Rejall v. Greenhood

MOBBOW, Circuit Judge, after stating the case as above, delivered the opinion of the court. The principal question to be determined is whether the appellant, upon the facts stated in his bill, is bound by the judgment recovered in the action in the state court, declaring the assignment of Green-hood, Bohm & Co.-to Max Kahn fraudulent and void, and canceling and setting aside the same. The general rule is that a judgment or decree is not evidence against one who is a. stranger to the proceeding; but to this rule there is at least one exception, and that is, in an action brought in hostility to a trust, — to set aside a deed or other instrument by which the trust was created, and to procure it to be declared a nullity, — the suit may be maintained without the presence of the beneficiaries, since the trustee represents all, and defends for all. A decree rendered in the suit binds them as effectually as if they had been made parties, and is conclusive against them. Pom. Code PI. § 357; Russell v. Lasher, 4 Barb. 232; Scudder v. Voorhis, 5 Sandf. 271; Rogers v. Rogers, 3 Paige, 379; Wakeman v. Grover, 4 Paige, 23; Winslow v. Railroad Co., 4 Minn. 313 (Gil. 230); [947] Chew v. Brumagen, 13 Wall. 497; Kerrison v. Stewart, 93 U. S. 155; Vetterlein v. Barnes, 124 U. S. 169, 8 Sup. Ct. 441; 2 Enc. Pl. & Prac. § 904. The pleas of the defendants in this case set up a judgment of this character' affirmed by the highest court in the state, and the plaintiff, being a beneficiary under the assignment, was bound by it. It is unnecessary to inquire into the regularity of the attachment proceedings in that case, since that question is disposed of by the judgment. The appellant claims further that the judgment of the state court only operated to set aside the assignment as to the bank ‘-'and other creditors not assenting thereto,” and (liat, claiming under the assignment, he has an interest in the surplus remaining after the satisfaction of the bank’s claim, and that such interest entitles him to maintain this suit. The appellant’s hill of complaint does not, however, proceed upon that theory. It does not seek to enforce appellant’s claim against the surplus. It charges that certain acts of the defendants were in violation of his rights under the assignment. These acts were the proceedings taken in the state court which resulted in the judgment set up in the plea. The complainant joined issue upon this plea, and the facts were found in favor of the defendants. The plea having met and satisfied all the claims of the bill, the defendants were entitled to the benefit of the finding in a decree dismissing the bill. Horn v. Dock Co., 150 U. S. 610, 14 Sup. Ct. 214. The decree of the circuit court dismissing the bill of complaint is therefore affirmed.