Peale v. Phipps (55 U.S. 368)

THIS case was brought up, by writ of error, from the Circuit Court of the United States for the Eastern District of Louisiana.

It will be seen, by reference to 4 Howard, 225, that Charles Rice, and Mary his wife, and Martha Phipps, recovered, in an action of ejectment against the Agricultural Bank of Mississippi, two undivided third parts of a lot of ground in the city of Natchez.

In May, 1847, they sued out a writ of habere facias possessionem, and entered into possession of the property.

Under the laws of Mississippi, the charter of the bank became forfeited, and Elijah Peale was appointed trustee.

In April, 1848, Martha Phipps, and Mary Bowers, wife of Charles Rice, filed their petition in the Circuit Court of the United States for the Eastern District of Louisiana, against Peale. They claimed rent of the property from 1839 to 1847, damages for injuries done to the property whilst in possession of the bank, and the costs to which they had been put by the ejectment. Peale filed exceptions, and an answer. The second exception, upon which the judgment of this court turned, was as follows.

2. Because the charter of Agricultural Bank was declared forfeited, and the said bank put in a course of liquidation as an insolvent corporation, and this defendant appointed trustee, for the purpose of collecting the assets thereof, by the Circuit Court of Adams County, in the State of Mississippi; and said trustee is not amenable to any other court than the one that appointed him, and of which he is the officer; and this court has no jurisdiction whatever of him in his said capacity.

The following agreement of counsel was filed in the case.

It is agreed between the parties in the above-named suit, by Prentiss and Finney, attorneys for the plaintiffs, and Robert Mott, attorney for the defendant, that the following facts shall be admitted upon the trial of the cause, and the same are hereby admitted:

1. That the President, Directors, and Company of the Agricultural Bank of Mississippi, were in possession of the City Hotel, being the premises, the mesne profits of which are sued for on the 1st day of December, 1839.

2. It is admitted, that the said hotel and furniture rented, from said 1st day of December, 1839, until 1st November, 1842, for the sum of six thousand dollars per annum, and from said 1st November, 1842, until plaintiffs took possession at the rate of four thousand dollars per annum, and that said rates shall be considered as the fair annual rent of said property during said periods.

3. It is admitted, that the charter of the Agricultural Bank has been adjudged forfeited under the laws of Mississippi, and that the defendant, Elijah Peale, is the trustee appointed under, and by virtue of said laws, to represent the said corporation.

4. It is admitted, that the claim sued on, was, before the commencement of this suit, presented to the commissioners appointed in Mississippi, to audit and allow claims against said bank, to wit, to J. A. Van Dalsen and C. L. Dubuisson, and they were requested to audit and allow the same, but that they refused to audit, allow, or in any way recognize the same.

5. It is admitted, that the claim sued on, was, before the commencement of this suit, presented to the defendant, as trustee of said Agricultural Bank, and he was requested to allow the same as a just and valid claim against said bank; but that said defendant, as trustee as aforesaid, refused to admit, recognize, or allow said claim, or any part thereof.

6. It is admitted, that the fees of counsel employed by the plaintiffs in the prosecution of the suit of ejectment against the Agricultural Bank, for the recovery of said City Hotel, in the Circuit Court and Supreme Court of the United States, exceeded in value the sum of two thousand dollars, and that said sum of $2000 dollars would be a reasonable fee for the conduct of said suit from its commencement to its termination.

It is admitted, that the furniture of house, &c., on the premises, formed part of the rent in the proportion of one fourth to three fourths thereof.

It is admitted, that the charter of the bank was declared forfeited by law, and the assets of the bank put in the possession of the defendant, who still holds the same as trustee or representative.

RO. MOTT, Attorney.

PRENTISS & FINNEY, For Plaintiffs.

It is further admitted, that the Agricultural Bank had stopped specie payments previous to the time of the forfeiture of the charter, and did not afterwards resume.

PRENTISS & FINNEY, Plaintiffs' Attorneys.

In January, 1849, the cause came on to be heard, when the Circuit Court decreed, that the plaintiffs do recover from Peale the sum of $20,058, with interest at 5 per cent. until paid; and that they should have execution upon the assets of the bank, which were then, or might be thereafter, in the hands of the trustee.

From this decree, Peale appealed and brought the case up to this court.

It was argued by Mr. Lawrence, for the plaintiff in error, and Mr. Taylor, for the defendants in error.

Only that point will be mentioned upon which the judgment of this court turned.

Mr. Lawrence contended, for the plaintiff in error, that the action against Peale, who was a mere officer of the Adams County Court, Mississippi, for the purpose of collecting the assets of a bank in course of liquidation, could not be maintained in the United States Circuit Court for Louisiana. If the plaintiff wished to bring suit, independent of the proceedings in the Adams County Court, the suit should have been brought against the corporation in its corporate name. Hutch. Dig. § 10, 11, act 1840, p. 326; § 8, act 1843, p. 328; act February 28, 1846, p. 332; 6 Howard, (Miss.) 674.

Mr. Taylor, for the defendants in error.

The second ground of exception is partly based upon the assumption that the affairs of the Agricultural Bank were administered by the trustee Peale, because of the declared insolvency of the bank. This is neither admitted, nor proved to be true; and, in fact, the affairs of the bank were taken from the management of her own officers, because those officers had violated the laws of its existence, whereby it ceased to exist. But it does not follow, as a necessary consequence, that because the charter of the bank was declared, by the Circuit Court of Adams County, to have been forfeited, or because its affairs were put in liquidation by the order of that court, or because Mr. Peale was appointed trustee by that court, no court but the Circuit Court of Adams County can entertain jurisdiction of a suit against him, as trustee. An administrator or executor is appointed to represent the estate of a person deceased, after the Probate Court has found or adjudged the fact of his death, and put his affairs into a course of liquidation in the same manner. Such executors are liable to be sued in any court whatever; and even in cases where the State laws provide expressly that they shall not be sued, except in the court by which they are appointed, they are held liable to answer to the United States Circuit Court, notwithstanding such special exemption made by the State law. See case of Dupuy v. Bemiss, where this question is fully argued, (2 Annual Rep. 509); and case of Erwin v. Lowry, (7 Howard, 172-181,) reviewing and approving the doctrines, and even the reasonings, of the Louisiana court; and also 14 Peters's Rep. 75, examining the same questions; all settling the doctrine that even where the representative of an estate is subable only in his own court by the State law, he may yet be sued in the United States Circuit Court, and there be held to answer, and compelled to pay a debt of the succession, because, in every case of a conflict between the laws made by Congress (in accordance with the Constitution of the United States) and the acts of a State Legislature, the State laws must yield. We believe, that, in Mississippi, other courts besides the Circuit Court of Adams County, could have entertained jurisdiction of a suit against this trustee, in his said capacity; and that even if it were shown that, by the positive requirement of the laws of the State of Mississippi, suit could have been brought against Peale only in the Circuit Court of Adams County, which appointed him, we could, notwithstanding such requirement, sue Mr. Peale, as trustee, in the Circuit Court of the United States.

We also submit to the court whether the third and eighth admissions of counsel, found on the seventh page of the printed record, do not admit that the plaintiff in error, Mr. Peale, is the proper person to be sued for, and on account of, the debts due by the bank, because if, as admitted, the bank itself had ceased to exist, and Mr. Peale was in the actual possession of all its assets, and was its representative, he is the only person who can be sued on account of the liabilities of the bank. We think the admissions themselves afford good ground for overruling the exception.

Mr. Chief Justice TANEY delivered the opinion of the court.