Hill v. Phelps

• Decision Date: 09 April 1900
• Docket Number: 1,292.
• Parties: HILL et al. v. PHELPS et al.
• Court: U.S. Court of Appeals — Eighth Circuit

101 F. 650

HILL et al. v. PHELPS et al.

No. 1,292.

United States Court of Appeals, Eighth Circuit.

April 9, 1900

This is an appeal from an order which dismissed a bill of review upon demurrer. The bill was filed on April 20, 1898, and sought a modification of a decree of the court below rendered on December 22, 1897. The material facts it set forth were these: On July 3, 1894, J. M. Phelps and A. C. Phelps made their promissory note for $5,927.70 on account of a debt which they owed to the appellants. Afterwards A. C. Phelps made his individual note for this indebtedness, and induced the appellants, by false representations, to accept that note in lieu of the joint note. On June 3, 1896, the appellants obtained a judgment against A. C. Phelps upon this note for $6,881.25, and caused an execution to be issued thereon which was returned nulla bona. Meanwhile A. C. Phelps, for the purpose of defrauding the appellants out of their debt made to the appellee Adolph Sloan, as trustee, a deed of trust of his lands to secure an alleged indebtedness of $10,279.38 to the appellee the Lawrence County Bank, and alleged debts of $1,000 to each of the appellees F. G Williams, Mary A. Lester, and J. M. Cook; and the bank, for the purpose of defrauding the appellants, of preventing them from collecting their debt, and of covering up the land extended the time of payment of its claim of $10,279.38 for five years. Thereupon the appellants brought suit in the court below to reinstate the joint note of A. C. Phelps and J. M. Phelps in place of the separate note of A. C. Phelps, and to set aside the trust deed; and on December 22, 1897, a decree was rendered in that suit to the effect that the joint note should be substituted for the separate note, and that J. M. Phelps should pay it. The evidence in that suit indicated that the deed of trust to secure the Lawrence County Bank was made to hinder and delay the collection of the appellants' debt, but the court declared that as J. M. Phelps was amply solvent, and the decree against him would be sufficient to enable the appellants to recover the debt, it would not carry the adjudication further than was necessary to attain the ends of justice, and for this reason it denied any further relief. The appellants prayed an appeal from this decree, but the appellees paid off the decree, so that they could not prosecute their appeal to a hearing. At the time of the execution of the trust deed, A. C. Phelps owed another debt to the appellants, upon which they recovered judgment on December 26, 1896, for $58,641.41. On June 18, 1897, $40,708.60 was paid on this judgment, and the balance has not been paid. The appellants allege that they could not include this latter judgment in their suit without making their bill multifarious, and that the decree refusing to set aside the deed of trust in that suit is a conclusive adjudication against them, and bars a new suit for that purpose upon their second judgment; and for this reason they pray that the decree of December 22, 1897, be so modified as to adjudge the trust deed to Adolph Sloan to have been fraudulent in so far as it undertook to secure the payment of the debt to the Lawrence County Bank; that the land described in that deed be sold, and the proceeds thereof, so far as the interest of the bank is concerned, be applied to the payment of the second debt to the appellants, or, if this relief cannot be granted, that the decree be so modified as to dismiss the suit in which it was rendered, without prejudice to the rights of the appellants to proceed against the bank and Sloan.

G. B. Rose (U. M. Rose and W. E. Hemingway, on the brief), for appellants.

H. S. Ponder, J. W. Phillips, Charles Coffin, John W. Blackwood, and J. E. Williams, for appellees.

Before CALDWELL and SANBORN, Circuit Judges, and ROGERS, District Judge.

SANBORN Circuit Judge, after stating the case as above, .

The purpose of a bill of review is to obtain a reversal or modification of a final decree. There are but three grounds upon which such a bill can be sustained. They are (1) error of law apparent on the face of the decree and the pleadings and proceedings upon which it is based, exclusive of the evidence; (2) new matter which has arisen since the decree; and (3) newly-discovered evidence, which could not have been found and produced, by the use of reasonable diligence, before the decree was rendered. No departure has ever been made from the rules applicable to such a bill, which were declared by Lord Chancellor Bacon, in the first of his ordinances in chancery, in these words:

'No decree shall be reversed, altered, or explained, being once under the great seal, but upon bill of review. And no bill of review shall be admitted, except it contain either error in law, appearing in the body of the decree, without further examination of matters in fact, or some new matter, which hath arisen in time after the decree, and not any new proof, which might have been used, when the decree was made. Nevertheless, upon new proof, that is come to life after the decree was made, which could not possibly have been used at the time when the decree passed, a bill of review may be grounded by the special license of the court, and not otherwise.' Beames, Orders Ch. 1; Story, Eq. Pl. Sec. 404; 2 Daniel, Pl. & Prac.p. *1575; Kennedy v. Bank, 49 U.S. 586, 609, 12 L.Ed. 1209.

The error in law which will maintain a bill of review must consist of the violation of some statutory enactment, or of some recognized or established principle or rule of law or equity, or of the settled practice of the court. Error in matter of form or in the propriety of a decree, which is not contrary to any statute, rule of law, or to the settled practice of the court, is not sufficient to maintain a suit to review a final decree. Freeman v. Clay, 2 U.S.App. 254, 267, 2 C.C.A. 587, 593, 52 F. 1, 7; Hoffman v. Pearson, 8 U.S.App. 19, 38, 1 C.C.A. 535, 541, 50 F. 484, 490. Resort cannot be had to the evidence to discover this error of law. It must be apparent from the pleadings, proceedings, and decree, without a reference to the evidence, or it will not avail to sustain a bill of review. Whiting v. Bank, 13 Pet. 5, 14, 10 L.Ed. 33; Kennedy v. Bank, 49 U.S. 586, 609, 12 L.Ed. 1209; Putnam v. Day, 22 Wall. 60, 66, 22 L.Ed. 764; Buffington v. Harvey, 95 U.S. 99, 24 L.Ed. 381. The new matter which will authorize a review of a final decree must have arisen after its rendition. The newly-discovered evidence which may form the basis of such a review must be, not only evidence which was not known, but also such as could not, with reasonable diligence, have been found before the decree was made. City of Omaha v. Redick, 27 U.S.App. 204, 211, 11 C.C.A. 1, 6, 63 F. 1, 6; Dias v. Merle, 4 Paige, 259, 261; Henry v. Insurance Co. (C.C.) 45 F. 299, 303; Story, Eq. Pl. Secs. 338a, 423; 1 Barb.Ch.Prac. 363, 364; 1 Hoff.Ch.Prac. 398; Fost. Fed. Prac. Sec. 188, note 19.

The sole purpose of the original suit in equity in this case was to...