Thompson v. First Nat. Bank

• Decision Date: 09 January 1905
• Citation: 37 So. 645,85 Miss. 261
• Court: Mississippi Supreme Court
• Parties: JOHN HARVEY THOMPSON, TRUSTEE, v. FIRST NATIONAL BANK

37 So. 645

85 Miss. 261

JOHN HARVEY THOMPSON, TRUSTEE, v. FIRST NATIONAL BANK

Supreme Court of Mississippi

January 9, 1905

FROM the chancery court of, first district, Hinds county, HON ROBERT B. MAYES, Chancellor.

Thompson the appellant, suing as trustee in bankruptcy, was the complainant, and the First National Bank, appellee, defendant in the court below. From a decree in defendant's favor the complainant appealed to the supreme court. The opinion sufficiently states the facts. [The case was heretofore in the supreme court, and is reported--Thompson v. First National Bank, 84 Miss. 54.]

Decree reversed and cause remanded.

Watkins & Easterling, and Brame & Brame, for appellant.

Was the representative character of Thompson, trustee of the estate of R. S. Barman, bankrupt, put in issue by the pleadings in this case? It is denied in the answer that Thompson is the trustee of the estate of R. S. Barman, but the answer is not sworn to. The oath of Carter, president of the bank, is confined to the matters of discovery contained in his answer.

The representative capacity of Thompson, trustee, was admitted his character not having been denied under oath, as provided in § 1797, Code 1892; and to that end we invite the court to a review of the decisions of this tribunal upon that statute, a statute which appears to have been in our code in more or less varied forms for nearly three-quarters of a century. Woolen Mills v. Rollins, 75 Miss. 253; Reed v. Railroad Co., 4 How., (Miss.), 262; Vicksburg, etc., Co. v. Washington, 9 Smed. & M., 536; Hemphill v. Bank of Alabama, 6 Smed. & M., 48; Moore v. Anderson, 3 Smed. & M., 324; Beard v Griffin, 10 Smed. & M., 589; Anderson v. Leyland, 46 Miss. 295; Hope v. Hurt, 59 Miss. 178; Moore v. Knox, 46 Miss. 602; Railroad Co. v. Anderson, 51 Miss. 830.

We have now given the court every case in our books bearing upon this statute, and we give the following as being in our judgment the law arising from the statute and the adjudications thereunder: That a bill to which a single answer of denial is filed puts in issue every right of the complainant to recover except his representative capacity; and if this would be put in issue, his representative capacity must be denied under oath. It is true that the complainant must have title, but if he sues in a representative capacity, and the only thing which the court finds which would prevent his title in such capacity from being perfect is some defect in his qualification of appointment to such capacity, then he is vested with title unless his representative capacity is denied under oath. In other words, the crucial test is this: Does the complainant's failure to get title result from a failure on his part to do all those acts or have done all those acts necessary to clothe him with his representative capacity? If that is true, and his representative capacity is not denied under oath, it is then admitted; and that being the only thing which prevents him from becoming vested with title to the chose in action (that being admitted), it follows as a matter of course that he did acquire title to the asset in question.

The appellees, however, recognizing that the chancellor's opinion in holding that the answer was sworn to for all purposes is perfectly untenable, have completely abandoned it, and now say that, the whole record being before the chancellor, if it appeared from the whole record that Thompson was not the trustee, then Thompson got no title to the chose in action in question. Now let us examine that just a minute.

Thompson was either the trustee or he was not the trustee of the estate of R. S. Barman. If he was trustee, of necessity there had been a valid adjudication, and all steps preceding his appointment were valid. In other words, the admission of his representative capacity carried with it the admission of all steps leading to his qualification as such trustee. If he was the trustee and is the trustee, he is clothed with title to the assets and is entitled to bring the suit, and, under the chancellor's opinion, is entitled to recover.

We respectfully submit that the chancellor having decided that Thompson, trustee, would have been entitled to recover had he been properly appointed trustee, and it being admitted that he was the trustee, the chancellor was wrong in dismissing the bill, although without prejudice, and, being wrong upon that point, this court should enter a decree for the complainant.

Green & Green, for appellee.

There was no jurisdiction in the district court of the United States to adjudge Barman an involuntary bankrupt, and the attempt so to do was void.

Under the uniform rule there must be jurisdiction in the court to render the judgment; it must have jurisdiction of the person and the thing. We admit that this court had ample powers in bankruptcy in a proper case, but before it could exercise the same, it was essential to acquire jurisdiction over the person of the alleged bankrupt, and until and unless it did, its adjudications were void, and could be disregarded at pleasure whenever and wherever they came into question. Whitney v. Bank, 71 Miss. 1017; Davis v. Cass, 72 Miss. 985; Swain v. Gilder, 61 Miss. 667; Stampley v. King, 51 Miss. 728.

It was contended that because this was the judgment of the federal court it could not be attacked collaterally. This arises from a misconception of our position. There is no difference arising from the fact that the judgment was in the federal court. There is neither kind nor degrees in voidness; they are all on a par; one is as void as the other; and the mere fact that this is a void federal court judgment confers no special rights on those claiming under it. All such bind no one, and are conclusive of nothing. This very question was made in the case of McPike v. Wells, 54 Miss. 136, and there conclusively settled in favor of the appellee.

Admitting that there was error in the decree of the chancellor in holding that Thompson had no title, still on the merits the right result was reached, and the decree should be affirmed, as the whole case is now before this court.

As held in Adams v. R. R. Co., 81 Miss. 90: "On appeal the appellant is restricted to an examination of the errors contained in the assignment of errors. No such restriction rests on the appellee, the distinction being between a party seeking to reverse a judgment and a party resisting the attempt." See also Thompson v. Bank, 84 Miss. 54 (S.C., 36 South. Rep., 65).

Under the law of this case it was essential for the appellant to show, by a preponderance of the evidence, that the transfer complained of was made by Barman with intent to give the bank a preference over the other creditors of the same class, and that the bank had reasonable cause to believe it was given with such intent, and that Barman was insolvent, and that the amount that the bank received was a greater per cent than that which the other creditors in the same class would have received. The appellant failed to make this proof: (1) No proof that Carter, who conducted this whole transaction, had any reasonable cause to believe that a preference was intended to be given. (2) There was no preference in that there was no proof that the makers of the firm note were insolvent and that their creditors would not receive the same amount as other creditors in the same class with the bank.

OPINION

MAYES, S. J.^[*]

This case was heard in the chancery court on the pleadings and the evidence. In the course of the trial the bank, the defendant below, offered in evidence the files of the United States district court in the matter of the bankruptcy of R. S Barman for the purpose of showing that, because of certain defects in that proceeding, the complainant was not in fact trustee of Barman's estate, his appointment...