Nelson F. Shelton, Appellant, v. Clayton Tiffin and Lilburn P. Perry, 6 How. 163

Mr. Justice McLEAN delivered the opinion of the court. This is an appeal in chancery from the Circuit Court for the Eastern District of Louisiana. On the 10th of April, 1838, the complainants below sold to one Samuel Anderson a plantation and negroes situated in the parish of Madison, Louisiana, for seventy-five thousand dollars. Thirty-five thousand dollars of this sum were paid in part by surrendering a note which Anderson held against Lilburn P. Perry, the complainant, and his father, John M. Perry, for thirteen thousand dollars; and by the assignment-of a note on H. R. Austin, J. B.

Ragan, and Wylie Bohannon, of the State of Mississippi, for eighteen thousand two hundred eighty-two dollars and sixty-five cents, payable to Samuel Anderson on the 1st of April, 1839. A mortgage was executed on the plantation and slaves, to. secure the payment of forty-thousand dollars, the residue of the purchase-money. At the same time, three notes or bonds were executed to Lilburn P. Perry by Samuel Anderson, each for the sum of thirteen thousand three hundred and thirty-three dollars, payable on the first day of January, 1842, 1843, and 1844.

On the 11th of January, 1839, Mosely and Bouldin, citizens of Virginia, instituted a suit in the Circuit Court against L. P. Perry and John M. Perry, and obtained a judgment against them for seven thousand five hundred dollars. An execution was issued, in virtue of which, under the laws of Louisiana, the marshal levied upon the three notes above stated and the mortgage, which were sold by him, on a credit of twelve months, to Samuel Anderson, the mortgagor, for five thousand dollars. Some time after this purchase, Robert Anderson, the father of Samuel, and Nelson F.

Shelton, his uncle, having procured a judgment against Samuel Anderson in the State court of Louisiana, sold the mortgaged property and slaves, and they became the purchasers thereof and have the possession of the plantation and slaves under the purchase, claiming that the mortgage by Anderson to Perry has been extinguished. The decree of the Circuit Court was entered against Samuel Anderson, Robert Anderson, and Nelson .F.

Shelton et. al., that-within sixty days they should pay to the complainants forty thousand dollars, with interest from the first day of January, 1842, and in default of such payment that they should deliver to the complainants the possession of the plantation and slaves. From this decree Shelton only has appealed. The defendants pleaded that the Circuit Court had no jurisdiction of the case, as Mosely and Bouldin, Robert Anderson, and Shelton were citizens of Virginia, and the complainants were citizens of Missouri. Shelton being the only appellant, the objection of citizenship must be limited to him.

Under the act of Congress, jurisdiction may be exercised by the courts of the United States “ between a citizen of the State where the suit is brought, and a citizen of another State.” “ But no person shall be arrested in one district for trial in another, in any civil action.” If Shelton be not a citizen of Louisiana, haying raised the question of jurisdiction by a plea, this suit cannot be sustained against him. In the declaration or bill an allegation of citizenship of the parties must be made, as it has been held that an averment of residence is insufficient.

But- the proof of citizenship, when denied, may be. satisfactory, although all the privileges and rights of a citizen may not be shown to have- been-claimed or exercised by the individual. Shelton and wife, they having no children, became residents of Louisiana in the fall of 1840, more than two years before the commencement of this suit. Since their residence commenced, they have been absent from the State only onee, a short time, on a visit to a watering-place in Mississippi.

They have resided the greater -part of the time .on the plantation in controversy, cultivating and improving it by the labor of the slaves. Within this time,- a more comfortable and secure dwelling-house has been constructed. In the winter of 1840 or 1841, Shelton observed to a Witness, that he considered himself a resident of the State of Louisiana. There is no proof that'he has voted at any election in Louisiana, or served on a jury.' At one time he refused to vote, but that was after'this Suit was commenced.

Some-of the witnesses say that he sometimes spoke of returning to Virginia; whether on a visit or to-reside there permanently does qpt appear. ■ ■ Where an individual'has resided in a. State for'a considerable ■ timé', being engaged in the prosecution -of business, he may ■well be presumed.-to be a citizen of such State, unless the contrary appear/ -And this presumption is strengthened where the individual lives on a .plantation and cultivates it with a large-force, as in the . case of Shelton, claiming ánd improving the . property as his Own. .

On a change of domicile from' one State to another, citizenship may depend upon the intention of the individual. But this intention may’be shown more satisfactorily by acts than declarations. An exercise of the right of suffrage is conclusivé on the subject;- but acquiring'a right of suffrage, accompanied by acts which show a permanent location, unexplained-, may be sufficient. The facts proved in this case authorize the con-, elusion, that Shelton was a citizen of Louisiana, within • the act of Congress, so as to- give jurisdiction to the Circuit Court.

The defendants also demur to the plaintiff’s bill, on the ground, that the complainants have plain and adequate relief at law. . The demurrer' is clearly unsustainable. Fraud is alleged in the bill, and relief is prayed against a judgment and a judicial sale of the property in controversy. These and .other matters stated in the bill show, that, if the complainants shall be entitled to relief, a court of equity only can give it. The great question in the case arises out of the judicial sale of the mortgage debt to Anderson, the mortgagor, under a judgment. obtained by Mosely and Bouldin against L. P.

Perry and John M. Perry. If'by this sale the mortgage debt has been extinguished, no relief -can be given to the complainants. Had the Circuit Court which rendered that judgment jurisdiction of the case ? The plaintiffs were citizens of Virginia, John M. Perry was a citizen of Louisiana, andJU P. Perry, of Missouri. No process was served upon- L. P. Perry, nor does it appear that hé had notice of the suit until long after the proceedings were had, Biff there was an appearance by counsel for the defendants, ¡and defence was made to the action.

This being done by a regularly practising attorney, it affords prim'd fade evidence, at least, of ah appearance in the suit by both the defendants. Any individual may waive process, and appear voluntarily. John M. Péiry acted in some matters as the agent of L. P. Perry; but it does not appear that. he had authority to waive process and delend the suit. And Crawford, the attorney, testified, that “ he had no recollection of having received any authority directly Or indirectly from L. P. Perry, or from any one in his behalf, to defend the suit. He received a letter from John M.

Perry, informing him that he would see upon the records of the court of the United States a suit commenced against him and others by Mosely and Bouldin, and he wished to employ him to defend it.” And he says, that “ he regards his appearance on behalf of any other person lhan John M. Perry in said suit as an inadvertence on his part.” This evidence does .not contradict the record, but explains it. The appearance was the act of the counsel, and not the act of the court. Had the entry been, that L. P. Perry came personally into court and waived process, it could not have, been controverted.

But the appearance by counsel who had no authority to waive process, or to defend the suit for L. P. Perry, may be explained. An appearance by counsel under such circumstances, to the prejudice of a party, subjects the counsel to damages; but this would not sufficiently protect the rights of the defendant. He is not bound by the proceedings, and there is no other principle which can afford him' adequate protection. The judgment, therefore, against L. P. Perry must be considered a nullity, and consequently did not authorize the seizure and sale of his property.

An execution' sale under a fraudulent judgment is valid, if the- purchaser had no knowledge of the fraud. But in this ease L. P. Perry was not amenable to the. jurisdiction of the court, and did no act to authorize the judgment. He cannot, therefore, be affected by it, .or by.any proceedings under it. In this view, it is unnecessary to--consider the objections to the procedure under the execution. The debt of forty thousand dollars was sold as the property of L. P. Perry; when one of the notes had been assigned to Tiffin, and an equal interest in. the other two belonged to him.

Of this, Anderson, the purchaser, had notice. It ..would be difficult to. sustain- this sale on legal principles. Anderson, it is insisted, at the marshal’s sale, purchased a “litigious right,” and by

article 2622 of the Civil Code, “he, against whom a litigious'right has. been transferred may be released by paying the transferee the real price of the transfer, together with interest from its daté.” The judgment being void for want of jurisdiction in the court, no right passed to Samuel Anderson under the marshal’s sale; consequently the mortgage remains a subsisting lien. ■ Nor' is this lien affected by the mortgage subsequently executed by Samuel to his father, Robert Anderson, and his uncle, Shelton.

After the mortgage to the complainants was supposed to. be extinguished by the judicial sale, Robert Anderson and Shelton procured in a State court a foreclosure of their mortgage which had been previously given on the plantation and slaves, and they became the purchasers at the -sale for thirty-six thousand dollars. If this procedure were bona fide, the purchase was made subject to die prior mortgage. On the 23d of November, 1839, a bill was filed in the District Court for the parish of Madison, by L. P.

Perry, against Samuel Anderson, representing the debt due, secured by mortgage, and that he was in possession of the plantation and slaves;. and,, fearing that he might remove the slaves or other property, an. attachment was prayed. No service was made of this writ, and the suit was discontinued, the 28th of November, .1839.

A judgment seems to have been irregularly entered by default, the 17th of November, 1840, and on the next day an answer, was filed by Anderson, setting up the sale and extinguishment. of the mortgage debt, and praying that the notes and mortgage might be decreed as extinguished, and be delivered up. . After-wards, on the 20th of May, 1841, this suit was dismissed by the order of the court.

And on the 19th. of May, 1842, motion having been previously, made and argued in the District Court, on proof that “ the defendant, Samuel Anderson, since the institution of this suit has become the true and legal owner of the three notes sued on, and the indebtedness set forth in-plaintiffs petition having been extinguished by confusion, the court decreed that they should be delivered up.” And this, decree is relied on as a bar to the present suit. .

At the time the above decree was made, this suit was pending in the Circuit Court, to enforce the payment -of the .notes directed to be given up by the District Court. The object of the petition before that court was not the recovery of the money, for the notes were not due when it was filed, but to prevent Samuel Anderson from removing the negroes, wasting the crops, &c., on.the plantation; But this petition had been, discontinued'for more than a year, when Anderson filed his answer, setting up his purchase of the notes under a judicial sale, and that the mortgage debt was extinguished.

And on this case, made in the answer in no way responsive to the petition, which had long before been abandoned, the parish judge, on motion, founded his decree. that the mortgage debt was extinguished, and directed the notes to be delivered up. It is difficult to characterize in proper terms this. proceeding of the State court. The petition having been abandoned, there was no pretence of jurisdiction for the subsequent steps taken .at the instance of Anderson. There was nothing in the petition, had it not been abandoned, which would liave authorized such a procedure.

The circumstances under which this judicial action was had show a fraudulent contrivance, on the part of Anderson, to defeat his adversaries by the interposition of the State court. The whole case was pending in the Circuit' Court of the United States,-and this interference of the . State court was wholly unauthorized and void.. The Mississippi note for eighteen thousand two hundred and sixty-five dollars, which was assigned to complainants in part payment of the purchase-money, was worthless.

The parties to it were insolvent when it was assigned to the complainants, which fact was known to the assignor, Samuel Anderson. Ele acted, fraudulently in representing the note to be good, when he knew it was valueless. By his own confession, after the assignment, the fraud is established. ' It is insisted, that, this note having been imposed upon the complainants as a good note, by the fraudulent representartion of Anderson, they as vendors have an equitable, lien on the plantation and slaves for the amount of it.

If the receipt of á note of a third person in payment of the purchase-money be a waiver of ¿n equitable lien on the real estate conveyed, yet it would seem, where a fraud had been practised in .the assignment of the note, there would be no waiver: But however this may be, it is not strongly urged, as it is believed that the mortgage debt, with the interest, will be nearly equal to the .value of the plantation. ■ The history of this case shows a successful course of fraudulent combination, rarely exhibited in a court of justice.

Samuel Anderson purchased the plantation and slaves of the compláinant, for seventy-five thousand dollars. He gave up a nóte on L. P. Perry for thirteen thousand dollars, which "was in fact the only payment of any value. The Mississippi note was . worthless, and thé mortgage debt he purchased, on a credit of twelve months, for five thousand dollars. . He must have received more than that sum as the product of the plantation. So that in fact .he acquired the plantation and negroes for thirteen thousand dollars, which he purchased at. seventy-five thousand dollars.

By this operation he saved of the purchase-money sixty-two thousand dollars. Such a result must strike every one as having been procured through fraud,. It is unnecessary to consider the means through which Robert Anderson, the father of Samuel, and his uncle Shelton, acquired title to the above property. The lien of the complainants’ mortgage is paramount to any title or lien which they assert. No deduction will be made from the mortgage for the five thousand dollars which' Samuel Anderson may have paid to Mosely and Bouldin, under whose judgment he purchased the mortgage debt.

He has received from the products of the plantation, while in possession of it, more than that sum. But if this were not the case, his fraudulent act in the transfer of . the Mississippi note is a sufficient ground for the refusal of the credit. In their decree, 'the Circuit Court directed the sum of forty thousand dollars to be paid, with interest from the first day of January, 1842. In this the court erred.

The three notes were, each for thirteen thousand three hundred and thirty-three dollars ; the first being payable the first, of January, 1842, the second, the first of January, 1843, and the third, the first of January, 1844. The interest should have béen calculated bn the notes from the time they respectively became due. With this modification of the decree of the Circuit Court, a decree will be -here entered, to. be transmitted to the.

Circuit Court, and if the money shall not be paid within ninety days from the filing of this'decree in the Circuit Court, the mortgage shall be foreclosed, and the complainants put in possession of the property. Order. This cause came on to be hekrd on the transcript of the record from the Circuit Court of the United States for the District of Louisiana, and was argued by. counsel.

On consideration whereof, it is the opinion of this court, that the said Circuit Court erred in directing the interest to be computed on the ' ($ 40,000)'forty thousand dollars from the first day of January, 1842, instead of computing the interest on each of the three several notes for ($ 13,333-3-) thirteen thousand three himdred and thirty-three dollars and thirty-three and a third cents from the times the said notes respectively became due; and that if the money shall not be paid within ninety days from the filing of the mandate of this court in the said Circuit Court, that then the said' mortgage shall be foreclosed, and the complainants put in-the possession of the property, and that in that case the equity of redemption therein be for ever barred and precluded; and that if the-said money, with interest as aforesaid, be duly paid as aforesaid, that then the said mortgage should be held discharged, and Nelson F.

Shelton put in possession of the said property. Whereupon it is now here ordered, adjudged, and decreed by this court, that the decree of the said Circuit Court in this cause be and the same is hereby reversed, that each party pay his own costs in this court, and -that this cause be and the same is hereby remanded to the said Circuit Court, to be proceeded with in conformity to the opinion of this court, and’as to law and' justice shall appertain.