JAMES M'DONALD, APPELLANT, v. FREEMAN SMALLEY, AND OTHERS, (IN ALL FORTY.)
January Term, 1828
THIS was an appeal from the Circuit Court of Ohio, by the complainant in that Court, on a bill filed in the Chancery side of the Court; the object of which was, through the aid of that Court, to obtain a conveyance of a tract of land, situated in the state of Ohio.
The complainant, a citizen of the state of Alabama, derived title under a conveyance from Duncan M'Arthur, a citizen of Ohio; and the only point decided in the Circuit Court, was upon the question of jurisdiction. The Circuit Court dismissed the bill, for want of jurisdiction; and the complainant appealed to this Court.
Before the argument commenced, the counsel for both parties asked instructions of the Court upon the question, whether, as the record contained the whole of the proceedings in the cause, and exhibited all the matters either party required for a final disposition of the case, in this Court, upon all the points in controversy, this Court would permit the argument to go to the whole case, so that a decree could be given here upon the whole case; or, whether, an opinion upon the jurisdiction only having been given in the Circuit Court, the argument should be confined to that question. The Court having advised upon the subject, directed the counsel to argue the point of jurisdiction only, as no other than that had been decided in the Court from which the appeal had been taken.
In the Circuit Court of Ohio, the defendant suggested, that M'Donald, the complainant in the bill, was not a citizen of Ohio; and according to a practice in the Courts of the state of Ohio, under the authority of a law of that state, interrogatories were exhibited to the complainant, to which answers were given. This law was passed subsequent to the Act of Congress, establishing the judiciary system, and was admitted not to be authority in the Courts of the United States. The facts stated by the complainant, in answer to those interrogatories, with other testimony, furnished the ground taken against the jurisdiction of the Court.
On the 14th November 1823, Duncan M'Arthur conveyed, by deed of indenture, the land in controversy, to the complainant; the consideration expressed in the deed being 1100 dollars, the amount of a debt he owed to the complainant, for land purchased from him. In reply to the interrogatory 'whether he was the beneficial owner, or was prosecuting the suit for the benefit of some resident in Ohio; and whether he is the real prosecutor of the suit, and was so at its commencement, or whether his name was used for the benefit of a citizen of the state of Ohio?' the complainant answered, by referring to a letter from Duncan M'Arthur to him, dated July 18th 1823. In that letter, Duncan M'Arthur offers to give the land in question, 1266 acres, alleged to be worth five dollars per acre, to pay a debt of 1100 dollars; suggests that the title is good, if prosecuted in the Federal Court; 'but state Judges do not understand land causes, and a claimant in the military district, might as well toss up heads and tails, as sue in a state Court.' It contains also this suggestion; 'should you accept this offer, and not wish to prosecute the claim yourself, you can make something handsome, I have no doubt, by selling it to some of your neighbours;' and it concludes with offering 'any assistance in my power, should a suit be brought for recovery of the land in the Circuit Court.'
He also stated, in his answer, that the deed under which he claimed, was executed for the purpose of giving jurisdiction to the Court of the United States; because he believed that Court safer than any other in the state of Ohio; that the contract was made by letter, of which he had not retained a copy; and, that at the time the deed was 'written,' there was no special agreement between him and M'Arthur, but, perhaps, propositions by letter. 'I give my bonds to a third party for a quit claim title to said lands, on condition of their paying me 1100 dollars.'
The complainant insisted, that the deed from M'Arthur, conveys to M'Donald such a title as will enable him to sustain the suit in a Federal Court;—that it is sufficient, if he has any interest;—that by accepting the deed, M'Donald has been paid his debt, and though he may be only mortgagee, he may sue in this Court.
The respondents contended, that the answer of M'Donald, shows that he is not the owner of the land; and his manner of answering, leaves no doubt, but that the owner is a citizen of Ohio, and that the jurisdiction of the Court, therefore, cannot be maintained.
Mr. Baldwin, and Mr. Dodridge, for the complainant.——
It is evident, that the complainant held the land, and it was not material how he held it. He had an interest in the land, and was a citizen of Alabama. It is not necessary that a party to sue in the Courts of the United States, shall be the sole owner, if he is beneficial owner of a part of the land; if he has any interest in the lands, it is sufficient. The class of cases decided in the Circuit Court of Pennsylvania, by Mr. Justice Washington, has established the principle. Robert Brown's lessee vs. Brown, 1 Wash. Rep. 429. Here the interest in the land is certainly to the extent of the debt; and the Court will sustain the jurisdiction, although the interest may not be commensurate with the whole of the land. It is important and necessary, and it was in the view of the framers of the Constitution of the United States, that their tribunals should be opened to those whom prejudice, or unjust, and unconstitutional legislation, in the states, might prevent from maintaining their rights in the Courts of the states, and the Courts of the United States should favour such appeals. Titles may, and are sometimes bad in a state, before a state Court, which are perfect under the decisions of the national Courts. Huidek oper's lessee vs. Douglas, 1 Circuit Court Rep. 258. Mr. Dodridge also referred to cases, similar in principle, decided in the Courts of Virginia.
Mr. Hammond, for the appellees.——
The inference to be drawn from the decisions of the Courts of Pennsylvania, is different from that which the complainant's counsel deduces. The interference of the Courts of the United States in relation to titles to lands, so as to regulate them differently from the laws of the state, is to be deprecated; such property should be held according to the decisions of the Courts of the state.
The complainant has nothing but a mortgage interest in the land, and such an interest cannot give jurisdiction to the Courts of the United States.
The engagement to give a quit claim deed, coupled with the absence of proof to show that the deed to be made was to another person than M'Arthur, authorizes the assertion that the whole arrangement was one intended only to aid M'Arthur in bringing his title before a Court of the United States; and such a proceeding cannot be sustained.
Mr. Chief Justice MARSHALL delivered the opinion of the Court.——
This suit was instituted in the Circuit Court of the United States for the seventh Circuit, and district of Ohio, to obtain a conveyance of a tract of land, lying in what is termed 'the military district;' claimed by the complainant under a patent, younger than that under which it is held by the defendants. The complainant is a citizen of Alabama, and claims the land under a conveyance from Duncan M'Arthur, who is a citizen of Ohio. The defendants objected to the jurisdiction of the Court; and after hearing the parties upon this point, the Court dismissed the bill, being of opinion that its jurisdiction could not be sustained. From this decree, the complainant has appealed, and the cause is now before this Court on the question of jurisdiction.
The bill states the complainant to be a citizen and resident of the state of Alabama, and the defendants to be citizens and residents of the state of Ohio. It has not been alleged and certainly cannot be alleged, that a citizen of one state, having title to lands in another, is disabled from suing for those lands in the Courts of the United States, by the fact, that he derives his title from a citizen of the state in which the lands lie: consequently, the single inquiry must be, whether the conveyance from M'Arthur to M'Donald was real or fictitious?
The transaction, as laid before the Court, appears to be this; M'Arthur was apprehensive that his title could not be sustained in the Courts of the state, in which alone he could sue; and being indebted to M'Donald in the sum of $1100, offered to sell and convey to him the land in controversy, in payment of this debt. The letter in which this offer was made, expresses the opinion that his title was good, and would most probably be established in the Courts of the United States, but would fail in the Courts of the state. He estimates the property as being worth much more than the sum he is willing to take for it, but in consequence of the difficulties attending the title, he is willing to convey it in satisfaction of the debt. He suggests, that if M'Donald should be disinclined to engage in the controversy himself, he might make an advantageous sale to some of his neighbours, who might be disposed to emigrate to Ohio; and offers to render any service in his power to the proprietor of the land, in the prosecution of the claim in the Courts of the United States.
The contract was concluded by a letter, written in answer to that which has been stated, of which the said M'Donald retained no copy. There was no special agreement between the plaintiff and M'Arthur when the deed was written, but perhaps some proposition by letter. He gave his bond to a third party for making a quit claim title to the land, on condition of receiving from him eleven hundred dollars.
This testimony, which is all that was laid before the Court, shows, we think, a sale and conveyance to the plaintiff, which was binding on both parties. M'Donald could not have maintained an action for his debt, nor M'Arthur a suit for his land. His title to it was extinguished, and the consideration was received. The motives which induced him to make the contract, whether justifiable or censurable, can have no influence on its validity. They were such as had sufficient influence with himself, and he had a right to act upon them. A Court cannot enter into them, when deciding on its jurisdiction. The conveyance appears to be a real transaction, and the real as well as nominal parties to the suit, are citizens of different states.
The only part of the testimony which can inspire doubt, respecting its being an absolute sale, is the admission that the plaintiff gave his bond to a third party for a quit claim title to the land, on paying him $1100. We are not informed who this third party was, nor do we suppose it to be material. The title of M'Arthur was vested in the plaintiff, and did not pass out of him by this bond. A suspicion may exist, that it was for M'Arthur. The Court cannot act upon this suspicion.
But suppose the fact to be avowed, what influence could it have upon the jurisdiction of the Court? It would convert the conveyance, which on its face appears to be absolute, into a mortgage. But this would not affect the question. In a contest between the mortgagor and mortgagee, being citizens of different states, it cannot be doubted that an ejectment, or a bill to foreclose, may be brought by the mortgagee, residing in a different state, in a Court of the United States. Why then may he not sustain a suit in the same Court, against any other person being a citizen of the same state with the mortgagor. We can perceive no reason why he should not. The case depends, we think, on the question, whether the transaction between M'Arthur and M'Donald was real or fictitious; and we perceive no reason to doubt its reality, whether the deed be considered as absolute or as a mortgage.
A question has been made, whether the Circuit Court ought to have noticed the testimony on the conveyance under which the plaintiff claims, because it was brought irregularly before them.
By a law of the state, interrogatories may be propounded by the defendant in his answer, which the plaintiff is compelled to answer as if they had been propounded in a cross bill.
Although this point has become unimportant in this cause, the Court thinks it proper to say, that the rules which govern the practice of the Circuit Courts in Chancery, have been prescribed by this Court, and ought to be observed.
We think there is error in the decree of the Circuit Court dismissing the complainant's bill, and that the same ought to be reversed, and the cause remanded for further proceedings according to law.
This case came on, &c. and was argued on the point of jurisdiction, on consideration whereof, This Court is of opinion, that there is error in the decree of the said Circuit Court dismissing the complainant's bill. It is therefore decreed, and ordered by this Court, that the decree of the said Circuit Court in this cause be and the same is hereby reversed and annulled. And it is further ordered, that the cause be remanded to the said Circuit Court for further proceedings to be had therein, according to law and justice.
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