First National Bank v. Poston

Anderson, J., delivered the opinion of the court. This is an appeal from the chancery court of Holmes county to settle the principles of the cause. Appellees, John H. Poston, a resident citizen of Memphis, Tenn., and Buckingham Dry Goods Company, a corporation under the laws of the state of Tennessee, filed their bill in the chancery court of Holmes county against E. E. Bolin, individually and as trustee, a resident citizen of Tennessee, William Schild, also a resident citizen of said state, and the First National.Bank of Canton, the Bank of Durant, and the People’s Bank of Durant, banking corporations under the laws of this state. Appellees, the three banks named, answered separately, and made their answers cross-bills asking for affirmative relief ag’ainst complainants (appellees) in the original bill, and also against the defendants therein, said Poston and Schild. To these cross-bills appellees demurred, which demurrers the trial court sustained, and dismissed said cross-bills. Prom those decrees the court below granted'an appeal to settle the principles of the cause under section 35, Code of 1906 (Hemingway’s Code, par. 10), which appeal was duly perfected within the time prescribed by law. *74 Two questions' are argued in the cases: First, appellants contend that they are entitled to an appeal to settle the principles of the cause, which contention is vigorously contested hy appellees. Second, appellants contend that their cross-bills state grounds for affirmative relief to which they will be entitled if sustained hy the proof, and that therefore the trial court should have retained said cross-bills and administered full relief, which contention appellees also vigorously contest. The cause is here on the pleadings alone. William Schild and E. E. Bolin, codefendants with appellants in the original bill and cross-defendants in appellants’ cross-bills, are not contesting this appeal. Therefore they will be referred to by name instead of as appellees. The essential facts out of which the questions to be decided arose are as follows: William Schild was largely indebted to the appellants as well as to appellees. He had also been indebted to Mrs. E. E. Wilkes. He had made her a deed absolute in form to his large landed property consisting of several tracts situated in this state, among which was Bentwood Place, consisting of about nine hundred acres. Schild later made said Bolin a deed of trust to all said property so deeded to Mrs. Wilkes, which he claimed he had a right to redeem from Mrs. Wilkes. By the terms of his deed he conveyed to said Bolin, as trustee, all said property with the power to employ attorneys to recover same from the said Mrs. Wilkes, and to advance and spend whatever money was necessary to that end, and to preserve the estate; and it provided that the proceeds of the property so to be recovered be devoted to the payment of the expenses incurred thereabouts; to the repayment of all moneys advanced necessary to carry out the trust; the payment of the indebtedness of appellee, Buckingham Dry Goods Company, and attorneys ’ fees incurred in recovering said property. And said debt, attorneys’ fees, expenses, and moneys advanced were made a charge by the terms of said deed -of trust upon said property which might be recovered. *75 Appellants, as creditors of said William Schild, filed their separate bills in the chancery court of Holmes county against said Schild and Bolin, setting out the amount of their respective claims against said Schild, and his nonresidence, as well as that of said Bolin, and prayed for and had attachments in chancery as provided for in sections 536 to 541, inclusive, Code of 1906 (Hemingway’s Code, pars. 293 to 298, inclusive), which attachments were levied upon said Bentwood Place. The defendants in those cases upon proper application had them removed into the Federal district court sitting at Jackson in the southern district of this state. The case of appellant, First National Bank of Canton was on its motion remanded to the chancery court of Holmes county upon the ground that the jurisdictional amount required by the Federal statute was not involved. Those three cases were still pending when this case was tried in the court below: that of appellant, First National Bank of Canton, in the chancery court of Holmes county; that of appellant’s Bank of Durant and People’s Bank of Durant in the Federal district court at Jackson in this state. Appellees John H. Poston and Buckingham Dry Groods Company, some time after appellants had brought their said bills, filed their bill in the chancery court of Holmes county against said William Schild and E. E. Bolin, trustee, and appellants claiming to be creditors for large amounts secured by said deed of trust on the entire estate of said William Schild, including the Bentwood Place, alleging that their lien or charge upon said estate for the payment of their claims was superior to that of appellants by virtue of their said attachments in chancery. Appellants answered said bill disclaiming any knowledge in their answers of the indebtedness claimed by appellees against said William Schild, and averring that if there was any indebtedness it had been fully paid off and discharged; that said deed of trust was entered into by the parties thereto to hinder, delay, and defraud the creditors of said William Schild, among whom were appellants; that said deed of trust was champertous, and *76 furthermore, that if any indebtedness was due from said William Schild to appellees secured by said deed of trust, such security was subordinate to the liens of appellants for the security of their indebtedness acquired by said attachments in chancery. To these cross-bills appellees demurred, which demurrers were sustained by the court, and said cross-bills dismissed, and appellants granted an appeal to settle the principles of the cause. (1) Appellants argued that this appeal granted under section 35, Code of 1906 (Hemingway’s Code, par. 10), to settle the principles of the cause, was authorized by Railroad v. James, 108 Miss. 656, 67 So. 152; Norris v. Burnett, 108 Miss. 378, 66 So. 748. It was distinctly held in Norris v. Burnett, supra, that under the statute in question the chancellor is authorized to grant an appeal from a decree sustaining a demurrer to a bill. And it was held in Railroad v. James, supra, that a typical case for granting an appeal from an interlocutory decree to settle the principles of the cause is presented where the defendant claims, and the chancellor holds, that the court is without jurisdiction to grant the relief sought by the suit. Bierce v. Grant, 91 Miss. 791, 45 So. 876, relied on by appellees, in so far as it sustains a contrary view, was expressly overruled in Railroad v. James, supra. We are of the opinion that under the statute the granting of this appeal was within the discretion of the chancellor, and that such discretion was not abused in its granting. (2) There appears to be little difficulty about the other question in the case; that is whether the chancery court on the original bill and the appellants’ answers and cross-bills should have assumed jurisdiction of the entire subject-matter for the purpose of adjudicating the conflicting claims and priorities of the parties with respect to said Bentwood Place, a part of the trust estate conveyed by said deed of trust, and which was levied on by appellants’ attachments in chancery for the purpose of enforcing the payment of their indebtedness. Neither the case of the appellant First National Bank of Canton, pending in the chancery court of Holmes county, nor of *77 the Bank of Dnrant or of the Peoples Bank of Durant, pending in the Federal district court at Jackson, is competent to settle these questions, because the necessary parties are not before the court in either of those cases. If appellants succeed in those cases, it will only mean that their indebtedness is established ag*ainst said William Schild, and that they have .liens on the Bentwood Place for the payment thereof by virtue of their attachments in chancery. The court in neither of those cases for the reason stated can determine the question as. to whether such liens are prior to that of appellees’.under said deed of trust. On the other hand in the present case all parties in interest as well as said deed of trust are before the court, and furthermore a court competent to adjudicate all of their conflicting claims and rights; in other words, a court competent to dispose of the whole subject-matter of the litigation. And in so doing the chancery court will not interfere with the jurisdiction of the Federal court in any manner whatever, because as stated the Federal court has not the necessary parties and subject-matter before it to adjudicate their respective claims and priorities. .It appears clear that the chancery court should have retained appellants’ cross-bills. If what they allege in said cross-bills be true, they are entitled to a decree for their indebtedness and a prior lien on the Bentwood Place to that of appellants for the payment of said indebtedness. On the other hand, if appellees should establish the allegations of their bill they are entitled to a decree- establishing their indebtedness as claimed, and a lien on said Bentwood Place for its payment, prior to that of appellants. In the meantime, if appellants should see fit to proceed with their said causes in the Federal court and in the chancery court of Holmes county, there can be no interference with the rights of the parties in this cause, because in those cases as stated the conflicting priorities claimed by the parties on the Bentwood Place for the payment of their respective claims cannot be adjudicated. Reversed and remanded.