48 F. 251 | U.S. Circuit Court for the District of Southern Alabama | 1891
The main object of the bill in this case is a discovery and to set aside alleged fraudulent conveyances. The bill-shows that some time in the year 1866 one Sheppard was appointed collector of the internal revenue in the state of Mississippi, and that he, with the defendant, Frederick Ingate, and others, as his sureties, executed nis official bond prescribed by law; that some time in the year 1869 said Sheppard committed a breach of his bond, and became a defaulter to the govern
There is a demurrer to the bill, and many grounds of demurrer assigned, but the first two grounds and the argument thereon present the only question necessary to he decided now, and that is, whether a suit of this kind can be maintained in the courts of the United States. This question involves an answer to two other questions: (1) Whether the United States, when they become a party to a suit in the courts, and voluntarily submit their rights to judicial determination, are bound by the same principles that govern individuals, — whether, as in this case, they must come into a court of equity like other suitors seeking relief; and (2) whether the United States, as shown by the bill, are simple contract creditors or creditors at large (for so they are indifferently termed) of the defendant, Frederick Ingate. If these questions ho decided in the affirmative, this cause is to be determined against the complainants on the authority of Scott v. Neely, 140 U. S. 106, 11 Sup. Ct. Rep. 712.
It is well settled that, “when the United States voluntarily appear in a court of justice, they, a.t the samo time, voluntarily submit to the law, and place themselves upon an equalitv with other litigants.” U. S. v. Beebee, 17 Fed. Rep. 40; U. S. v. Barker, 12 Wheat. 559; Mitchel v. U. S., 9 Pet. 743; Brent v. U. S., 10 Pet. 615. “The principles which govern inquiries as to the conduct of individuals in respect to their contracts are equally applicable where the United States are a party.” U. S. v. Smith, 94 U. S. 217. In Brent v. Bank, 10 Pet. 615, the court declares that there is no reason why the United States should be exempted from a fundamental rule of equity subject to which their courts administer their remedy. In 18 Fed. Rep. 278, in the case of U. S. v. Coal, etc., Co., the court says:
“It is true, as a general proposition, that when the government becomes a party to a suit in its own courts, it stands upon the same footing with individuals, and must submit to the law as it is administered between man and man. But this general rule has its limitations, in that neither the defense of tiie statute of limitations nor that of laches can be pleaded against the United States. ”
These authorities, it seems to me, answer the first question wc have been considering in the affirmative.
2. Are the complainants simple contract creditors or creditors at large? One who has a right, claim, or demand founded on contract, whether
But it is conceded by> the United States attorney that complainants are contract creditors, or creditors at large. See his brief and argument. In the case of Scott v. Neely, supra, the supreme court say:
“In all eases where a court of equity interferes to aid the enforcement of a remedy at law, there must be an acknowledged debt, or one established by a judgment rendered, accompanied by a right to the appropriation of the property of the debtor for its payment; or, to speak with greater accuracy, there must be, in addition to such acknowledged or established debt, an interest in the property or a lien thereon created by contract or by some legal proceeding. ”
See, also, Fost. Fed. Pr. pp. 15, 18; Welser v. Seligman, 13 Fed. Rep. 415; Claflin v. McDermott, 12 Fed. Rep. 375.
It appears that there has been no judgment rendered against defendant, Frederick Ingate, to establish a debt on the demand arising out of the alleged default on Sheppard’s bond. Hone is averred in the bill, and there is no averment of an acknowledged debt, accompanied by a light to the appropriation of the property of said defendant for its payment. There is no averment of an acknowledged or established debt with an interest in said property, or a lien thereon created by contract, or by any distinct legal proceeding. Hone is claimed in the bill, and none can be claimed on the averments of the bill. There is a suggestion in the bill that a judgment was rendered in the district court of the United States for the northern district of Mississippi against said Sheppard some time in June, 1873, ascertaining and determining his delinquency. But it does not appear that said Frederick Ingate was a party to said judgment, or is in any wise bound by it. Any such judgment, however, would have no force and operation here, except, perhaps, for the purposes of evidence. Claflin v. McDermott, 12 Fed. Rep. 375; Welser v. Seligman, 13 Fed. Rep. 415.
I have found no statute of the United States, and none has been called to my attention, creating a lien on the property of a collector of internal revenue and of his sureties from the execution of his official bond or from the date of any default thereon. There are statutes giving extraordinary and summary remedies for collecting any debt or claim that might arise 'from such default, and the courts say that necessity has forced a distinction between such claims and others, and it is for this reason that these extraordinary remedies have been provided. The contention of the
The United States attorney, on the argument in this cause, presents to the court a motion for a summary judgment against the defendant, Frederick Ingate, and insists that it is the duty of the court to grant judgment against him upon such motion, and invokes section 957, Rev. St., to sustain him in this contention. That section, in substance, provides that; when suit is brought against any delinquent for public money, judgment may be granted at the return-term on motion. That section can have no application to a suit like that now before the court. The suit contemplated by the statute is such suit as may bo properly brought against any delinquent for public money, whether it be a suit on his bond, or for a balance found duo on an adjustment of his accounts with the proper officers of the treasury department. If it is a suit on the bond, it would be an action of debt, and, if a suit for a balance found due on an adjustment of bis accounts, it would he an action of assumj/sit. In either case, it would be an action at law, and could be brought only on the law side of the court. “Under the statute of the United States, an entire separation of proceedings at law from those for equitable relief is required in the federal courts.” Scott v. Neely, supra. But it is apparent by the bill in this case that the complainants are pursuing a remedy