French v. Shoemaker (79 U.S. 86)/Opinion of the Court

'This cause coming on to be heard upon the bill, answer, and replication, and upon the cross-bill, answer, and replication, and upon the proofs, and being maturely considered, the court is of opinion that the equity of the case is with the complainant in the original bill, and thereupon do order, adjudge, and decree that James S. French, the defendant in the original bill, be perpetually enjoined and restrained from any use of the name or title of the president of the Washington and Alexandria Railroad Company under any election to that office heretofore held, and from any action by himself or any attorney or agent to interfere with any proceeding for the reorganization of the said company under the contracts mentioned in said bill, and dated on the 6th of December, 1867, and from any proceeding whatever not in accordance with the said contracts, without prejudice, however, to the right of the said French to the stock assigned to him by said contract, or to assert any claim he may have against said company reorganized under said contract, or against the said Shoemaker, or against the Adams Express Company, not in contravention of the said contract, or to pursue by proper proceedings in law or equity any claim he may have in respect to the distribution of stock made in and by said contract, founded upon the failure of consideration or other cause.

'It is further ordered, adjudged, and decreed, that the said defendant, French, pay the costs in this cause, and leave is given to either party to apply at the foot of this decree for such further order as may be necessary to its due execution, or as may be required in relation to any matter not finally determined by it.'

From this decree an appeal to this court was immediately and within ten days asked for by French, and allowed by the Chief Justice, 'upon the defendant's giving bond with good and sufficient security in the sum of $500.' The bond, & c., was given.

In this state of things the bill and cross-bill in the equity suit, on which the decree has just above been given, having been, as the reader will have observed, a proceeding between French and Shoemaker alone, and the objection to the bill for want of proper parties taken and overruled, French began a suit in the Supreme Court of the District of Columbia against all the parties to the settlement contract except Shoemaker, for the purpose of setting aside the agreement. His bill being demurred to because Shoemaker was not a party, and the demurrer being sustained, Shoemaker was added.

Hereupon, on the application of Shoemaker to the Circuit Court of Virginia, that court ordered French to dismiss his bill in the District, and to stop proceedings under pain of imprisonment. He dismissed his bill.

It was in this state of things that the two motions mentioned at the opening of the report (on page 87), came before this court.

I. ON THE FIRST MOTION, to wit, that of Shoemaker, the appellee, to dismiss the appeal, it was argued:In support of the motion, that the decree was not final, because it had not touched the prayer for foreclosure of the mortgage for $5000, one important object of the bill.

Neither had it dismissed the cross-bill. Yet in Ayres v. Carver, a decree was held not final on dismissal of a cross-bill the original bill being left. This was but a converse of that case.

That the decree was not meant to be final was shown by the language of the decree, which anticipated further action of the court in matters not finally disposed of.

Contra, as respected this motion, it was said that the subject not disposed of, to wit, the mortgage for $5000, was distinct from that which formed the substance of the decree, and that, in fact, the bill was multifarious in joining these two separate claims. The decree completely disposed of one of them, and was final as to that. That was enough.

To what was said about the cross-bill not being dismissed, it was replied, that it had been in effect dismissed when on a cause declared to have been heard on bill and cross-bill, the equity was declared to have been with the complainant in the original bill.

The leave reserved was to apply on the foot of the decree, and plainly was meant for formal orders only. The Chief Justice, who made the decree with this reservation, allowed an appeal immediately; a proof that he did consider that he had made a final decree.

II. AS TO THE SECOND MOTION, for a supersedeas, or for any suitable order prohibiting the court below from proceeding, &c., it was argued-the parties reserving their position of parties moving-in favor of the appellant,

1. That while the merits of this case could not be fully considered on a motion, it was necessary to refer to the main points in the case in order to act on the motion. The agreement was not between French and Shoemaker alone, but was signed by five other persons, to wit: Lenox, Stevens, Phelps, Smith, and Brent. These persons were so interested in the contracts that they were necessary parties to the suit. Now the objection for want of parties had been distinctly made in the cross-bill, on the hearing in the Circuit Court below. The decree nevertheless went the full length of setting up the contracts, and enjoined French 'from any proceedings whatever not in accordance with' them. It was in effect an injunction against the Alexandria and Washington Railroad Company, which was no party to the record. And the effect of the order subsequently made, to stop proceedings in the court of the District, was to prevent the appellant from pursuing his remedy against the parties named, and to make the decree conclusive in their favor, although they were not parties to the proceeding in which it was rendered.

2. By the appeal taken and bond filed within ten days, the decree was suspended and the case removed to this court. No further proceedings as to that decree could be taken in the court below while the appeal was pending here. For any violation of the decree, the appellant was answerable to this court and not to the Circuit Court.

But, independently of the supersedeas thus claimed, this court had the right, under the 14th section of the Judiciary Act., 'to issue any writ necessary to render its appellate jurisdiction effectual.'

The order of the Circuit Court placed a construction on the decree previously made which was unreasonable. It was in fact equivalent to a new decree, inasmuch as it extended its operation not only beyond the parties to the cause, but beyond the terms of the decree itself. If a court could do this, pending an appeal; if it had the power to construe the decree and enforce it by process of contempt in doubtful cases, then it was evident that the inferior court might evade the appellate jurisdiction, and use the decree for purposes which this court would not sanction. This court should either prohibit such proceedings altogether or should examine them when they were alleged to have taken place, in order to prevent wrong and oppression, such as appeared in this case.

Contra. The appeal cannot operate as a supersedeas because of the insufficiency of the bond. The bond is in the penalty of $500. A writ of error or an appeal is not a supersedeas unless bond be given in a sum sufficient to secure the whole amount of the judgment or decree, in case of affirmance.

But if there is a supersedeas this will not prevent the court below preventing a plain contempt of its decrees. Such a contempt was made by the suit in the Supreme Court of the District.

The argument of the other side is in fact an argument on merits, which are not now open to discussion.

Mr. F. P. Stanton, for the appellant; Messrs. R. T. Merrick and G. W. Brent, contra.

Mr. Justice CLIFFORD delivered the opinion of the court.

Accurate conclusions in motions like the present, involving important questions of practice, are essential to the correct administration of justice in all judicial tribunals exercising appellate powers, but they are especially so in this court, whether the case is brought here from a State court or a Circuit Court, as the jurisdiction of the court is special and must in every case be tested by the Constitution and the laws of Congress.

Considerable importance is attached in this case to the motion for a supersedeas as well as to the motion to dismiss the appeal, but the court, in view of the circumstances, will first examine the motion to dismiss, as it is in its nature preliminary, and if granted will render it unnecessary to examine the other motion.

On the sixteenth of November, 1868, the appellee filed a bill of complaint against the appellant in the Circuit Court of the United States for the District of Virginia, setting up two written agreements therein described, and to which special reference is made as exhibited in the record. They are both of the same date. Without entering much into details, suffice it to say that one purports to be an assignment by the appellant to the appellee of all his right, title, interest, claim, and demand whatsoever in and to the property, stock, road, road-bed, franchise, and charter of the Alexandria and Washington Railroad Company, for two specific purposes. (1) To secure the payment to the appellee of the sum of five thousand dollars advanced by the appellee to the appellant. (2) To carry into effect the purposes and objects set forth in the other written agreement. Both agreements are signed by the appellant, and upon the back of the one given to secure the payment of the money advanced is the following agreement and consent: 'We, the undersigned, do hereby agree and consent to the terms and conditions of the within assignment,' which expressly recites that it was executed to accomplish the two purposes already described. Reference to the record will show that the assignment is signed by the appellant and that the indorsement is signed by all the other parties supposed by him to have an interest in the assigned property.

Special reference is made in the instrument of assignment to the purposes and objects set forth in the other written agreement, in which it is stipulated in substance and effect as follows: (1) That the appellant and Walter Lenox will convey all their right, title, and interest in that railroad company to a new corporation, to be formed as therein specified, or to devote all of that interest to the common benefit of the parties to the instrument, in the proportions therein specified, in case the old company should be revived. (2) That they agree to assign to the new company, when the parties shall actually organize the same, all their interest as lessees of the Washington, Alexandria, and Georgetown Railroad, or to hold the same for the exclusive use of the parties to the agreement, according to their respective interests. (3) That the appellee, for himself and the Adams Express Company, covenants to aid the new company, with money and credits, to pay, settle, or compromise certain specified liabilities as set forth in the agreement. Certain other important conditions are also inserted in the instrument, but they are not material in this investigation.

Process was duly issued and served, and the appellant appeared and filed an answer setting up various defences to the merits of the claim made by the appellee. Subsequent to the filing of the answer the appellee filed the general replication, and the cause being at issue proofs were taken by both parties. Before the final hearing, however, the appellant filed a cross-bill, in which he insisted upon the defences set up in the answer, and also alleged that the other parties to the agreements were necessary parties to the bill of complaint. Due answer was made by the appellee to the cross-bill, and the appellant filed to the same the general replication.

Such being the state of the pleadings, the cause, on the twenty-first of June last, came on for final hearing 'upon the bill, answer, and replication, and upon the cross-bill, answer, and replication, and upon the proofs,' and the statement in the decree is that 'the court is of the opinion that the equity of the case is with the complainant,' and that the court 'thereupon do order, adjudge, and decree that James S. French, the defendant in the original bill, be perpetually enjoined and restrained from any use of the name or title of the president of the Washington and Alexandria Railroad Company, under any election to that office heretofore held, and from any action by himself or any attorney or agent to interfere with any proceeding for the reorganization of the said company under the contract mentioned in said bill, &c., and from any proceeding whatever not in accordance with the said contracts, without prejudice,' as therein recited. Omitting the qualifications stated in the recitals, the decree continues as follows: 'It is further ordered, adjudged, and decreed that the said defendant, French, pay the costs in this cause.'

Final decrees in suits in equity passed in a Circuit Court, where the matter in dispute exceeds the sum or value of two thousand dollars exclusive of costs, may be re-examined in this court, but the act of Congress does not define what is meant by the phrase 'final decree.' Objection is made that the decree is not final because it does not in terms dismiss the cross-bill, but the court is of the opinion that the statement contained in the decree, that the equity of the case is with the complainant, by necessary implication disposes of the cross-bill as effectually as it does of the answer filed by the appellant to the original bill of complaint. Leave, it is true, is given to either party to apply, at the foot of the decree, for such further order as may be necessary to the due execution of the same, or as may be required in relation to any matter not finally determined by it, but it is quite apparent that that reservation was superadded to the decree as a precaution and not because the court did not regard the whole issue between the parties as determined by the decree. Such was doubtless the view of the Chief Justice who passed the decree, as the application for the appeal was made to him at the same term and was immediately granted without objection.

Several cases might be referred to where it is held that a decree of foreclosure and sale of mortgaged premises is a final decree, and that the defendant is entitled to his appeal without waiting for the return and confirmation of the sale by a decretal order, upon the ground that the decree of foreclosure and sale is final as to the merits, and that the unlterior proceedings are but a mode of executing the original decree.

Unquestionably the whole law of the case before the court was settled by the Chief Justice in that decree, and as nothing remains to be done, unless a new application shall be made at the foot of the decree, the court is of the opinion that the decree is a final one, as it has conclusively settled all the legal rights of the parties involved in the pleadings

2. Beyond all doubt the appeal of the respondent in this case was allowed within ten days from the date of the decree, and the record shows that the bond to prosecute the writ to effect and answer all damages and costs if he fail to make his plea good was filed and duly approved within the same period, but it is denied by the appellee that the appeal operates as a supersedeas, because it is insisted that the bond given in the case is not in a sum sufficient to constitute indemnity for the whole amount of the decree.

Where the judgment or decree is for the recovery of money, not otherwise secured, the indemnity must be for the whole amount of the judgment or decree, including just damages for delay, and costs and interest on the appeal.

But in all suits where the property in controversy necessarily follows the event of the suit, as in real actions, replevin, and in suits on mortgages, indemnity is only required in an amount sufficient to secure the sum recovered for the use or detention of the property and the other incidental items, as in cases where the judgment or decree is for money. What is necessary is that it be sufficient, and when it is desired to make the appeal a supersedeas, that it be filed within ten days from the rendering of the decree, and the question of sufficiency must be determined in the first instance by the judge who signs the citation, but after the allowance of the appeal that question as well as every other in the cause becomes cognizable here. It is therefore matter of discretion with the court to increase or diminish the amount of the bond and to require additional sureties or otherwise as justice may require.

All that is required in a case where the writ of error is not a supersedeas is that the bond shall be in an amount sufficient to answer the costs in case the judgment or decree is affirmed. Nothing appears in the record to show that the indemnity given is insufficient, and inasmuch as nothing appears to the contrary the court is of the opinion that it must be presumed that the amount is sufficient.

Appeals and writs of error are constituted a supersedeas in certain cases by virtue of the twenty-third section of the Judiciary Act, when the conditions there prescribed are fulfilled. Where those conditions are complied with the act of Congress operates to suspend the jurisdiction of the subordinate court and stay execution pending the writ of error or appeal, and until the case is determined or remanded.

Power to issue a supersedeas to a decree in a subordinate court does not exist in this court where the appeal was not taken and the proper bond given within ten days from the date of the order, except where an appeal was duly taken within ten days, and the aggrieved party is obliged to take a second appeal in consequence of the clerk below having neglected to send up the record in season, or where the granting of such a writ becomes necessary to the exercise of the appellate jurisdiction of the court, as where the subordinate court improperly rejected the sureties to the bond because they were not residents of the district.

Appellate power in the controversy under consideration is conferred upon this court, and it is clear that this court may issue a supersedeas in such a case whenever it becomes necessary to the exercise of its appropriate jurisdiction.

Attention will now be called to the grounds of the motion for a supersedeas, as shown in the affidavit of the appellant. He states that he filed a bill in equity in the Supreme Court of this district against Oscar A. Stevens, George W. Brent, W. Jackson Phelps, Richard T. Merrick, J. Dean Smith, and Walter Lenox; that the respondents demurred to the bill on the ground that the appellee before the court was a necessary party respondent in the case, and that the court where the bill was pending sustained the demurrer. Wherefore the appellant here amended his bill, and made the appellee a party respondent.

Consequent upon those proceedings, as the affiant states, the Circuit Court for the District of Virginia laid a rule on him requiring him to appear in that court, on a day named in the rule, to show cause why he should not be fined and attached for the acts set forth in the petition, and charged therein to be in violation of the aforesaid order and decree of the court below in this case; that he appeared and showed cause as required, but that the court there being of opinion that he had violated the decree in the case before the court by filing his bill in equity in the Supreme Court of this district, ordered that he forthwith dismiss the same and cease all proceedings under the same on pain of imprisonment, and that he, having no alternative but to go to jail or to submit to the order of the court, chose the latter, and dismissed his bill of complaint. His views are that the Circuit Court erred in passing that order, and that that court gave an erroneous construction to the decree entered by the Chief Justice in the case, making it more comprehensive than its language will warrant, and he moves this court to issue a supersedeas or other suitable order to correct those errors.

Suppose the theory of the appellant is correct that the circuit judge in construing the decree gave it a scope beyond its legitimate meaning, very grave doubts are entertained whether this court, under the present motion, could afford the appellant any remedy, as the facts supposed would not show that anything had been done to defeat or impair the appellate jurisdiction of this court. Acts void in themselves may be done by the Circuit Court outside of the jurisdiction of the Circuit Court which this court cannot re-examine. Authority does not exist in this court to issue a supersedeas, except in cases where it is necessary to the exercise of its appellate jurisdiction, but the court is not inclined to rest its decision in this case upon that ground, as we are all of the opinion that the circuit judge did not err in his construction of the order and decree enjoining the appellant in that decree. He is perpetually enjoined and restrained from any use of the name or title of the president of the company under any election to that office heretofore held, and from any action, by himself or any attorney or agent, to interfere with any proceeding for the reorganization of the company under the contracts, or from any proceeding whatever not in accordance with the said contracts. More comprehensive language could hardly be employed, and argument can hardly make it plainer or add anything to its force or effect.

BOTH MOTIONS DENIED.