Hollins v. Brierfield Coal & Iron Co.

Citations

• 150 U.S. 371
• 14 S. Ct. 127
• 37 L. Ed. 1113
• 1893 U.S. LEXIS 2386

Syllabus

<p>The trustee.of a mortgage upon the real estate of an Alabama corporation commenced a suit in the Circuit Court of the United States for the foreclosure of the mortgage. In his bill he set up that some stockholders were liable for unpaid assessments on their stock, and', while asking for a foreclosure of the mortgage and sale of the property, he prayed that other creditors of the corporation might be permitted to intervene and become parties, and have their claims adjudicated, and that a full .administration be had of the estate. About three months after the commencement of that suit, a contract creditor, who had not reduced his claim to,, judgment, filed his bill in equity in the same court, suing for his’own ■ benefit and that of all creditors who should become parties, asking .to have the mortgage declared void, to have the property sold, and the proceeds applied to the payment of the debts of the creditors, parties to the suit, and for a liquidation. • The plaintiff in the second suit did not intervene in the foreclosure suit. In due course a decree was entered in the foreclosure suit for the sale of the property, The court then entered a decree dismissing the3 creditor’s bill upon the merits. Held, That this was error, and that the bill should have been dismissed for want of jurisdiction.</p> <p>Simple contract creditors of a corporation, whose claims have, not been reduced to judgment, and who have no express lien on its property, have no standing in a Federal court of equity, to obtain the seizure of their debtor’s property, and its application to the payment of their debts..</p> <p>This rule is not affected by the fact that a statute of the State in which’ tile property is situated, and in which the suit is brought, authorizes such a proceeding in the courts of the State, because the line of demarcation between equitable and legal remedies in the Federal courts pannot be obliterated by state legislation.</p> <p>This rule is not affected by the fact that wh