Furnald v. Glenn

• Decision Date: 15 June 1893
• Citation: 56 F. 372
• Parties: FURNALD v. GLENN. THIRTEEN OTHER CASES v. SAME.
• Court: U.S. District Court — Southern District of New York

56 F. 372

FURNALD v. GLENN.

THIRTEEN OTHER CASES

v.

SAME.

United States Circuit Court, S.D. New York.

June 15, 1893

Burrill Zabriskie & Burrill, for complainants.

Burton N. Harrison, for defendant.

TOWNSEND District Judge.

These are bills in equity for injunctions against the prosecution of actions at law, brought by the defendant herein, to recover of the several complainants amounts unpaid upon stock of the National Express & Transportation Company held by them. The facts concerning the insolvency of said express company, and the proceedings which led up to the appointment of the present trustee, are fully set out in Glenn v Marbury, 145 U.S. 499, 12 S.Ct. 914. As the other questions to be passed upon are raised in all the cases, they will be considered and disposed of together. What is hereafter said applies to each of the cases.

The action at law sought to be enjoined is, in part, based upon decrees of a Virginia court, adjudging the validity of a certain deed of trust, and that unpaid subscriptions passed thereunder, appointing the defendant herein trustee, and making and directing the enforcement of certain calls for payment on the stock. The ground upon which it is urged that the action at law be enjoined is that, as claimed, the decrees were procured by fraud or collusion. It is urged also, that the Virginia court had no jurisdiction of the corporation in the suit in which the decrees were made. If it were necessary to pass upon the question as to whether said corporation had a reasonable opportunity to defend against said suit, I should find that due service of process was made upon William H. Perot, the president, and Joseph R. Anderson a director, of said corporation, and that the stockholders were bound by the decree therein. Hawkins v. Glenn, 131 U.S. 319, 9 S.Ct. 739. But this question of jurisdiction being open to inquiry in the action at law, it seems unnecessary, and perhaps improper, to pass upon it in this suit. Thompson v. Whitman, 18 Wall. 457.

It appears to be established by the decisions of the supreme court of the United States and other authorities that one court should not interfere with the operation of a judgment or decree of another court because procured by fraud or collusion, if the complainant either still has an opportunity to obtain relief by revealing the facts to the latter court in the suit before it, or has lost such opportunity by his own neglect. In Graham v. Railroad Co., 118 U.S. 161, 6 S.Ct. 1009, the supreme court approves the statement of the law made by Judge Nelson in the circuit court, (14 F. 753,) as follows:

'In Nougue v. Clapp, 101 U.S. 551, it was held that the circuit court of the United States cannot revise or set aside a final decree rendered by a state court which had complete jurisdiction of the parties and subject-matter upon the ground that the decree was obtained by fraud, where the injured party has had an opportunity to apply to the state court to reverse the decree. The plaintiff is a party to the foreclosure suit as a shareholder in the old corporation. The state court is still open to listen to the complaint of the corporation and its shareholders. The decree of the foreclosure, though final in one sense, as determining the respective rights of the parties to the property in question, is still in its nature interlocutory, and is open to review by the court, upon petition or motion in the cause, or by bill of review, for good cause shown. The plaintiff has, therefore, an ample and complete remedy for all his alleged grievances in the state court, and there is no occasion for his application to this court for relief by bill in equity.'

Judge Nelson, in that part of his opinion immediately preceding the foregoing quotation, laid down the rule upon which the complainant relies, with its limitations, as follows:

'It is well settled in the courts of the United States that when a decree or judgment has been obtained against a party to a suit at law or in equity by fraud or deception practiced upon him by his opponent, and he has lost, without fault of his, his remedy of applying to the court for the revocation or reversal of the decree or judgment, a court of equity will afford him relief.'

Foster v. Railroad Co., 146 U.S. 88, 13 S.Ct. 28; Marshall v. Holmes, 141 U.S. 589, 12 S.Ct. 62; Kent v. Iron Co., 144 U.S. 75, 12 S.Ct. 650; Sanders v. Soutter, 126 N.Y. 193, 199, 27 N. E. Rep. 263; Insurance Co. v. Hodgson, 7 Cranch, 332; 1 Black, Judgm. §§ 362, 371.

If, them, the Virginia court still has the power in the suit in which the decrees were made to modify such decrees, or to give effect to them in the subsequent proceedings, so that no right of the complainant shall ultimately be violated, there would seem to be no ground for any relief in this suit. This is equally true if the court had such power for a reasonable time after the complainant had notice, actual or constructive, of said suit.

That the plaintiff in the Virginia suit was a creditor of the company in some amount, and so...