Rice v. Adler-Goldman Commission Co.

CALDWELL, Circuit Judge, after stating the case as above, delivered the opinion of the court. The issue of fact arising upon the first paragraph of the intervening petition was tried by the court, and found against the petitioners. This finding is conclusive. The demurrer to the second and third paragraphs was properly sustained. The complaint in the action brought by the defendant in error against Loewen shows the amount in controversy was over $5,000. Assuming, but not deciding, that the jurisdictional averment as to the citizenship of the defendant in error is technically insufficient, the validity of the judgment is not affected thereby. “If the record fails to show the facts on which the jurisdiction rests,— as, for instance, that the plaintiff and defendant are citizens oí different states, or, where the plaintiff sues as assignee, that his assignor might have maintained the suit, — the judgment may be reversed for error upon a direct proceeding for that purpose, but it is not void, and cannot be attacked collaterally.” Skirving v. Insurance Co., 8 C. C. A. 241, 59 Fed. 742, and cases cited. There is no suggestion in the intervening petition that Loewen, the defendant in the attachment suit, did not owe the defendant in error the sum claimed in its complaint. Fraud and collusion cannot be predicated upon the fact that a debtor consented to a judgment for a debt which he honestly owed. Nor is it a fraud for a debtor to consent to a judgment in favor of one of his creditors, and deny that favor to all others. In the absence of a bankrupt or insolvent law, a debtor may lawfully pay or secure one creditor to the exclusion of all others. The preference may be given in many ways, but most commonly it is accomplished by paying the debt in money, or by the debtor’s selling or mortgaging his property to his creditor, or by confessing a judgment in favor of his creditor, followed by execution and a levy upon the debtor’s property. The validity of the preference is not affected by the fact that it was accomplished quickly or secretly in order to prevent the interference of other creditors. In Arkansas it is not open to the interveners to contest the grounds of the attachment, whether they are confessed or denied by the defendant in the attachment. A statute of that state provides that: “Any person may, before the sale of attached property, or before the payment to the plaintiff of the proceeds thereof, or of any attached debt, present his, complaint, verified by oath, to the court, disputing the validity of the attachment or stating a claim to the property, or an interest or lien on it under any other attachment or otherwise, and setting forth the facts upon which such claim is founded, and his claim shall be investigated.” Sand. & H. Dig. § 372. Construing this statute, the supreme court of the state, speaking by Chief Justice Cockrill, say: “The object of letting the second attacher into the suit of the first is declared in section 358, supra, to be to enable him to procure ‘such order as may be necessary to protect his rights.’ ' Ño new right is conferred upon him by the statute, but only a privilege granted of availing himself of the new and expeditious remedy provided for the protection of whatever right he may have acquired by suing out his attachment. It cannot with pro [153] prlely be contended that the intervener is let in for the purpose of defending- the suit and disputing the grounds oí attachment in lieu of the defendnrt, although that might be an efficacious method of invalidating .the atGicltinem. That would involve the practice in manifold difficulties, and even in legal absurdities, without any nearer approach to substantial justice. Sneli a practice prevailed at.an early day in Massachusetts, under a statute expressly conferring- upon the intervener the right to defend for the defendant, whether the latter desired it or not; but it was abolished a long time igo, after condemnation by tlie courts in severe terms. Baird v. Williams, IS) Pick. 3S1. The intention to entail like evils upon our practice cannot be found in any of the provisions of the statute, and it would require a clearly.'xiuessed intention to induce us to conclude that such was the legislative design.” Sannoner v. Jacobson, 47 Ark. 41, 14 S. W. 458. The construction placed upon this statute by the supreme court of the stale is binding on this court. “The decisions of the supreme ■court of the state construing and applying its attachment laws are rales of decision in this court in like cases coming from that state.” People’s Sav. Bank & Trust Co. v. Batchelder Egg-Case Co., 2 C. C. A. 26, 4 U. S. 63. App. 603, 51 Fed. 130. It is needless, therefore, to infislre what the law upon the subject in other states may he. For an defended discussion and citation of authorities upon the subject, see Cannoner v. Jacobson, supra. The judgment of the circuit court is affirmed.