Yazoo Co v. City of Clarksdale, 15

• Decision Date: 07 November 1921
• Docket Number: No. 15,15
• Citation: 42 S.Ct. 27,257 U.S. 10,66 L.Ed. 104
• Parties: YAZOO & M. V. R. CO. et al. v. CITY OF CLARKSDALE
• Court: U.S. Supreme Court

257 U.S. 10

42 S.Ct. 27

66 L.Ed. 104

YAZOO & M. V. R. CO. et al.

v CITY OF CLARKSDALE.

No. 15.

Argued Oct. 6, 1921.

Decided Nov. 7, 1921.

Messrs. H. D. Minor and Charles N. Burch, both of Memphis, Tenn., and Blewett Lee, of New York City, for plaintiffs in error.

Mr. Gerald FitzGerald, of Clarksdale, Miss., for defendant in error.

[Argument of Counsel from pages 12-14 intentionally omitted] Mr. Chief Justice TAFT delivered the opinion of the Court.

This is a controversy over the ownership of 250 shares of the stock of the Louisville, New Orleans & Texas Railway Company, a corporation of Mississippi. The city of Clarksdale acquired the stock in 1891, in consideration of $25,000 of bonds issued by it to aid in the construction of a new branch of the Railway Company in which it was interested. The certificate for the stock the city left in the custody of a Clarksdale bank. The Louisville, New Orleans & Texas Railway Company in 1892 was merged by consolidation in the Yazoo & Mississippi Valley Railroad Company. In 1897, the Pacific Improvement Company, a bondholder, recovered against the city in the United States Circuit Court for the Northern District of Mississippi a judgment for unpaid interest on the bonds amounting to $3,058.13. Execution issued to the marshal who levied on, and took possession of, the stock certificate in the Clarksdale bank and at public sale sold the certificate and shares to the judgment creditor for $100, which was credited on the judgment. In 1898, the city made a compromise with the bondholders, by which, for payment of the principal of the bonds in cash, the bondholders released all claim of interest and transferred the unsatisfied judgment. No mention was made of the stock in this settlement. In 1904, the Pacific Improvement Company for $2,770 sold the stock to the Mississippi Valley Company, an investment company, and transferred the certificate to that company. The value of the stock, which was little or nothing at the time of the judgment and the compromise, has greatly enhanced and is averred to be $75,000.

By its bill in equity in the state chancery court, the city sought to compel the Yazoo & Mississippi Valley Railroad Company to recognize the city's ownership of this stock and to issue to it stock of the consolidated company in lieu thereof, in accordance with the terms of the merger. The Mississippi Valley Company after the answer to the bill revealed its ownership of the stock, was made a defendant and the real contest became one between the city and that company.

In the pleadings and at the hearing the city attacked the marshal's sale as void under the statutes of Mississippi, and relied on the duty of the United States courts under federal statutes to conform their executions and sales to the laws of the state in which they are held. The state chancery court declared the sale void and granted the relief asked by the city. The state Supreme Court affirmed the decree. No opinion was filed in either court.

We are met by a preliminary question of jurisdiction. The case was first brought here by writ of error to the state Supreme Court. Then within due time, a petition for a certiorari was also presented, and consideration of the latter was postponed until the hearing on the writ of error. Under which writ can the case be reviewed here? The Mississippi Valley Company relied below, and here insists, on a title acquired under an execution sale of a United States marshal. This is a title claimed under an authority of the United States. Under section 237 of the Judicial Code as amended by Act of September 6, 1916, chapter 448, 39 Stat. 26 (Comp. St. § 1214), if the validity of an authority exercised under the United States is drawn in question and the decision is against its validity, review is by writ of error. If only a title claimed under an exercise of such an authority is in dispute, then certiorari is the proper writ. The authority of the United States marshal to make sales upon judgments in the United States courts and to give title thereby is not drawn in question in this case. What is denied here is the regularity of the marshal's attempted exercise of his conceded authority and the validity of the resulting title. Hence, the only way of reviewing this cause is by certiorari. Dana v. Dana, 250 U. S. 220, 39 Sup. Ct. 449, 63 L. Ed. 947; Philadelphia & Reading Coal & Iron Co. v. Gilbert, 245 U. S. 162, 38 Sup. Ct. 58, 62 L. Ed. 221; Avery v. Popper, 179 U. S. 305, 314, 21 Sup. Ct. 94, 45 L. Ed. 203. The writ of error is dismissed, the petition for certiorari is granted, and we now proceed to dispose of the case on the latter writ.

The validity of the judgment upon which the execution issued is conceded. The questions to be decided arise on the levy and sale. On the 1st day of June, 1897, a fieri facias issued. This writ the marshal executed and made the following return on it:

'Executed the within writ this the 13th day of Aug. 1897 by levying on and taking into my possession one certificate of stock, the property of said defendant, in the Louisville, New Orleans & Texas R. R., No. 147, for 250 shares, issued to the town or city of Clarksdale, Miss. Further executed on this the 6th day of Dec., 1897, at 12 o'clock meridian by selling said certificate of stock No. 147 after due advertisement by posting notices in three public places for the period of 10 days as provided by law, to the highest and best bidder for cash, before the western door of the United States courthouse and post office building in the town of Oxford, Miss., at which sale the Pacific Improvement Company became the highest and best bidder, at and for the price of $100, and at the same time and place I executed the writ of vendi exponas issued to me in this cause and offered for sale all the interest which the city or town of Clarksdale had in the capital stock of the Louisville, New Orleans & Texas Railway Co. or in the Yazoo & Mississippi Valley Railroad Company, offering said interest at the same time with said certificate of stock to the said Pacific Improvement, for the said sum of $100, that being the highest and best bid offered for same.

'Dec. 6th, 1897.

'[Signed] A. J. Cooke, U. S. Marshal.'

On the back of the certificate the marshal inscribed the following:

'Pacific Improvement Company v. City or Town of Clarksdale, Mississippi. No. 3900 Law. In the Circuit Court of the United States for the Western District of the Northern District of Mississippi. By virtue of a writ of fieri facias issued in said cause, I levied upon certificate of stock on August 3, 1897, and thereon December 6, 1897, pursuant to said execution and to a certain writ of venditioni exponas, I in the manner provided by law sold this certificate of stock, all the interest of the city or town of Clarksdale in the stock of the Louisville, New Orleans & Texas Railway Company, to the Pacific Improvement Company. Witness my signature this the 6th day of December, 1897.

'A. J. Cooke, United States Marshal.'

Counsel for the city attack the sale chiefly on two grounds: First, that the levy was void because made on a mere muniment or indicium of title to the stock, the certificate, and not on the stock itself; and, second, that the sale was void because not made at the county courthouse, as required by the laws of Mississippi.

In applying the laws of Mississippi to the validity of this sale, we are governed by sections 914 and 916 of the Revised Statutes of the United States, as follows:

'Sec. 914. The practice, pleadings, and forms and modes of proceedings in civil causes, other than equity and admiralty causes, in the Circuit and District Courts, shall conform, as near as may be, to the practice, pleadings, and forms and modes of proceeding existing at the time in like causes in the courts of record of the state within which such Circuit or District Courts are held, any rule of court to the contrary notwithstanding.'

'Sec. 916. The party recovering a judgment in any common law cause in any Circuit or District Court, shall be entitled to similar remedies upon the same, by execution or otherwise, to reach the property of the judgment debtor, as are now provided in like causes by the laws of the state in which such court is held, or by any such laws hereafter enacted which may be adopted by general rules of such Circuit or District Courts; and such courts may, from time to time, by general rules, adopt such state laws as may hereafter be in force in such state in relation to remedies upon judgments, as aforesaid, by execution or otherwise.' Comp. St. §§ 1537, 1540.

Counsel for the petitioner also relies on the Act of March 3, 1893, chapter 225, 27 Stat. L. 751, which provides in its first section 'that all real estate or any interest in land sold under any order or decree of any United States court shall be sold at public sale at the courthouse of the county, parish, or city in which the property, or the greater part thereof, is located, or upon the premises, as the court rendering such order or decree of sale may direct' (Comp. St. § 1640), and in its second section 'that all personal property sold under any order or decree of any court of the United States shall be sold as provided in the first section of this act, unless in the opinion of the court rendering such order or decree, it would be best to sell it in some other manner' (Comp. St. § 1641).

We think that the language of this act limits its application to judicial sales made under order or decree of the court and requiring confirmation by the court for their validity, and that it does not extend to sales under common-law executions which issue by mere praecipe of the judgment creditor on the judgment without order of the court, and in which the levy and sale of the marshal are ministerial, do not need confirmation to give them effect, and only come under judicial supervision on complaint of either party. The sale in such a case depends for its validity...