lent combination with the other officers of the | to the single purpose of securing payment of a bank, issued stock in excess of the lawful limit, dert due from the cashier to the Bank. and gave her new certificates for those that he had obtained from her; it was held that he was her agent in the original transaction, and that, [169] as she gave no value to the bank for the new certificates, the loss must fall upon her and not upon the bank. In Tome v. R. R. Co., 39 Md., 36, there was no by-law requiring a surrender and transfer of old certificates before the issue of new ones, and no limit of the amount of stock to be issued; and it was not contended that there had been any over-issue, or that the plaintiff had any notice of fraud or want of authority in the officers of the corporation. In R. R. Co. v. Bank, 60 Md., 36, the certificates were not issued to the plaintiff, but bought in the market, without any notice of their having been fraudulently or illegally issued. In Water Cov. De Kay, to which the plaintiff has referred us, the Court of Errors of New Jersey said: "Indeed, as is apparent from all the cases cited, the doctrine which validates securities within the apparent powers of the corporation, but improperly and therefore illegally issued, applies only in favor of bona fide holders for value. A person who takes such a security, with knowledge that the conditions on which alone the security was authorized were not fulfilled, is not protected, and in his hands the security is invalid, though the imperfection is in some matter relating to the internal affairs of the corporation, which would be unavailable against a bona fide holder of the same security." 9 Stew. (N. J.), 548, 565. The general doctrine was stated with like limitations by this court in the case of Merchants' Bk. v. State Bk.: "Where a party deals with a corporation in good faith-the transaction is not ultra vires-and he is unaware of any defect of authority or other irregularity on the part of those acting for the corporation, and there is nothing to excite suspicion of such defect or irregularity, the corporation is bound by the contract, although such defect or irregularity in fact exists." 10 Wall.,604, 644 [77 U. S.,XIX., 1008, 1018]. This review of the cases shows that there is no precedent for holding that the plaintiff, having dealt with the cashier individually and lent money to him for his private use and received from him a certificate in her own name, which stated that shares were transferable only on the [170] books of the Bank and on surrender of former certificates, and no certificate having been surrendered by him or by her, and there being no evidence of the Bank having ratified or received any benefit from the transaction, can recover from the Bank the value of the certificate delivered to her by its cashier. The exceptions to the exclusion of evidence cannot be sustained. The evidence that in one or two other instances stock was issued by the cashier without the surrender of old certificates, and that the directors of the Bank approved certain transfers to its president of shares once belonging to the cashier, was quite insufficient to prove that the Bank ratified or received any benefit from the issue of the certificate to the plaintiff, or was guilty of any fraud towards The action of the directors was adapted her. The evidence introduced and offered being insufficient to support a verdict for the plaintiff, the Circnit Court rightly directed the jury to return a verdict for the defendant. Randall v. R. R. Co., 109 U. S., 478 [XXVII., 1003]. Judgment affirmed. Mr. Justice Bradley dissented. Mr.Justice Matthews, having been of counsel, did not sit in this case nor take any part in its decision. (See S. C., Reporter's ed., 176-185.) Recovery in State Court of property held by U S. Marshal-defense-property in possession of officer of U. S. Court-action against officerremedy of owner. J. It is error in a State Court to permit a recovery, by the rightful owner, of the possession of personal his deputy, who holds the same by virtue of an exproperty, against a Marshal of the United States or ecution issued upon a judgment of the United States Circuit Court. his deputy, of property by virtue of a levy under an 2. The possession, by a United States Marshal or execution issued by a United States Court is, in itself, a complete defense to a subsequent action of replevin in a State Court, without regard to the rightful ownership. 3. When property is taken and held under process, mesne or final, of a court of the United States, it is in the custody of the law and within the exclusive jurisdiction of the court from which the process has issued, for the purposes of the writ, and the possession of the officer cannot be disturbed by process from any State Court. officer for trespasses not involving any interference 4. This principle does not cover actions against the with the property itself while in his possession. 5. A third person, a stranger to the suit and claiming the property as owner, may prosecute his right to restitution in such case, by ancillary proceedings in the court in which the process issued, or he may pursue his remedy for damages against the officer, either personally for the trespass or for the breach of his official duty, upon his bond and against his sureties. [No. 255.] Submitted Mar. 17, 1884. Decided Mar. 31, 1884. IN ERROR to the Supreme Court of the State of Michigan. The history and facts of the case appear in the opinion of the court. Messrs. Roger W. Butterfield and J. W. Champlin, for plaintiff in error. Mr. L. D. Norris, for defendant in error. [176] Mr. Justice Matthews delivered the opinion [177] of the court : The defendant in error was the plaintiff in the state court and brought her action of replevin for the recovery of specific personal property, to which she claimed title and which, she alleges, was wrongfully detained from her by the plaintiff in error. The defendant below was Deputy-Marshal of the United States and, as such, had possession of the property replevied by virtue of an execution issued upon a judg-sued by a common law court, although the lat The case of Freeman v. Howe, 24 How., 450 [65 U. S., XVI., 749], was precisely like the present in its circumstances, except that there the process under which the marshal had seized and held the property replevied, was an attachment according to the state practice in Massachusetts, being mesne process, directed, however, not against property specifically described, but commanding a levy, as in cases of fi. fa., upon the property of the defendant. Whether that difference is material is, perhaps, the only question to be considered, for the doctrine of that decision is too firmly established in this court to be longer open to question. The proper answer to it will be found by an examination of the principles on which the judgment in that case proceeded, and of those cases which preceded, and of others, which have followed it." In the opinion in that case, Mr. Justice Nelson refers to the case of Taylor v. Carryl, 20 How., 583 [61 U. S., XV., 1028], as a conclusive and sufficient authority on the point. He said: "The main point there decided was, that the property seized by the sheriff, under the process of attachment from the state court and while in the custody of the officer, could not be seized or taken from him by a process from the District Court of the United States, and that the attempt to seize it by the marshal, by a notice or otherwise, was a nullity, and gave the court no jurisdiction over it, inasmuch as to give jurisdiction to the district court in a proceeding in rem, there must be a valid seizure and an actual control of the 'res under the process." And referring to the grounds of the dissent in that case, he continues: "The majority of the court was of opinion that, according to the course of [178] decision, in the case of conflicting authorities under a state and federal process, and in order to avoid unseemly collision between them, the question as to which authority should for the time prevail, did not depend upon the rights of the respective parties to the property seized, whether the one was paramount to the other, but upon the question, which jurisdiction had first attached by the seizure and custody of the property under its process. The opinion then proceeds to show that no distinction can be made, affecting the question, between process in rem, and an attachment is The opinion of the court then points out the error of Chancellor Kent, in his statement, 1 Com., 410, that, "If a Marshal of the United States, under an execution in favor of the United States against A, should seize the person or property of B, then the State Courts have jurisdiction to protect the person and the property so illegally invaded." Commenting on this statement, it is said, that the effect of the principle, if admitted, would be to draw into the State Courts, "Not only all questions of the liability of property seized upon mesne and final process issued under the authority of the Federal Courts, including the admiralty, for this court can be no exception, for the purposes for which it was seized, but also the arrests upon mesne and imprisonment upon final process of the person in both civil and criminal cases, for in every case the question of jurisdiction could be made;" and the court adds: "We need scarcely remark, that no government could maintain the administration or execution of its laws, civil or criminal, if the jurisdiction of its judicial tribunals were subject to the determination of another." To meet the objection, that the party whose property had been wrongfully taken and withheld would be left without remedy, unless, by virtue of citizenship, he could sue in a Federal Court, the opinion then explains the remedy in such cases, by an ancillary proceeding in the court whose process has been made the instrument of the wrong; a remedy, the principle and procedure of which, we had occasion recently in the case of Krippendorf v. Hyde [ante, 145], to restate and re-affirm. The point of the decision in Freeman v. Howe, supra, is, that when property is taken and held under process, mesne or final, of a court of the United States, it is in the custody of the law and within the exclusive jurisdiction of the court from which the process has issued, for the purposes of the writ; that the possession of the officer cannot be disturbed by process from any State Court, because to disturb that possession would be to invade the jurisdiction of the court by whose command it is held, and to violate the law which that jurisdiction is appointed to administer; that any person, not a party to the suit or judgment, whose property has been wrongfully but under color of process taken and withheld, may prosecute, by ancillary proceedings, in the court whence the process issued, his remedy for restitution of the [179] property or its proceeds, while remaining in the control of that court; but that, all other remedies to which he may be entitled, against officers or parties, not involving the withdrawal of the property or its proceeds, from the cus tody of the officer and the jurisdiction of the court, he may pursue in any tribunal, State or Federal, having jurisdiction over the parties and the subject-matter. And vice versa, the same principle protects the possession of property while thus held, by process issuing from State Courts, against any disturbance under process of the courts of the United States; excepting, of course, those cases wherein the latter exercise jurisdiction for the purpose of enforcing [180] the supremacy of the Constitution and laws of [181] the United States. The doctrine of Freeman v. Howe, supra, was further defined by the decision in Buck v. Colbath, 8 Wall., 334 [70 U. S., XVIII., 257], which checked and corrected an attempted misapplication of its principle, which, if permitted, would cover actions against the officer for trespasses, not involving any interference with the property itself while in his possession. It was there satisfactorily shown that the officer was protected against such an action, only in that class of cases, where he could justify, under process or order of a court directing expressly the very act alleged to be wrongful; and not in that other class, where the writ or order, such as a writ of attachment or other mesne process, and the final process of execution upon a judgment, commands the seizure of property described not specifically, but only generally, as the property of the party named in the writ. In the latter, the officer acts at his peril and is responsible in damages to the party injured, for the consequences of any error or mistake in the exercise of his discretion in the attempt to enforce the writ. In the former, as he has no discretion, it is the court itself which acts, and the officer is protected in his obedience to its command. Of this class, the case of Conner v. Long, 104 U. S. 228 [XXVI., 723], was an example; that of Buck v. Colbath, supra, fell within the latter. And in distinguishing that case from Freeman v. Howe, supra, Mr. Justice Miller stated the principle of the latter decision; "A principle," he said, "which is essential to the dignity and just authority of every court and to the comity which should regulate the relations between all courts of concurrent jurisdiction;" "that principle is," he continued, "that whenever property has been seized by an officer of the court, by virtue of its process, the property is to be considered as in the custody of the court, and under its control for the time being; and that no other court has a right to interfere with that possession, unless it be some court which may have a direct supervisory control over the court whose process has first taken possession, or some superior jurisdiction in the premises." is concerned, they can be distinguished. One The very point was involved in the decision in Hagan v. Lucas, 10 Pet., 400, where it was expressly held that property held by a sheriff under an execution from a State Court could not be taken in execution by a Marshal of the United States by virtue of final process upon a judgment in a Federal Court. Mr. Justice McLean, delivering the opinion of the court, said: "Had the property remained in the possession of the [182] sheriff under the first levy, it is clear the marshal could not have taken it in execution, for the property could not be subject to two jurisdictions at the same time. The first levy, whether it were made under the federal or state authority, withdraws the property from the reach of the process of the other." "A most injurious conflict of jurisdiction would be likely often to arise between the Federal and State Courts, if the final process of the one could be levied on property which had been taken by process of the other. The marshal or the sheriff, as the case may be, by a levy, acquires a special property in the goods and may maintain an action for them. But if the same goods may be taken in execution at the same time by the marshal and the sheriff, does this special property vest in the one, or the other, or both of them? No such case can exist; property once levied on remains in the custody of the law, and it is not Here it will be perceived that no distinction liable to be taken by another execution in the is made between writs of attachment and exe-hands of a different officer; and especially by cutions upon judgments, and that the principle an officer acting under a different jurisdiction." embraces both, as indeed both are mentioned That which cannot be done by final process, as belonging to the same class elsewhere in the is equally out of the reach of original or mesne opinion. process. And there is nothing in the nature, office or command of the two descriptions of process, by which, so far as the question here involved The forbearance which courts of co-ordinate jurisdiction, administered under a single system, exercise towards each other, whereby con puted, but cases where its validity was questioned, and it appeared that the prisoner was held under claim and color of such authority, in good faith, and not by way of mere pretense and imposition. And the exclusive authority of the court issuing the writ extends, not only to the decisions of all questions affecting its jurisdiction, and the form and force of the writ itself, and the validity of the proceeding in issuing and executing it, but also of all questions affecting the identity of the person or property seized and held under color of its authority, and the right to exempt them from its operation. It does not avail therefore to say, that, as the writ commands the officer to take the property of the defendant, he cannot under that, claim to take and hold the property of another; because the property which he does actually take, he takes and holds as the property of the defendant, claiming it to be such, and therefore he has it in his possession under color of process and claim of right. In Lammon v. Feusier [ante, 337], already cited, it was said by Mr. Justice Gray, in reference to the case of a common law attachment, that "The taking of the attachable property of the person named in the writ is rightful, the taking of the property of another person is wrongful; but each, being done by the marshal in executing the writ in his hands, is an attempt to perform his official duty and is an official act." The same is true of a similar levy under an execution, as we have shown that there is no difference, relevant to the point, between the two writs. flicts are avoided, by avoiding interference with the authority of the United States was undisthe process of each other, is a principal of comity with perhaps no higher sanction than the utility which comes from concord; but between State Courts and those of the United States, it is something more. It is a principle of right and of law and, therefore, of necessity. It leaves nothing to discretion or mere convenience. These courts do not belong to the same system, so far as their jurisdiction is concurrent; and although they co-exist in the same space, they are independent and have no common superior. They exercise jurisdiction, it is true, within the same territory but not in the same plane; and when one takes into its jurisdiction a specific thing, that res is as much withdrawn from the judicial power of the other, as if it had been carried physically into a different territorial [183) sovereignty. To attempt to seize it by a foreign process is futile and void. The regulation of process, and the decision of questions relating to it, are part of the jurisdiction of the court from which it issues. "The jurisdiction of a court," said Chief Justice Marshall, "is not exhausted by the rendition of its judgment, but continues until that judgment shall be satisfied. Many questions arise on the process, subsequent to the judgment, in which jurisdiction is to be exercised.' Wayman v. Southard, 10 Wheat., 1. The principle which defines the boundaries of jurisdiction between the judicial tribunals of the States and of the United States, the application of which effectually prevents their confusion, was set forth and vindicated in the judgment of this court in Ableman v. Booth, 21 How., 506 [62 U. S., XVI., 169]. It was there said by Chief Justice Taney, p. 516 [173], "That the Property thus levied on by attachment or sphere of action appropriated to the United taken in execution is brought by the writ withStates is as far beyond the reach of the judicial in the scope of the jurisdiction of the court process issued by a state judge or a state court whose process it is, and as long as it remains in as if the line of division was traced by land- the possession of the officer it is in the custody marks and monuments visible to the eye." And of the law. It is the bare fact of that possesspeaking of the procedure in cases of habeas sion under claim and color of that authority, corpus, issued under state authority, and admit- without respect to the ultimate right, to be asting the duty of the officer of the United States, serted otherwise and elsewhere, as already sufholding the prisoner under its process, to return ficiently explained, that furnishes to the officer the fact and show his warrant, the Chief Jus- complete immunity from the process of every tice continues: "But after the return is made other jurisdiction that attempts to dispossess and the state judge or court judicially apprised him. That was the defense made and relied on [185] that the party is in custody under the authority by the plaintiff in error in the present case, and of the United States, they can proceed no fur- to which the Supreme Court of Michigan rether. They then know that the prisoner is with- fused to give its due and conclusive effect. For in the dominion and jurisdiction of another gov- that error, its judgment is reversed and the cause ernment, and that neither the writ of habeas is remanded, with directions to affirm the judg corpus nor any other process issued under statement of the Circuit Court for the County of Kent, authority can pass over the line of division be- in favor of the plaintiff in error; and it is so ortween the two sovereignties. He is then with- dered. in the dominion and exclusive jurisdiction of the United States. If he has committed an offense against their laws, their tribunals alone can punish him. If he is wrongfully impris- 49 Am. Rep., 519. oned, their judicial tribunals can release him and afford him redress. * * * No judicial process, whatever form it may assume, can have any lawful authority outside of the limits of the jurisdiction of the court or judge by whom it is issued; and any attempt to enforce it beyond these boundaries is nothing less than lawless violence." And in Tarble's Case, 13 Wall., 397 [80 U. S., XX., 597], commenting on this language of Chief Justice Taney in Alleman v. Booth, supra, Mr. Justice Field points out, that it was not intended merely to meet cases where [184] True copy. Test: James H. McKenney, Clerk, Sup. Court, U. S. ASENATH A. WARE ET AL., Appts., CITY GALVESTON CITY COMPANY. (Sce S. C., Reporter's ed., 170-175.) Limitation of action against principal―trust of personal property-claim barred at law, when barred in equity. 1. A statute of limitations that bars a claim against an agent, equally protects those on whose [172] behalf he acted as agent, where there are no circumstances of equity to prevent the operation of the statute in their favor; the concealment of the fact of the agency where there is no fraud on the part of the principals, is insufficient for that purpose. 2. The personal representative of one deceased, and not his heirs at law, is the proper complainant in a suit to enforce a trust as to personal property. 3. Where a claim is barred at law by lapse of time, it will not be revived in equity without special cir[No. 264.] cumstances. Submitted Mar. 19, 20, 1884. Decided Mar. 31, 1884. and provision was made for issuing trustees' certificates to the individual owners of interests, which was in fact done, and the holders of certificates, which were assignable, became associated as the Galveston City Company. It is alleged, however, that out of the 600 shares, a number deemed sufficient for which no certificates were issued, but part of those which otherwise would belong to the Menard interest, were reserved to be sold for the purpose of pay. ing the debt to White, so as to relieve the Tripand so as also to indemnify Menard individually lett interest from any charge on that account, ber of the shares thus set apart and appropriated, against his liability therefor. The precise numMessrs. Walter Gresham, A. H. Garland, that on March 10, 1851, twenty-nine shares of it is alleged, is not known; but it is charged P. C. Baker and A. H. Willie, for appellants. the original number so appropriated still reMessrs. W. H. Goddard and W. P. Ballin-mained in the hands of the Company undisger, for appellee. A PPEAL from the Circuit Court of the United States for the Eastern District of Texas. The history and facts of the case appear in the opinion of the court. Mr. Justice Matthews delivered the opinion of the court: This is an appeal from a decree dismissing a bill in chancery, upon general demurrer for want of equity. The complainants, also appellants, are the heirs at law of David White, deceased, citizens respectively of Alabama and Florida; the defendant, the appellee, is alleged to be a Corporation incorporated by an Act of the Congress of the Republic of Texas, and a citizen of that State. It is alleged in the bill, which was filed October 11, 1880, that the Republic of Texas, on January 25, 1838, issued a patent to Michael B. Menard, in consideration of $50,000, for one league and labor of land on and including the east end of Galveston Island; that David White, the ancestor of the complainants, advanced and paid that sum for Menard, to secure repayment of which the latter executed and delivered his mortgage on the land to White. Menard at the time had associates, jointly interested with him in the purchase and, others became so subsequently, and the association was a partnership, with a view of organizing a joint stock company for the sale of the land, for profit, in lots, and distribution of the net proceeds as dividends to shareholders, Menard being, however, the managing partner and, until April 18, 1837, holding the legal title, the indebtedness to White having been incurred in his own name, and the mortgage executed by him individually for the repayment of the same. About the date last mentioned, Menard released to one Triplett 640 acres of the land to compromise a conflicting claim of title; and afterwards, about June 15, 1837, the whole original tract, including that released to Triplett, was conveyed by all parties in interest, to trust ees in trust, for the purpose of carrying into effect the original plan, Triplett and those interested with him becoming co-associates with Menard and his associates. To that end, the trustees were to issue 1,000 shares of stock, of which 400 were set aside to provide for certain certificates previously issued under the Menard interest, and the remaining 600 shares were to be sold and the proceeds applied first to the payment of expenses, and then to be divided, one third to the Triplett interest and two thirds to the Menard interest, but the debt to White was to be provided for out of the Menard shares; posed of. On April 13, 1838, the holders of these certificates seem to have organized as stockholders of a future corporation, the Galveston City Company, and elected five directors, to whom, as directors of the association, the legal title to the land was conveyed by the trustees. Thereafter the outstanding trustees' certificates were called in, and "renewal certificates," so-called, were issued in exchange, which represented the shares of the Company. It is further alleged that, about Nov. 7, 1838, the Company, by Menard, its president and agent, but in his individual name, paid White $25,000 on account of the debt due to him out [173] of the proceeds of the stock reserved for that purpose; and about the same time intrusted Menard, as agent of the Company, with fifty shares of the reserved stock, for sale, to pay the remainder of the debt to White. Menard sold twenty-one of these shares and paid to White the proceeds thereof, being $10,550, in 1839, which, with the previous payment, is all that has been paid on account of the debt due to him, leaving $14,450 of the principal sum unpaid. On February 5, 1841, the stockholders of the association became incorporated by an Act of the Congress of the Republic of Texas as the Galveston City Company, the defendant below. Long after the organization of the Corporation, on March 10, 1851, Menard made a written report to the Company of his agency in the sale of the fifty shares intrusted to him for the purpose of paying the debt to White. In that report, he recounted the circumstances of the history of the transaction, and the facts as to the sale of the twenty-one shares and the payment made to White, showing the balance due, as above set forth, for which he stated a suit was then pending against him individually, and for which he held the remaining twenty-nine shares of stock. Valuing them at $5,800, which he estimated to be their market value, there would be a deficiency of $8,650 to provide for on the amount due to White. He also claimed that he was in advance for the Company, in the sum of $13,000, on other accounts, and asked that the Company make provision for his re-imbursement by a par credit on its books for the full amount of $21,650. The Board of Directors, by resolution, admitted the correctness of Men ard's statement of his account and ordered a credit to him on its books for the amount stated. |