Hoffman v. Clelland

• Decision Date: 21 April 1924
• Docket Number: No. 190,190
• Citation: 68 L.Ed. 845,44 S.Ct. 407,264 U.S. 552
• Parties: HOFFMAN et al. v. McCLELLAND et al
• Court: U.S. Supreme Court

264 U.S. 552

44 S.Ct. 407

68 L.Ed. 845

HOFFMAN et al.

v McCLELLAND et al.

No. 190.

Argued Jan. 23, 1924.

Decided April 21, 1924.)

Messrs. Tom Connally, of Washington, D. C., and James D. Williamson, of Waco, Tex., for appellants.

[Argument of Counsel from pages 552-554 intentionally omitted] Mr. Joseph M. McCormick, of Dallas, Tex., for appellees.

Mr. Justice VAN DEVANTER delivered the opinion of the Court.

This is an appeal from a decree of the District Court for the Western District of Texas refusing leave to file a bill proffered as a petition of intervention in a designated suit in that court. The appeal was taken to the Circuit Court of Appeals and was by that court transferred here according to section 238a of the Judicial Code (42 Stat. 837, c. 305 [Comp. St. Ann. Supp. 1923, § 1215a]), on the ground that it should have been taken directly to this court under section 238 (Comp. St. § 1215), 284 Fed. 837.

The suit in which intervention was sought already had been prosecuted to a final decree; but the decree contained a provision whereby jurisdiction was retained for limited purposes, one of which will be hereinafter shown. The suit arose out of conflicting claims asserted under the will of Peter McClelland, Sr., a resident of McLennan county, in the Western district of Texas, who died in 1886, seized of valuable real property in that county. The will put the property in a so-called spendthrift trust, of which Peter McClelland, Jr., the testator's son and only child, was the beneficiary. Through an order of the state court in McLennan county, John K. Rose, a citizen of Texas, became the substituted trustee under the will, and as such was holding the property and administering the trust when the suit was begun. The son, who was a citizen of California, was the plaintiff, and the substituted trustee and the testator's collateral kin were the defendants. Diverse citizenship was the sole basis of the District Court's jurisdiction. The object of the suit was to obtain a construction of the will, to have that construction made binding on the trustee, and to establish the son's ownership, subject to the trust, of all the property as against the collateral kin. The proceedings and the decree are shown in McClelland v. Rose, 208 Fed. 503, 125 C. C. A. 505, 222 Fed. 67, 137 C. C. A. 519, and 247 Fed. 721, 159 C. C. A. 579, Ann. Cas. 1918C, 341, and Rose v. McClelland, 241 U. S. 668, 36 Sup. Ct. 552, 60 L. Ed. 1229. The decree determined that the trust was to continue for the natural life of the son; that the trustee was to hold the property, collect the rents, and make discretionary advances to the son during that period, and that the son was the true and sole owner, subject to the trust, of all the property. One paragraph of the decree read as follows:

'It is further ordered, adjudged, and decreed by the court that the said John K. Rose, as substitute trustee aforesaid, may, without further order of this court, make from time to time such advances to the said plaintiff, Peter McClelland, Jr., not to exceed the net revenues and income from the said estate, as he may think right and proper, but no portion of the corpus of the said estate shall be delivered to, or be surrendered over during the lifetime of the plaintiff to the said plaintiff, or his vendees, except upon the further order of this court; and this court hereby retains jurisdiction of this cause to the end that it may, from time to time as occasion may require, exercise its power of direction and control over said trustee in this respect.'

The persons who sought to intervene were creditors of the son and were citizens of Texas. They had brought an action on their claim in the state court for McLennan county, had caused a writ of attachment to be issued in that action and levied on part of the real property in the possession of the trustee, and had prosecuted the action to a judgment directing that the son's interest in the attached property be sold to satisfy their claim. The son had not been served with process in that action, nor had he appeared therein; so the judgment had no force save such as may have arisen from the attachment. Afterwards, in a suit by the trustee against the attaching creditors and the sheriff, the same state court granted a permanent injunction against a sale under the judgment the grounds assigned for granting the injunction being that the son's interest in the property could not be sold to pay his debts while he was living, and that the trustee was entitled to prevent such a sale in the son's lifetime, even though there was no purpose to disturb the trustee's possession or the administration of the trust. On an appeal to the Court of Civil Appeals that decision was affirmed, Hoffman v. Rose, 217 S. W. 424, and an application for a further review was denied by the Supreme Court of the state.

It was after these proceedings that the creditors sought to intervene in the suit in the District Court. They set forth in their proffered bill all that was done in the state court, including the attachment and judgment and the subsequent injunction, and also alleged that by the attachment and judgment they had acquired a lien on the attached property which was in no way avoided or affected by the injunction;...