Halsted v. Forest Hill Co.

JACKSON, District Judge.

This case is now being beard upon tbe petition of Jobu Halsted, tbe plaintiff, for a rebearing, claiming that certain rents and royalties which had accrued while tbe property was in tbe bands of a receiver of this court bad not been paid and allowed to him, amounting to §2,300. Upon tbe 23d day of December, 1897, a final decree was passed, affirming a very exhaustive report of tbe master, and settling all the questions iuvolved in the case, from which no appeal was taken, nor was it intimated to tbe court that the parties in tbe case desired to take tbe case to the appellate court. On tbe 6th day of October, 1898,- — nearly a year after tbe entry of this final decree, — the plaintiff filed bis petition, claiming that there were certain rents and royalties which bad not been paid to him by tbe receiver. On tbe 11th day of January, 1899, tbe question arising upon this petition was argued by counsel, and decided by tbe court, and a decree was entered dismissing the petition; the court holding that the decree of December 23, 1897, was a final decree, and that it bad no power then to reopen it. On tbe ICtb day of January, 1899, Halsted filed another petition, accompanied with an affidavit, asking tbe court to- set aside tbe last order, by which his former petition bad been dismissed, and on tbe 10th day of May, 1899, tbe receiver filed bis petition, stating that tbe claim of Halsted, set up in bis petition, bad not been paid, and asking that it be allowed and paid. Upon these last two petitions, tbe court is again asked to disturb its decree, and open it up, and set it aside, after the decree has stood for over a year; two terms of the court having transpired before any steps were taken by the petitioners in regard to it. Tbe application for a rehearing is made under equity rule 88, and that rule provides that:

“No rehearing shall he granted after the term at- which the final decree of the court shall have been entered and recorded, If an appeal lies to the supreme court; hut if no appeal lies, the petition may he admitted at any time before the ending oí the next term oí the court, in the discretion of the court.”

The decree in this case passed tbe 23d day of December, 1807, disposed of all tbe questions that arose upon the pleadings, and made a final distribution of tbe assets of the Forest Hill Company. There is no contention that an appeal did not lie from the decree at tbe time it was rendered. In fact, it was conceded that tbe decree was' final, and disposed of all the claims arising in the cáse. For this reason the court declined, upon the hearing of the first petition, to reopen the decree. The last petition by Halsted was filed on the 16th day of January, 1899, and the receiver, George W. Patton, filed his petition on the 10th day of May, 1899. In the view Í take of this case, even if this was not a final decree, from which an appeal could be taken (two courts having intervened, since the decide was entered, before the filing of the last two petitions), it is too late, under rule 88, now to consider them. The only question left for the court to determine is whether this decree is a final one.

It was held in the case of Hoffman v. Knox, 1 C. C. A. 535, 50 Fed. 484, that a decree fixing the priority of claims against an insolvent corporation, directing the sale of its property for their payment, is a. final decree, within equity rule 88, relative to rehearings. Mr. Chief Justice Fuller delivered the opinion of the court. The case we have under consideration falls within the ruling held by the chief justice in that case. Here is a final decree which confirms the master’s report, fixing the priority of the claims against the defendant company, which was insolvent, and directing their payment. The realty in this case was in no wise involved, except the leasehold interest which the plaintiff had granted to the defendant company; but as there was no prayer in the bill for the sale of the leasehold, but simply a prayer invoking the power of this court to require the defendants to adjust and settle with the plaintiff his claim set up in the bill, there was no occasion for any decree of sale of the leasehold. But the court, in confirming the commissioner’s report, passed a decree which directed the distribution of $9,468.25 as assets of this insolvent company. In the case of French v. Shoemaker, 12 Wall. 86, 20 L. Ed. 270, it was held that a decree was final which settles all the rights of the parties involved in the pleadings. In this case the rights of all the parties w.ere settled as they were presented in the pleadings. The question that arises upon this petition was not before the court, nor was the attention of the court called to it. The claim of the plaintiff that the receiver owes him $2,300 for uncollected rents was not presented or proved before the master, nor was it presented to the court at the time the court passed upon the exceptions to the master’s report. Ho allusion whatever was made to it in the master’s report, though the plaintiff was before the master, and presented his claims against the defendant company, which were passed upon by the master in his report. Can it be said, where a case has been referred to a master, his report made up, and returned to the court, and exceptions filed to the report, and passed upon, and a decree passed affirming the master’s report, and' ordering a distribution of the fund, that it is not final? I think not. If it is final, and the time has elapsed when a motion for a rehearing can be entertained by the court under rule 88, the court must reach the conclusion that it is too late'to entertain the petition under that rule. It is a well-established rule of law that, after the term has ended, all final judgments and decrees of the court pass beyond its control, unless motions should be made to modify or correct the decree during the term of the court at which the-decree is entered. In the case of Brooks v. Railroad Co., 102 U. S. 107, 26 L. Ed. 91, it was held that “a petition for a rehearing cannot he hied after the term at which the judgment was rendered.” This opinion was delivered by Mr. Chief Justice Waite, for the court, and he cites a, number of authorities to sustain his position. In the case of Central Trust Co. v. Grant Locomotive Works, 135 U. S. 224, 10 Sup. Ct. 736, 34 L. Ed. 97, the court holds that, where a decree is final, the court could not vacate it, by its own motion, atún* the close of the term, and cites McMicken v. Perin, 18 How. 507, 15 L. Ed. 504. In the case of Roemer v. Simon, 91 U. S. 149, 23 L. Ed. 267, it is held that a court which hears and disposes of a case “can grant a rehearing during the term at which the final decree was rendered, but not thereafter.” Without further discussing the right of a party to file his petition for a rehearing after the term has elapsed at which the decree was rendered, I reach the conclusion that the circuit courts of the United States have no power to set aside their decrees in equity after the term at which they were rendered. when an apeal lies to the appellate court. This question has been so frequently before the supreme court of the United Btal.es, and it has been so universally settled that a court has no such power after the term has passed, that it would seem to he useless to cite all the eases that are to be found in the reports of the United States to susta in this position.

But it is claimed that the court should consider this petition in the nature and character of a hill of review. The first answer to this position is that it is a well-settled principle that a bill of review will not lie after the time for taking an appeal has passed. Thomas v. Brockenbrough, 10 Wheat. 146, 6 L. Ed. 287; Shelton v. Van Kleeck, 106 U. S. 532, 1 Sup. Ct. 491, 27 L. Ed. 269; Central Trust Co. v. Grant Locomotive Works, 135 U. S. 207-224, 10 Sup. Ct. 736, 34 L. Ed. 97. In this case, as we have seen, the time for an appeal had passed before the filing of the petitions. This would seem to dispose of the right to file the petition as a bill of review. But, if this were not so, a hill of review could only he entertained on two grounds-First, for mistakes apparent upon the face of the record; second, for after-discovered evidence. This principle has been settled so oil en by the highest courts of the country that it would hardly seem necessary to cite authority to sustain it. In the case of Nickle v. Stewart, 111 U. S. 776, 4 Sup. Ct. 700, 28 L. Ed. 599, in a very short opinion delivered by Mr. Chief Justice Waite, the court held that, a hill of review ‘•'showing no errors of law on the face of the record, and not alleging a discovery of new matter since the rendering of the decree, the court below properly refused leave to file it.” In the case under consideration there is no mótense that there was error apparent upon the face of the record, ¡cider the pleadings in the cause, nor does it allege the discovery M new evidence since,the rendering of the decree. The only ground se' up one of laches; that is, that the plaintiff in this action neglect'd ío ¡m odín » and set up his claim for $2,300 rent, which was roya1; B wlnli. the p.v nerty was in the hands of the receiver, and also ■’( -neglect upon ' n.» part of I he receiver to make a report of the sane, »uu lay it^bohvi. M < master who passed upon this case. This rgejni (,,r omission on „ +• ij,e plaintiff was Ms own neglect. It was Ms duty to present all the claims that he had against the defendant company before the master, and to prove the same. After he neglected or omitted to do so, it is too late for the court to rectify an omission of that character after the rights of other parties had been adjudicated and settled by the decree. He would have just as much right to come before the court after all the funds had been distributed as he has now. It is true that there are funds in the registry of the court which the petitioners claim are under the control of the court. But it is a mistake to suppose the funds are under the control of the court. They have long since been appropriated and directed to be paid by the decree of the court to the creditors as ascertained by the master’s report in this cause, and in the opinion of the court it would be error for it now to interfere with that decree. The fact that these funds had not been paid out, by reason of some disagreement between counsel as to the costs. of the case (the clerk having been notified not to do so until that difficulty was settled), does not of itself confer jurisdiction upon the court to change or alter a decree which has passed beyond its control, and make a new distribution of this fund. The court has no power to alter or change a decree except under the rules governing a court of equity as prescribed by the supreme court for its action; and, as we have seen, the petition has been presented too late for the consideration of the court in that respect. In the case of Central Trust Co. v. Grant Locomotive Works, supra, the court, in delivering its opinion, referred to the case of Fosdick v. Schall, 99 U. S. 235, 25 L. Ed. 339, and used the following language: “There was a fund in court in that case, but in principle the orders here are the same;” and the court refused to interfere and disturb the decrees of the court, stating that no resistance upon the merits had been made, and no appeal from the decrees had been entered.

I regret that the matter is beyond the power of the court to consider this petition upon its merits, and to order another reference to the commissioner to report upon the validity of the claim that is set up by the plaintiff in this petition. Upon the petition filed by the receiver, I am of opinion that it was no part of Ms duty to lay the claim of the plaintiff before the commissioner. His duty was to manage and control the property as directed by the court under its decree. It does not appear that he was at any time charged with neglect or mismanagement of the property. The power conferred upon Mm required Mm to manage the property to the best interests of all concerned. He was “directed to take immediate charge of all the said-property, assets, books, papers, and accounts, wherever the same be found; to collect all indebtedness due the defendants on account of or growing out of said business, and to care for and preserve all the said property until the further order of this court.” In this respect he appears to have fully discharged his dn*-y. Ht did not, under the decree, represent the plaintiff any m^'fe than he.did the defendant company and its creditors. It was-' bo part of his duty to file before the commissioner the claim und-'er consideration. That was alone the duty of the plaintiff or kip’ counsel or agent. It was not done. I cannot relieve the plaintiff? because of his laches, either upon his own petition or that of the receiver, from the effect of the final decree in this canse. For the reasons assigned, the petition will be dismissed, without costs.

Case Details

Case Name: Halsted v. Forest Hill Co.

Court Name: U.S. Circuit Court for the District of West Virginia

Date Published: Jun 8, 1901

Citation: 1901 U.S. App. LEXIS 4820