126 N.Y.S. 497 | N.Y. App. Div. | 1910
Lead Opinion
On a former appeal in this case a judgment entered upon a dismissal of the complaint at the close of the plaintiff’s evidence was reversed (124 App. Div. 854). The present appeal is from a judgment for the defendant entered upon a verdict directed by the court upon motions made by both parties at the close of the case.
The important question in the case is whether this defendant was entitled to notice of the so-called “cross complaint” or “cross bill” of Ledbetter, as receiver, and, of course, that depends upon the law of the jurisdiction in which the judgment was rendered. On the formei trial the plaintiff put in evidence the opinions in certain reported cases of the State of Arkansas, the quotations from which in the opinion of Mr. Justice Clarke certainly supported the con» elusion that service of process was unnecessary to confer jurisdiction upon • the court to render a personal judgment against this
On the trial now being reviewed it was stipulated that any Arkansas or Indian- Territory case might be cited without printing it in the record. The defendant, called an expert, who testified that the-so-called “cross bill” or “cross complaint” was in the nature of an original bill, and that, in the absence of an appearance, service of process was necessary to confer jurisdiction on the court to render a personal judgment; and he supported that opinion by citation of authority, to which I shall presently refer.
It is, of course, conceded that the document under which this plaintiff procured the judgment in suit was not provided for by the statutes of the State of Arkansas. (Vide Mansfield’s Digest, § 5022 et seq.) But it is claimed that the filing of a “ cross bill ” was permissible under the equity practice in the- State of Arkansas, and that is undoubtedly so. Much difficulty will be encountered in determining precisely wliat a “ cross bill ” is. The tendency in the Federal courts is -to consider “ true cross bills ” ..as defensive only, in which new and distinct matter may not. be embraced. (Bowker v. United States, 186 U. S. 135.) But the extent to which matter not connected with the original cause of action may be brought in controversy by a'“ cross bill ” or “ cross complaint”- appears to vary in different jurisdictions and to be almost a matter of discretion. Wherefore the distinction betwen a “ true cross bill ” and one in the nature of an “ original bill” has" often been overlooked with the
While, of course, the question whether a “ cross bill ” is germane to the original bill is not jurisdictional and an error in deciding it can be corrected only on appeal, the question as to the necessity of service of process is jurisdictional. Upon that question we have the uncontradicted testimony of the expert, which is supported by a decision squarely in point. (Lowenstein v. Glidewell, 5 Dillon, 325.) In that case the plaintiff tiled a bill to foreclose a deed of trust making one Partee and wife defendants. They answered, alleging that they were the owners in fee of the property and also filed a “ cross bill ” praying for the cancellation of the plaintiff’s deed of trust. Ho process was issued thereon, and the, question was whether the plaintiffs could dismiss their bill and whether the defendants were entitled to a decree pro oonfesso on their cross bill.” It was held that the bill and “ cross bill ” did not constitute one suit and that.a service of subpoena on the defendants in the “ cross bill ” or their voluntary appearance was necessary. The opinion of Caldwell, J., in that case is a plain, concise and logical statement of the law applicable to this question. He shows that service of some sort is necessary in every case and points out the single case in which substituted service may be ordered by the court, i. e., when the “ cross bill ” is wholly or partially defensive in character and where,, because of the non-residence of the" plaintiff or his departure from the jurisdiction, substituted service may be necessary to prevent a failuré of justice.
Our attention has riot been called to any case overruling that case or tending to weaken its authority.
In a nutshell the case is this.: Merchants in Hew York send bills for collection to a firm of attorneys in the Indian Territory.; the debtor makes a general assignment for "the benefit of creditors to One of said attorneys ; the other attorney brings an action .oñ behalf of the creditors to enjoin his partner from acting as assignee on the ground that" the law applicable to assignments will compel him to
The facts presented to the court on the former appeal brought the case within Laing v. Rigney (160 U. S. 531). That case ■involved the jurisdiction of the Court of Chancery in blew Jersey to render a decree of divorce on a supplemental bill which was not served within the State. The only evidence bearing on the question of the blew Jersey Jaw, aside from the decree itself, was the testimony of an expert hot supported by any reference to statutes or decisions, and the court held' that the decree itself, in the absence of any statute or. decision of . the court to the contrary, was the best evidence of the. law of blew Jersey. In that case the decree recited service without the State. In this case the judgment contains this recital: “* * * And,it appearing to the Court, that the'said K. Mandell has been personally served with a copy of the original cross bill of-the said W. A. Ledbetter, and has had ample time and notice to appear and make answer unto the same,' • and, has failed to do so., * * *” The undisputed evidence now shows that recital to be false. Thus it appears that the plaintiff not only undertook to get a judgment, against his client on allega
It is unnecessary to determine what kind of a document the so-called “ cross hill ” is. Of course it had no relation whatever to any issue which might he presented by answer to the original bill. While doubtless the original suit was not terminated until a final judgment, the purpose of it was accomplished when the interlocutory order or decree was entered. It matters not whether that be called an order or a judgment. It granted the only relief prayed for. It is difficult to understand what reason the client of Messrs. Ledbetter & Bledsoe could have had for even suspecting that two years later a “ cross bill ” might be filed, of which he would" be bound to take notice. The “ cross bill ” was manifestly an original bill, wholly unconnected with the subject-matter of the original bill and based upon matters arising subsequent thereto. It was filed by Ledbetter, receiver, who was not a party to the suit, but who in another capacity, i. e., as assignee, had been for more than two years in default.
Of course, in a sense, the proceeding instituted by Ledbetter, receiver, was connected with the administration of the estate, which had been brought into court on the defendant’s -motion, and I assume that it could have been instituted by petition; but it was a proceeding in personam, not in rem, and was as original in its nature as though it had been an action against a debtor to collect a claim owing the estate, and virtually that is what it was.
For the foregoing reasons and for those well stated by the learned trial justice on granting the defendant’s motion, I am of the - opinion that the judgment is right and should be affirmed.
Laughlin and Dowling, JJ., concurred; Ingraham, P. J., and McLaughlin, J., dissented.
Dissenting Opinion
(dissenting):
' Upon the former appeal from the judgment in favor of the defendant the nature of this action and the legal proceedings applied were examined and determined (124 App. Div. 854). I do not think that the record is substantially different from that presented upon the former appeal,.and if that appeal was correctly decided, it seems
The action was commenced by creditors of a firm of Munzesheimer & Daube, a copartnership doing business in the Indian Territory, as then constituted, who had made an assignment for the benefit of creditors, to set. aside the assignment, and to have the property of the copartnership administered by the court for the benefit of the creditors of the assignors. The defendant in this action was one of the plaintiffs in that action, and joined with other creditors in asking the court to set aside the assignment, take possession of .the property assigned and distribute it' according to law among the creditors of the assignor. The plaintiffs in that action appeared by three attorneys, S. T. Bledsoe, Crawford & Crawford and. Potter & Potter, and the bill of complaint in. equity, was verified by Bledsoe, one of the attorneys who, in his affidavit of verification, stated that he was attorney for all the creditors named as the plaintiffs, except. H. B. Claflin Company. Upon filing this complaint, the assignors and assignee, who were parties defendant, appeared in the action and substantially admitted the allegations of the complaint. Whereupon, on the application of the plaintiffs in that action, including the defendant in this action, the court, on December 8, 1896, entered an interlocutory order or judgment appointing one W. A. Ledbetter, who had been the assignee of the property of the debtors, receiver of all of the assigned property conveyed to him as such assignee. This interlocutory order or judgment directed the receiver.to take possession of the property of the debtors for the benefit of the creditors named in the deed of - assignment, to reduce the same to possession, to sell the stock of merchandise transferred and conveyed to him as assignee, to sell the real estate conveyed to him by the deed of assignment, and to collect all the notes, accounts, dioses in action and evidences of debt; and
This decree recites the service upon the defendant Mandell of a copy of the cross bill. Bledsoe, Mandell’s attorney in the action, and who had-appeared for him and instituted the suit,on his behalf, was before the court and was heard upon the granting of this decree. Service upon him as attorney for Mandell would have been proper service to bring Mandell before the court, for the action had never been finally determined. Ho final decree, so far as appears, had ever been entered. The court was still engaged in administering the estate. We must assume that the court had jurisdiction of the subject-matter of the action; that it had under its general equity powers intervened for the protection of the plaintiffs
Upon these facts being presented to the court by its receiver, it seems to me that the court had complete jurisdiction to decree the repayment by a party to the action of a sum of money which he had received from the receivers in excess of what he was entitled to, and -that notice-to or the appearance of the attorney who had appeared for such party in the action was sufficient notice to the defendant and-made the order or judgment, whatever it may be called, binding upon the defendant. E.very fact, it seems to me, existed which was necessary to give the court jurisdiction. The plaintiff in the action then before the court appeared by an attorney asking for the intervention of the court to endeavor to procure for him payment of. his claim against those assignors who resided in the jurisdiction in which the court was administering justice. The intervention of the court by which it had undertaken to administer the estate of the assignors, the receipt by an officer of.- the court of the property of the assignors for distribution among its Creditors, the payment of a portion of the money by the officer of the court to one of the plaintiffs in the action before the court to which that plaintiff was not entitled,, the appearance before the court of the attorney who had appeared for the plaintiff, and a final determination by the court that th'e plaintiff who had received a sum of money from its receiver should repay that money to the receiver, and a formal.legal judgment to that effect, duly entered, bound a.
It is suggested that Bledsoe, this present defendant’s attorney, did not properly protect his client’s interest and apparently intervened individually so as to be protécted as against his client in any judgment that the court might render in relation to the proceeding; but if that is so, this defendant has a remedy against his attorney who failed to protect him. It cannot affect the jurisdiction of the court who had the parties and their attorneys before it and who was required to prevent a misapplication of the funds in court which were applicable to the payment of certain claims presented to the court and which the court was engaged in administering.
I think, therefore, that this judgment, until reversed or vacated, was an adjudication which bound the. defendant, and the - courts of this State are bound to enforce it. .
I think that the judgment should' be reversed.
McLaughlin, J., concurred.
Judgment affirmed, with costs.