to enforce its collection. It is founded upon sections 1843 and 1845 of the Code of Mississippi of 1880, being parts of the chapter which treats of the chancery courts of the state. They are as follows: 'Sec. 1843. The said courts shall have jurisdiction of bills exhibited by creditors who have not obtained judgments at law, or, having judgments, have not had executions returned unsatisfied, to set aside fraudulent conveyances of property, or other devices resorted to for the purpose of hindering, delaying, or defrauding creditors; and may subject the property to satisfaction of the demands of such creditors; as if complainant had a judgment and execution thereon returned, 'No property found." 'Sec. 1845. The creditor, in such case, shall have a lien upon the property described therein from the filing of his bill, except as against bona fide purchasers before the service of process upon the defendant in such bill.'

At the outset of the case the question is presented whether a suit of this kind, where the complainant is a simple contract creditor, can be maintained in the courts of the United States. It is sought to uphold the affirmative of this position on the ground that the statute of Mississippi creates a new equitable right in the creditor, which, being capable of assertion by proceedings in conformity with the pleadings and pratic e in equity, will be enforced in those courts. The cases of Clark v. Smith, 13 Pet. 195; Broderick's Will, 21 Wall. 503; and Holland v. Challen, 110 U. S. 15, 3 Sup. Ct. Rep. 495,—are cited in its support. The general proposition, as to the enforcement in the federal courts of new equitable rights created by the states, is undoubtedly correct, subject, however, to this qualification: that such enforcement does not impair any right conferred, or conflict with any inhibition imposed, by the constitution or laws of the United States. Neither such right nor such inhibition can be in any way impaired, however fully the new equitable right may be enjoyed or enforced in the states by whose legislation it is created. The constitution, in its seventh amendment, declares that 'in suits at common law where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved.' In the federal courts this right cannot be dispensed with, except by the assent of the parties entitled to it; nor can it be impaired by any blending with a claim, properly cognizable at law, of a demand for equitable relief in aid of the legal action, or during its pendency. Such aid in the federal courts must be sought in separate proceedings, to the end that the right to a trial by a jury in the legal action may be preserved intact. In the case before us the debt due the complainants was in no respect different from any other debt upon contract. It was the subject of a legal action only, in which the defendants were entitled to a jury trial in the federal courts. Uniting with a demand for its payment, under the statute of Mississippi, a proceeding to set aside alleged fraudulent conveyances of the defendants, did not take that right from them, or in any respect impair it. This conclusion finds support in the prohibition of the law of congress respecting suits in equity. The sixteenth section of the judiciary act of 1789 enacted that such suits 'shall not be sustained in either of the courts of the United States in any case where plain, adequate, and complete remedy may be had at law;' and this prohibition is carried into the Revised Statutes. Section 723. It is declaratory of the rule obtaining and controlling in equity proceedings from the earliest period in England, and always in this country. And so it has been often adjudged that whenever, respecting any right violated, a court of law in competent to render a judgment offording a plain, adequate, and complete remedy, the party aggrieved must seek his remedy in such court, not only because the defendant has a constitutional right to a trial by jury, but because of the prohibition of the act of congress to pursue his remedy in such cases in a court of equity. Hipp v. Babin, 19 How. 271, 278; Lewis v. Cocks, 23 Wall. 466, 470; Killian v. Ebbinghaus, 110 U. S. 568, 573, 4 Sup. Ct. Rep. 232; Buzard v. Houston, 119 U. S. 347, 351, 7 Sup. Ct. Rep. 249. All actions which seek to recover specific property, real or personal, with or without damages for its detention, or a money judgment for breach of a simple contract, or as damages for injury to person or property, are legal actions, and can be brought in the federal courts only on their law side. Demands of this kind do not lose their character as claims cognizable in the courts of the United States only on their law side, because in some state courts, by virtue of state legislation, equitable relief in aid of the demand at law may be sought in the same action. Such blending of remedies is not permissible in the courts of the United States.

In Bennett v. Butterworth, 11 How. 669, 674, in commenting upon the practice prevailing in the courts of Texas, Mr. Chief Justice TANEY, after observing that, although the common law had been adopted in Texas, the forms and rules of pleading in common-law cases had been abolished, and the parties were at liberty to set out their respective claims and defenses in any form that would bring them before the court, said: 'Atho ugh the forms and proceedings and practice in the state courts have been adopted in the district court, yet the adoption of the state practice must not be understood as confounding the principles of law and equity, nor as authorizing legal and equitable claims to be blended together in one suit. The constitution of the United States, in creating and defining the judicial power of the general government, establishes this distinction between law and equity; and a party who claims a legal title must proceed at law, and may undoubtedly proceed according to the forms of practice in such cases in the state court. But, if the claim is an equitable one, he must proceed according to rules which this court has prescribed, (under the authority of the act of August 23, 1842,) regulating proceedings in equity in the courts of the United States.' This decision was followed in Thompson v. Railroad Co., 6 Wall. 134, 137; the court there observing that 'the remedies in the courts of the United States are, at common law or in equity, not according to the practice of the state courts, but according to the principles of common law and equity, as distinguished and defined in that country from which we derive our knowledge of these principles;' citing also, to that effect, the case of Robinson v. Campbell, 3 Wheat. 212. In Fenn v. Holme, 21 How. 481, 484, 486, the same doctrine was affirmed. The Code of Mississippi gives to a simple contract creditor a right to seek in equity, in advance of any judgment or legal proceedings upon his contract, the removal of obstacles to the recovery of his claim caused by fraudulent conveyances of property. There the whole suit, involving the determination of the validity of the contract, and the amount due thereon, is treated as one in equity, to be heard and disposed of without a trial by jury. It is not for us to express ary opinion of the wisdom of this law, or whether or not in its operation it is more advantageous in the interests of justice than an entire separation of proceedings at law from those for equitable relief. It is sufficient that under the statute of the United States such separation is required in the federal courts, and by the constitution, in cases at common law, a right to a trial by jury is secured to the defendant.

The attempt is made to assimilate the enforcement of the state law in the federal courts in the same manner as in the state courts to proceedings in suits to enforce mortgages and other liens upon property, created by contract as security for loans and advances. No jury, it is said, is required in those suits to ascertain the amount due on the mortgage debt; and why, it is asked, should there be any jury in the case under the state statute—that...