Arrowsmith v. Gleason

Mr. Justice Hablan, after stating the case, delivered the Opinion .of the court. *95 One of tbe grounds of demurrer was that the plaintiff had, upon his own showing, a plain, adequate and complete remedy at law, namely, an action of ejectment for the recovery of the lands in controversy. The statutes of Ohio, in force at the time Gleason was appointed guardian, as well.as when these lands were sold by him, provides that: “Before any person shall be appointed guardian of the estate of any minor, he ... . shall give bond, with freehold sureties, payable to the State of Ohio, . . . which bond shall be conditioned for the faithful discharge of the duties of said person as such guardian, and shall be approved by the court making such appointment.” Rev. Stat. Ohio, p. 671, Swan & Critchfield, 1860. The same statutes prescribe the mode in which, and the purposés for which, the real estate of a minor may be sold. They give power to the Probate Court, by which the guardian of the person and estate, or of the estate only, was appointed, upon the application by petition of such guardian, to order ■the sale of the minor’s real estate, whenever necessary for his education or.support, or for the payment of his just debts, or. for the discharge of any liens on his real estate, or when such estate is suffering unavoidable waste, or a better investment'of, the value thereof can be made; and, if it is satisfied that his real estate ought to be sold, then three freeholders must be appointed to appraise, under oath, its fair cash value. It is further provided: “ Seo. 27. Upon the appraisement of said real' estate being filed, signed by said appraisers, the court shall require such guardian to execute a bond, with sufficient freehold sureties, payable to the State of Ohio, in double the appraised value of such real estate, with condition for the faithful discharge of his duties, and the faithful payment and accounting for of all moneys arising, from such sale according to law. “ Sec. 28 [as amended by the act of February 15, 1867]. Upon such bond being filed and approved by the court, it shall order the sale of such real estate, . . . Provided, how ever, That if it is made to appear to such-Probate Court that it will be more for the interest of said ward to sell such real estate at private sale, it may authorize said guardian to sell, *96 either in whole or in parcels, and upon such- terms of payment as may be prescribed by the court; and in no case shall such real estate be sold at private sale for less than the appraised value thereof.” Rev. Stat. Ohio, 1 Swan & Critchfield (1860), 671, 672, 675 ; §§ 6, 22 to 28 inclusive; 1 S. & S. 883. It is evident that the bill was framed upon the theory: 1. That the bond given by the guardian at the time of his appointment was void, because' filed in violation of Gleason’s agreement with Hardy, and because it contained the name of but one surety; 2. The Probate Court was without jurisdiction, and its proceedings were absolutely void, because the guardian did not execute the additional bond required by the two sections last above quoted. If these propositions were sound it might be, as contended, that the plaintiff has a plain, adequate, and complete remedy at law. But we are of opinion that they cannot be sustained. As to the first one, it is clear that the delivery of the bond that Hardy signed, without procuring an additional surety, was a thing of which he, but not the plaintiff, may complain. Besides, the statute, upon any reasonable interpretation, does not require a bond with more than one freehold surety. The words “ with freehold sureties” are not to be taken literally, so as to- forbid the acceptance of a guardian’s bond, with one surety, having sufficient property to make it good for the entire amount prescribed by the statute. As to the suggestion that the proceedings in the Probate Court were void, because of its failure, upon the return of the appraisement, to require from the guardian an additional bond conditioned “ for the faithful discharge of his duties, and the faithful payment and accounting for of all moneys arising from such sale according to law,” we are of opinion that it is fully met by the decision of the Supreme Court of Ohio in Arrowsmith v. Harmening, 42 Ohio St. 254, 259. That was an action at law by the present appellant against Ilarmening’ to recover possession of the real estate now in controversy. The question was there distinctly made by him that the order of sale by the Probate Court was void, by reason of its *97 neglecting to take this additional bond. Adhering to its prior decision in Mauarr v. Parrish, 26 Ohio St. 636, the court held that, although the order of sale and the confirmation of the sales may have been erroneous, the Probate Court had jurisdiction of the subject matter, and of the parties, and its action, therefore, was not void. It further said that the decision in Mauarr v. Parrish had become a rule of property in Ohio, and could not be disturbed without consequences of a mischievous character. It is thus seen that the question now presented, as to the jurisdiction of the Probate Court to make the order for the sale of the lands now in controversy, and to confirm the several sales reported' by the guardian, has been determined adversely to the appellant in an action brought by him against the present appellees. As this construction of the local statute should, under' the circumstances stated by the Supreme Court of Ohio, be followed by the Circuit Court, we cannot approve the suggestion that the appellant has an adequate remedy by an action of ejectment for the recovery of these lands. But is the appellant without remedy for the wrong alleged to have been done him? We think not. If all the substantial averments of his ' bill are true — and, upon demurrer, they must be so regarded — he makes a case of actual fraud, upon the part of his guardian, in which Harmening to some extent participated, or of which, at the time, he either had knowledge or such notice as put him upon inquiry. According to these averments, there was no necessity whatever for these sales, at least for the sale of the east half of the southwest quarter of section thirty-six, township four north, range three east, in .Defiance County, containing eighty acres, or of the smaller tract in Paulding County, or of the four hundred acres in Defiance County that were sold in December, 1874- It is alleged, and by the demurrer it is admitted, that when the last sale was made, Gleason had in his hands unexpended, as Harmening well knew, large sums derived from the previous sales, as well as considerable amounts received from releases, of tax titles on lands held by appellant; and yet, by collusion with Harmening, and in order that the latter misrht eet the *98 lands for less than their value, he made the sale of the four hundred acres. But it is insisted that the Circuit Court of the United States, sitting in Ohio, is without jurisdiction to make such a decree as is specifically prayed for, namely, a decree setting aside and vacating the orders of the Probate Court of Defiance County. If by this is meant only that the Circuit Court cannot by its orders act directly upon the Probate Court, or that the Circuit Court cannot compel or require the Probate Court to set aside or vacate its own orders, the position of the defendants could not be disputed. But it does not follow that the right of Harmening, in his lifetime, or of his heirs since his death, to hold these lands, as against the plaintiff, cannot be questioned in a court of general equitable jurisdiction upon the ground ' of' fraud. If the case made by the bill is clearly established by proof, it may be assumed that some state court, of superior jurisdiction and equity powers, and having before it all the parties interested, might afford the plaintiff relief of a substantial character. But whether that be so or not, it is difficult to perceive why the Circuit Court is not bound to give relief according to the recognized rules of equity, as administered in the courts of the United States, the. plaintiff being a citizen of Nevada, the defendants citizens of Ohio, and the value of the matter in dispute, exclusive of interest and costs, being in excess of the amount required for the original jurisdiction of- such courts. ■ A leading case upon this point is Payne v. Hook, 7 Wall. 425, 430. That was a suit, in the Circuit Court of the United States for Missouri, by a citizen of Virginia, against a public administrator, to obtain a distributive share of an estate then under administration in a court of Missouri. It was. objected that the complainant, if a citizen of Missouri, could obtain redress only through the local '^Probate Court, and that she had. no better or different rights by reason of being a citizen of Virginia. But this court, observing that the constitutional right of the citizen of one State to sue a citizen of another State in the courts of the United States, instead of resorting to a state tribunal, would be worth. nothing, if the court in *99 which the suit is instituted could not proceed to judgment and afford a suitable measure of redress, said: “ Ve have repeatedly-held ‘ that the jurisdiction of the courts of the United States, over controversies between citizens of different States, cannot be impaired by the laws of the 'States which prescribe the anodes of redress in their courts, or which regulate the distribution of their judicial power.’ , If legal remedies are sometimes modified to suit the changes in the laws of the States and the practice of their coutts, it is not so with equitable. The equity jurisdiction conferred on the Federal courts is the same as that the High Court of. Chancery in England possesses; is subject to neither limitation or restraint by state" legislation, and is uniform throughout the different States of the' Union. The Circuit Court of tlie United States for the District of Missouri, therefore, had jurisdiction to hear and determine this controversy, notwithstanding the peculiar structure of the Missouri probate system, and was bound to exercise it, if the bill, according to the received principles of equity, states a'case for equitable relief. The absence of a complete and adequate remedy at law is the only test of equity jurisdiction, and the application of this principle to a particular casé must depend on the character of the case as disclosed in the pleadings.” • ' While there are general expressions in some cases apparently asserting a contrary doctrine, the later decisions of this court show that the proper Circuit Court of the United States may, without controlling, supervising, or annulling the proceedings of state courts, give such relief, in a case like the one before us,-as is consistent with the principles of equity. As said in Barrow v. Hunton, 99 U. S. 80, 85, the character of the case “ is always open to examination, for the purpose of determining whether, ratione materiae, the courts of the United States are incompetent to take jurisdiction thereof. State rules on. the subject cannot deprive them of it.” This whole subject was fully considered in Johnson v. Waters, 111 U. S. 640, 667. That was an original suit in the Circuit Court of the United States for the District of Louisiana! It was brought by a citizen .of Kentucky against citizens of *100 Louisiana. Its main object was to set aside as fraudulent and void certain sales made by a testamentary executor under the orders of a Probate Court in the latter State. It was contended that the plaintiff was concluded by the proceedings in ■ the Probate Court, which was alleged to have exclusive juris- . diction of the subject matter, and that its decision was conclusive against the world, especially against the plaintiff, a party to the proceedings. This court, while conceding that the administration of the estate there in question properly belonged to the Probate. Court, and that, in a general, sense, the decisions of that court were conclusive and binding, especially upon parties, said: “ But this is not universally true. The most solemn transactions and judgments may, at the instance of the parties, be set aside or rendered inoperative for fraud. The fact of being a party does not estop a person from obtaining in a court of equity relief against fraud. It is generally parties that are the victims of fraud. The Court of Chancery is always open to hear complaints against it, whether committed in pais or in or by means of judicial proceedings. In such cases the court does not act as a court of review, nor does it inquire into any irregularities or errors of proceeding in another court; but it will scrutinize the conduct of the parties, and if it finds that they have been guilty of fraud in obtaining a judgment or decree, it will deprive them of the benefit of it, and of any inequitable advantage Avhich they have derived under it” — citing Story’s Eq. Jur. §§ 1570-1513; Kerr on Fraud and Mistake, 352-353; Gaines v. Fuentes, 92 U. S. 10; and Barrow v. Hunton, 99 U. S. 80. So, in Raigal v. Wood, 1 Johns. Ch. 402, 406: “Belief is to be obtained not only against writings, deeds, and the most solemn assurances, but against judgments and decrees, if obtained by fraud and imposition. ’ To the same effect is Bowen v. Evans, 2 H. L. Cas. 257, 281: “ If a case of fraud be established equity will set aside all transactions founded upon it, by whatever machinery they may have been effected, and notwithstanding any contrivances by which it may have been attempted to protect them. It is immaterial, therefore, whéther such machinery and contrivances consisted of- a decree *101 of equity, and a purchase under it, or of a judgment at law, or of other transactions between the actors in the fraud.” See also Coldough v. Bolger, 4 Dow, 54, 64; Barnesly v. Powel, 1 Ves. Sen. 120, 284, 289; Richmond v. Tapleur, 1 P. Wins. 734, 736; Niles v. Anderson, 5 How. (Miss.) 365, 386. These principles control the present case, which, although involving rights arising under judicial proceedings in another jurisdiction, is an original, independent suit for equitable relief between the parties; such relief being grounded upon a new state of facts, disclosing not. only imposition upon a court of justice in procuring from it authority to sell an infant’s lands when there was no necessity therefor, but actual fraud in the exercise, from time to time, of the authority so obtained. As this case is within the equity jurisdiction of the Circuit Court, as defined by the Constitution and laws of the United States, that court may, by its decree, lay hold of the parties, and compel them to do what according to the principles of equity they ought to do, thereby securing and establishing the rights 'of which the plaintiff is alleged to have been deprived by fraud and collusion. The decree is reversed and the cause remanded, with di/rec-tions to' overrule the demv/rrers, to require the defendants to answer, and for further proceedings consistent with law..