Thomas Sheldon and Eleanor Sheldon, His Wife, Appellants v. William Sill, Appellee

• Decision Date: 01 January 1850
• Citation: 12 L.Ed. 1147,49 U.S. 441,8 How. 441
• Parties: THOMAS C. SHELDON AND ELEANOR SHELDON, HIS WIFE, APPELLANTS, v. WILLIAM E. SILL, APPELLEE
• Court: U.S. Supreme Court

49 U.S. 441

8 How. 441

12 L.Ed. 1147

THOMAS C. SHELDON AND ELEANOR SHELDON, HIS

WIFE, APPELLANTS,

v. WILLIAM E. SILL, APPELLEE.

January Term, 1850

THIS was an appeal from the Circuit Court of the United States for the District of Michigan, sitting in equity.

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 the 1st of 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 the 3d day of 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.

The case was argued by Mr. Romeyn, for the appellants, and Mr. Ashmun (in a printed argument), for the appellee.

Only so much of the arguments will be given as bear upon the point of jurisdiction.

Mr. Romeyn, for the appellants.

The Circuit Court had no jurisdiction.

The complainant below claimed as assignee from a mortgagee, who was a citizen of the same state with the defendants, the mortgagors.

A bond and mortgage, under the laws of the state of Michigan, and in every court of equity, and by the adjudications of this court, on a bill filed to sell mortgaged property, foreclose the equity of redemption, and collect the debt secured by the mortgage, constitute a chose in action, within the intent and meaning of the eleventh section of the Judiciary Act of 1789.

Before stating the points under this, we beg leave to refer to the case of Dundas et al. v. Bowler, 3 McLean, 205. The opinion in that case was repeated by the court as its opinion in this. It asserts that the eleventh section of the Judiciary Act of 1789 'is in conflict with the Constitution;' that the right of a citizen of one state to sue the citizen of another state in the Federal courts, in all cases, is given directly by the Constitution; that Congress may not restrict it; that the converse is 'a new and most dangerous principle, and cannot be maintained.'

Points under this Proposition.

I. The eleventh section of the Judiciary Act of 1789, inhibiting a suit by an assignee of a chose in action, in cases where the assignor could not have sued, if no assignment had been made, is constitutional; because, the disposal of the judicial power, except in a few special cases, belongs to Congress; and the courts cannot exercise jurisdiction in every case to which the judicial power extends, without the intervention of Congress, who are not bound to enlarge the jurisdiction of the Federal courts to every subject which the Constitution might warrant. So, again, it has been decided, that Congress have not delegated the exercise of judicial power to the Circuit Courts, but in certain specific cases. Both the Constitution and an act of Congress must concur in conferring power upon the Circuit Courts. A considerable portion of the judicial power, placed at the disposal of Congress by the Constitution, has been intentionally permitted to lie dormant, by not being called into action by law. The eleventh section of the Judiciary Act of 1789, giving jurisdiction to the Circuit Courts, has not covered the whole ground of the Constitution, and those courts cannot, for instance, issue a mandamus, but in those cases in which it may be necessary to the exercise of their jurisdiction; for,—— 1st. This is the settled, practical construction, which, irrespective of express adjudications on this topic, concludes the question.

2d. The point itself has been repeatedly and fully discussed and directly settled, on solemn deliberation, and not 'without inquiry as to the validity of the act.'

We propose to cite some authorities on these propositions, in the above order; and then to notice the authorities cited in the opinion below.

First. Cases as to practical construction and its effect.

(The counsel then cited a number of cases under this head.)

Second. Cases to show that this principle has been deliberately settled.

The general principle for which we contend is the necessity of legislation to define and vest jurisdiction in the Circuit Court. The opposing principle is, the right and duty of the courts to exercise jurisdiction to the extent of the constitutional limit, by virtue of its provisions and without the authority of Congress. We refer to United States Bank v. Deveaux, 5 Cranch, 61; Osborne v. Bank of United States, 9 Wheat., 738; 1 Wash., 235; 7 Cranch, 32; Id., 504; 3 Wheat., 336; 12 Pet., 616; also 623, 642; 14 Id., 75; 2 How., 243.

In Turner v. Bank of America, 4 Dall., 8, the very question arose, and was decided. Cary v. Curtis, 3 How., 245; 1 Kent Com., 513.

(The counsel then reviewed the authorities cited to support the opinion in Dundas v. Bowler, and contended that they did not sustain it.)

II. The statute in question should be construed according to the ordinary and usual acceptation of the terms used in it. Because,——

1st. It is constitutional.

2d. If unconstitutional, it should be entirely rejected.

If sustained at all, it should be subjected to the ordinary rules of interpretation.

III. The phrase, 'other choses in action,' includes the bond and mortgage in this suit. Because,——

1st. The statute was not intended to be confined to negotiable instruments, as is intimated in Dundas v. Bowler, 3 McLean, 209. For,——

First. If an instrument not negotiable be assigned, the assignee can sue in equity in his own name, and therefore the reason given in Dundas v. Bowler is not sound.

Second. The exception, in the Judiciary Act, of foreign bills of exchange, will leave nothing of consequence for this language to cover, if it be confined to negotiable instruments.

Third. This comprehensive meaning of the clause is a matter of express decision,—decisions which have remained for forty years unquestioned. In Sere v. Pitot, 6 Cranch, 332, Chief Justice Marshall decides that promissory notes were not alone in the contemplation of Congress, and that the 'intention was to except from the jurisdiction those who could sue by virtue of equitable assignments, as well as those who could do so by virtue of legal assignments.' 'The term 'other chose in action,' is broad enough to include either case.'

2d. The object of the statute was to preserve to the state judicatures the interpretations and enforcement of contracts made between their own citizens; and the general nature of a bond and mortgage, and the fact that they affect the realty of the state, render it particularly proper that they should not be considered out of the statute.

3d. There is greater reason for inhibiting the collection of mortgage debts in the United States courts, by an assignee, than of negotiable instruments, because, in case of the latter, a transfer for the purpose of jurisdiction would defeat the action; while in the case of the former, if the assignment of a mortgage be viewed as the transfer of a title, the consideration cannot be made the subject of inquiry. Briggs v. French, 2 Sumn., 252; Smith v. Kernochen, 7 How., 216.

4th. The statute includes every such right as is ordinarily termed a chose in action; by which is meant, not a right which may be sued for, but one which can be realized only by suit; not a claim to property in specie, which may, if opportunity offer, be exercised by caption or entry, but a right to a debt, or damages, or money which can be recovered only by action. 1 Chit., 99.

A deed of land is not a chose in action. A writer on the jus mariti, after informing his readers that the husband might dispose of his wife's choses in action, will hardly need to add that this did not include her 'deeds for real estate.'

5th. The transferee of a bond and mortgage is usually termed an assignee, and therefore is within the act.

We ask an application of the old and familiar rule, that, when words of a fixed legal import are used in a statute, such meaning will be accorded to them in its construction. Chief Justice Marshall applied it to the interpretation of this statute in 6 Cranch, 332, when, referring to the reason why the court, in 4 Cranch, held that an alien administrator might sue when the intestate could not, he said, 'The representatives of a deceased person are not usually designated by the term assignee.' So Justice Story at the Circuit and this Court, on several occasions in determining that the bearer of a promissory note could sue when the payee could not, said that the plaintiff's title did not rest upon what was generally and commonly known as an assignment, and that the words of the statute were employed in the ordinary popular professional sense.

6th. Even at law, the mortgage is considered but as a chose in action, and the mortgagor is the real owner.

(The counsel then cited a number of cases to show how a mortgage, even at law, is regarded by the English courts, by American courts generally, and by the Federal courts.)

Doug., 610; 1 Powell on Mort., 109, 110; 4 Kent Com., 159, 160; 2...