Brown, Bros. v. Bank of Mississippi

Handy, J., delivered the opinion of the court. The appellants filed this bill in the Superior Court of Chancery, in April, 1843, claiming, as the holders of the bonds of the Bank of Mississippi to a large amount, and charging the directors of the bank with fraudulently using the assets of the bank for their individual benefit, and with wasting the same. Answers to the merits of the bill were filed in 1843, by the bank and several of the directors. In June, 1844, a supplemental bill was filed, stating, that in April, 1844, the complainants recovered judgment at law upon their claim against the bank, upon which the original bill was founded, and that execution thereon had issued, and had been returned “nulla bona.” Exceptions were taken to the answers of the defendants, and sustained; and upon a rule made upon them to plead, answer, or demur, two of them demurred; and Upon the hearing the demurrer was sustained; and upon motion made by the other defendants, the bill was dismissed for want of jurisdiction; and from that decree this appeal is taken. It is universally agreed, that a creditor cannot go into a court of equity to subject equitable assets or ehoses in action of his debtor to the payment of his debt, until he has first obtained a judgment at law upon his debt, and issued execution, and had a return of 11 nulla bona.” Farned v. Harris, 11 S. & M. 366. And the same rule is well-established with regard to a creditor proceeding to subject property alleged to have been fraudulently conveyed. [459] The only questions, therefore, which can arise in this case are, First. Whether the fact that a judgment was obtained before the dismissal of the bill, will sustain the jurisdiction; and, Second. If the jurisdiction was not conferred thereby, whether the objection to the jurisdiction could be entertained and the bill dismissed for want of jurisdiction, when the principal defendant had answered without insisting upon that objection. Upon the first point, we consider it to be the well-settled, general rule, that the facts which constitute the ground of a suit must exist at the time the suit is instituted; and if a material defect exists therein at that time, that it cannot be supplied by matters which have taken place since the institution of the suit, so as to maintain that suit. And it has accordingly been held, that if the original bill is wholly defective, it cannot be made the basis of a supplemental bill for matters which have subsequently taken place, nor can the defect be supplied by proof. Caudler v. Pettitt, 1 Paige, 168; Williams v. Brown, 4 Johns. Ch. R. 682. For the supplemental bill shows that the original bill was prematurely filed; and the proper course is for the complainant to dismiss that bill and file a new one. If the court had not jurisdiction of the case upon the facts as they existed when the original bill was filed, and as stated in that bill, there would be nothing on which the supplemental bill could be based; for that is a mere continuation of the suit originally and properly commenced. Upon the second point, the rule is equally well settled. The objection here goes to the jurisdiction. In a class of cases where a court of equity has jurisdiction, and is competent to give relief, a court of law also having jurisdiction; or where the jurisdiction has reference to the person, and the defendant appears and defends, without objection to the jurisdiction, by demurrer or answer, he will be taken to have waived it, and it cannot be insisted on at the hearing. The.cases cited from! Cow. 727, and 3 Grill & Johns. 504, are of this class. But it is held by all the authorities, that, if the bill shows a case not within the appropriate jurisdiction of a court of equity, the error is fatal in every stage of the cause, and cannot be cured by any waiver or course of proceeding by the parties. Story, Eq. [460] Pl. § 10; Barrett v. Oliver, 7 Gill & Johns. 207; 3 Dessaus. 6; 2 Hill, (N. Y.) 159. For if consent cannot confer jurisdiction of the subject-matter, a mere negative act of waiver cannot have that effect. And whenever the court discovers that it has not jurisdiction to grant relief upon the case as made by the pleadings, it is its duty to dismiss the bill. The case of Brinkerhoff v. Brown, 4 Johns. Ch. R., is strongly analogous to the present case, and fully sustains the propriety of the decree dismissing the bill. Let the decree be affirmed.