McDaniel v. Traylor (196 U.S. 415)

This was a suit in equity, instituted in the circuit court of the United States for the Eastern District of Arkansas by the appellants, citizens of Arkansas, against the appellees, more than thirty in number, and respectively citizens, corporate and individual, of Tennessee, New York, Missouri, Illinois, New Jersey, Connecticut, Ohio, and Georgia.

There was a demurrer to the bill by some of the defendants upon the ground, among others, that the circuit court had no jurisdiction of the parties and subject-matter. The demurrer was sustained, and the bill dismissed for want of jurisdiction.

The question of jurisdiction depends, of course, upon the allegations of the bill. The case made by the bill is this:

On the 13th day of April, 1891, Hiram Evans, a resident of St. Francis county, Arkansas, died intestate and possessed of personal property exceeding $12,000 in value.

He was also seised in fee of 760 acres of land of the value of about $16,000, and left surviving him as his only heirs at law the three appellants, and three sons, James Evans, William E. Evans, and John Evans.

By an order made April 21st, 1891, in the probate court of the county, James Evans was appointed administrator of the estate of the intestate. Having duly qualified as such, he took possession of all the assets of the estate, and acted as such administrator until his death.

Among the assets that came to his hands as administrator was a drug store, which, with its stock of goods, fixtures, book accounts, and other things therein contained, was sold and delivered by him to John Evans on the 1st day of May 1891. The latter conducted the business in his own name, and while doing so incurred debts and obligations to the defendants in this suit, aggregating $3,000, as well as debts and obligations to other persons; but no single one of his debts exceeded $2,000.

John Evans became insolvent, and on May 27th, 1892, transferred and delivered to James Evans, administrator of Hiram Evans, the drug store and all that remained of the stock of goods, fixtures, and book accounts.

Thereupon, the bill alleged, the defendants herein 'conspired, colluded, and confederated' together and with John Evans and with James Evans, administrator, to secure the payment of their claims and demands against John Evans out of the assets of the estate of Hiram Evans, deceased, and, 'so conspiring and confederating,' they presented to the probate court their several claims and demands-and James Evans, administrator, fraudulently and illegally approved them-for allowance against the estate of Hiram Evans.

The bill also alleged that the defendants and the administrator of Hiram Evans, still conspiring and confederating together, procured the judgment of the probate court establishing their claims against the estate of Hiram Evans by concealing from the court the fact that they were debts and obligations of John Evans, and cloaking them under the name of expenses of administration of the said estate; 'all of which transactions were part of the same scheme, and were participated in by each and all of the said defendants, and by siad John Evans and said James Evans, administrator.'

It was further alleged: 'That the said judgments of said court, establishing and allowing the respective claims and demands of the defendants herein against the said estate, were wholly the result of the conspiracy and confederation hereinbefore mentioned, and the fraud practised in pursuance thereof as aforesaid, and are, therefore, in equity and good conscience, void and ineffectual for any purpose whatsoever, and ought not to be enforced; but that, nevertheless, the same are at law liens upon the real estate hereinbefore described, and charges against the respective interests' of the plaintiffs; that, in pursuance of the said conspiracy and confederation, the defendants, and John Evans and James Evans, concealed from plaintiffs the matters and things hereinbefore complained of, and failed to disclose to them the sale of the drug store to John Evans, and the fact that the said claims and demands of defendants were the personal debts and obligations of John Evans; that it had been determined by the supreme court of the state in certain proceedings relating to the matters here in controversy that neither the probate court, nor the state circuit court on appeal, had jurisdiction to hear or determine equitable issues, and that plaintiffs' remedy lay 'in an original proceeding in a court of competent chancery jurisdiction, and that the said action and ruling of the said supreme court was without prejudice to your orators' beginning and maintaining this bill of complaint.'

The bill still further alleged that, under the law of Arkansas, the judgments of the probate court, allowing and classifying the demands of defendants, passed beyond the control of that court at the expiration of the term at which the same were rendered, and that thereafter it was not within its power to alter, amend, or set aside the same; that the time within which plaintiffs might have taken an appeal, or have compelled the administrator to take an appeal, from the judgment, had expired long prior to the time when they acquired knowledge of the matters and things hereinbefore complained of; that, by reason thereof, plaintiffs are wholly without remedy in the premises unless the relief prayed be granted them; that all the acts and doings of the defendants toward procuring the said judgments of the probate court were wrongful, fraudulent, and inequitable, and tended to the manifest wrong, injury, and oppression of plaintiffs; and that, in equity and good conscience, the defendants ought not to have or enjoy the benefit or advantage of the said judgments.

The relief prayed was that the judgments of the probate court be set aside, and held not to be valid or lawful liens upon or against the real estate herein described, nor upon the right, title, or interest therein of the plaintiffs; that the defendants be enjoined from enforcing such judgments, or from taking any benefit, profit, or advantage by them; and that, all the defendants being without the jurisdiction of the circuit court, an order be made directing them to be notified of this suit by publication, according to the provisions of the act of Congress of March 3d, 1875. 18 Stat. at L. 470, chap. 137, U.S.C.omp. Stat. 1901, p. 508.

By the act just referred to it was, among other things, provided: 'Sec. 8. That when, in any suit commenced in any circuit court of the United States to enforce any legal or equitable lien upon, or claim to, or to remove any encumbrance or lien or cloud upon, the title to real or personal property within the district where such suit is brought, one or more of the defendants therein shall not be an inhabitant of, or found within, the said district, or shall not voluntarily appear thereto, it shall be lawful for the court to make an order directing such absent defendant or defendants to appear, plead, answer, or demur, by a day certain to be designated, which order shall be served on such absent defendant or defendants, if practicable, wherever found, and also upon the person or persons in possession or charge of said property, if any there be; or, where such personal service upon such absent defendant or defendants is not practicable, such order shall be published in such manner as the court may direct, not less than once a week for six consecutive weeks; and in case such absent defendant shall not appear, plead, answer, or demur within the time so limited, or within some further time, to be allowed by the court, in its discretion, and upon proof of the service or publication of said order, and of the performance of the directions contained in the same, it shall be lawful for the court to entertain jurisdiction, and proceed to the hearing and adjudication of such suit in the same manner as if such absent defendant had been served with process within the said district; but said adjudication shall, as regards said absent defendant or defendants without appearance, affect only the property which shall have been the subject of the suit and under the jurisdiction of the court therein within such district. . . .' 1 U.S. Rev. Stat. Supp. pp. 84-5; 18 Stat. at L. 470, chap. 137, U.S.C.omp. Stat. 1901, p. 513.

Upon demurrer to the jurisdiction of the circuit court, that court dismissed the suit, being of opinion that the value of the matter in dispute was not sufficient to give jurisdiction. McDaniel v. Traylor, 123 Fed. 338.

George B. Webster and J. R. Beasley for appellants.

[Argument of Counsel from pages 420-421 intentionally omitted]

Mr. N. W. Norton for appellees.

[Argument of Counsel from page 421 intentionally omitted]

Mr. Justice Harlan delivered the opinion of the court: