255 U.S. 398 (1921), 173, Pierce v. United States

Docket Nº:No. 173
Citation:255 U.S. 398, 41 S.Ct. 365, 65 L.Ed. 697
Party Name:Pierce v. United States
Case Date:March 07, 1921
Court:United States Supreme Court
 
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Page 398

255 U.S. 398 (1921)

41 S.Ct. 365, 65 L.Ed. 697

Pierce

v.

United States

No. 173

United States Supreme Court

March 7, 1921

Argued January 24, 1921

APPEAL FROM THE CIRCUIT COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

Syllabus

1. A judgment for a fine imposed in a criminal case is enforceable, like a civil judgment, by execution (Rev.Stats., § 1041), and by creditor's bill. P. 401.

2. A corporation against which an indictment was pending for taking rebates in violation of the Elkins Act divested itself of its assets by distributing them among its stockholder, who were also its officers and had notice of the prosecution. Held that the United States, having secured a conviction a year later upon which a fine

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was imposed, was entitled to pursue the assets by creditor's bill against the stockholders to satisfy the judgment. P. 402.

3. The United States, to satisfy a judgment recovered and upon which execution has been returned unsatisfied in one district, may bring a creditor's bill in another district in another state, without a preliminary issue of execution and return of nulla bona there. So held where it was agreed that the judgment debtor had no property out of which the judgment could have been satisfied at law. P. 404.

4. A corporation against which an indictment was pending under the Elkins Act sold all its property to another corporation, which assumed its "debts, obligations, and liabilities" as part of the purchase price. Held that, assuming the second corporation thus became liable to satisfy a judgment for a fine imposed upon a subsequent conviction in the criminal case, the existence of such legal remedy did not operate to debar the United States from seeking satisfaction of the judgment in equity by a creditor's bill against the stockholders of the first corporation, nor did the institution by the United States of a suit against the second company to subject land, part of the property purchased, to its judgment amount to an election of remedies. P. 404.

5. Inasmuch as a judgment in favor of the United States may be made the basis of an execution in any state and district (Rev.Stats. § 986), the objection that a corporation against which the United States has a judgment in one district is a necessary party to a creditor's bill brought by the government in another state and district to obtain satisfaction from the stockholders is purely technical and, if not made in the circuit court of appeals, cannot be availed of in this Court as a ground for attacking a decree against the stockholders. P. 405.

6. Under Rule 24 of the Circuit Court of Appeals for the Eighth Circuit, a plain error may be noticed though not assigned or specified. Held that such an error, refused consideration in that court because first called to its attention by petition for rehearing, was assignable and reviewable here. P. 405.

7. A judgment recovered by the United States as a fine in a prosecution by indictment does not bear interest, since interest is statutory, and Rev.Stats. § 966, the provision most nearly applicable, applies only to judgments recovered by civil process. Id.

257 F. 514 modified and affirmed.

Appeal from a decree of the circuit court of appeals affirming a decree of the district court in favor of the

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United States in a creditor's suit brought by the government against stockholders to satisfy a fine recovered from their corporation.

BRANDEIS, J., lead opinion

MR. JUSTICE BRANDEIS delivered the opinion of the Court.

In 1907, the Waters-Pierce Oil Company, a Missouri corporation, was indicted in the district court of the United States for the Western District of Louisiana under the Elkins Act (Act Feb.19, 1903, c. 708, § 2, 32 Stat. 847) for receiving rebates. In 1913, the company sold and transferred all its property to the Pierce Oil Corporation, all the proceeds were paid to Henry S. Priest and Clay Arthur Pierce as trustees, and they distributed the same among the stockholders. Of these Henry Clay Pierce and the Pierce Investment Company received millions in cash and stock and Clay Arthur Pierce a small amount. In 1914, the case under the Elkins Act was tried. The company was convicted and sentenced to pay a fine of $14,000, and in the following year the judgment was affirmed by the circuit court of appeals. Waters-Pierce Oil Co. v. United States, 222 F. 69. An execution issued thereon to the marshal for that district, and was returned nulla bona. Thereafter, this bill in equity was brought by the United States in the federal District Court for the Eastern district of Missouri against the Waters-Pierce Oil Company, the trustees, and these three stockholders to obtain satisfaction of the judgment out of the money remaining in the hands of the trustees and that received by these stockholders. The district court entered a decree dismissing the bill as against the Waters-Pierce Company and the trustees, but granted, as against the stockholders

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named, the relief prayed by the government. The decree was affirmed by the Circuit Court of Appeals for the Eighth Circuit, one judge dissenting. The case is brought here by these defendants, under § 241 of the Judicial Code. Reversal is sought on several grounds.

First. The ground for reversal most strongly urged is that the judgment imposing a fine on the Waters-Pierce Company is not a debt on which a creditor's bill will lie. The argument is that a judgment for a definite sum of money does not necessarily endow the holder with all the rights of a creditor; that a court will look behind a judgment and will grant or deny relief according to the nature of the original cause of action, as it did in Wisconsin v. Pelican Insurance Co., 127 U.S. 265, Louisiana v. New Orleans, 109 U.S. 285, and Wetmore v. Markoe, 196 U.S. 68, and that, since liability for a penalty is criminal in its nature and not strictly a debt, a creditor's bill cannot be brought upon a judgment for a penalty. It is true that to the liability for penalties imposed by the United States certain incidents of a criminal proceeding attach. See Boyd v. United States, 116 U.S. 616; United States v. Stevenson, 215 U.S. 190, 199. But the liability is often enforced by civil proceedings, and specifically by the action of debt. Lees v. United States, 150 U.S. 476. See Adams v. Woods, 2 Cranch 336, 340. And then certain incidents of civil proceedings attach. Hepner v. United States, 213 U.S. 103.

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