69 U.S.

191
17 L.Ed. 839
2 Wall. 191

CHITTENDEN ET AL.
v.
BREWSTER ET AL.
December Term, 1864

THIS was an appeal from a decree of the Circuit Court for the Northern
District of Illinois.
The suit was a creditor's bill filed against a judgment debtor and his
assignees, the defendants in the case, to set aside an assignment made by
the debtor to hinder and delay creditors. The assignment was made on the
4th of November, 1857, to Brewster and Clark, two of the defendants, and
purported to convey to them all the property, real and personal, of the
debtor, in trust, to convert the same into money, either at public or private
sale, and pay certain preferred creditors named. The judgment debtor
made no defence. The assignees put in a joint answer, and after requiring
the complainants to make proof of their judgments and executions as
charged in their bill, set forth, among other grounds of defence, that, after
the filing of the bill below, a bill in chancery had been filed against them
in one of the State courts, in behalf of other creditors of the judgment
debtor. praying for the appointment of a receiver to take possession and
charge of the property conveyed by the assignment, and that the trusts
therein created be carried into effect; and that, upon the filing of the bill in
the State court, and after hearing the motion for a receiver, the motion was
granted; and that they had afterwards, in pursuance of the order of the
State court, transferred and set over to the said receiver, one Mitchell, all
the property, real and personal, that had come to their hands.
To this answer a replication was filed, and the parties went to their proofs.
There was no evidence that, on the application in the State court for a
receiver, which was made on the alleged ground of faithless execution of
the trust, the assignees had made opposition. They had done nothing but
acknowledge service on themselves of the notice of the intended motion
for a receiver; employ a solicitor to enter an appearance for them, and to
give their assent to the hearing of the motion at the February Term of the

court, then at hand. The State court accordingly granted the prayer of the
bill before it, and appointed a receiver, one Mitchell, in the case. But no
fraud was proved nor specifically alleged on the part of the assignees in
any part of the proceeding.
The bill below was taken, as confessed, by Brewster, the debtor, and
dismissed as to two other defendants; and the court, after hearing the case
on the pleadings and proofs, declared the assignment fraudulent, and set it
aside, and appointed a receiver, one Moulton, and directed the judgment
debtor to assign and transfer in writing to him all his property, real and
personal; and further, that Brewster and Clark, the assignees, should
assign and transfer in writing to him all the property and effects of every
description that came into their hands by the assignment of the 4th of
November, 1857, except such property and effects so assigned to them,
which have, since the service of process in this suit, been transferred to
Mitchell, the receiver, under the proceedings had in the State court, and
which was set forth in the answer filed by them. From this decree the
complainants appealed to this court, the ground being essentially that the
proceeding in the State court should have been treated as an interference
with the Federal jurisdiction previously acquired.
In order to understand this question of priority, it is necessary here to say
that the bill in the Circuit Court was filed on the 4th of January, 1858; the
subpoena served on the defendants on the next day; and their appearance
entered on the 1st of February following. The bill in the State court was
filed on the 1st of February, 1858, and the subpoena served on the 20th of
the same month. The receiver was appointed afterwards on notice. The
evidence did not show that the defendants conveyed the effects of the
judgment debtor in their hands to the receiver, but the fact was apparently
assumed both by the counsel and the court below, and no point upon it
was made by the court here.
Mr. E. S. Smith for Chittenden et al., appellants: The law is settled, that
courts of different but of co-ordinate jurisdiction, cannot interfere with
each other, either in process, person, or property, to prevent the first
jurisdiction, which attaches or takes cognizance of the subject-matter in
dispute, from determining the case conclusively. Now the law of lis
pendens we assume to be equally settled. We assume that filing a bill in a
court of equity and service of process is notice to the world of all the
rights claimed by the complainant as set up in his bill. It was thus decided
so long ago as in decisions reported by Vernon,1 and it has been confirmed
by many since.

Consider the action of the parties to the proceeding in the State court.
Soon after the service of process in this case, the parties appear in the
State court, on the first day of February, 1858, and a bill is filed by
somebody, charging the assignees with neglect of duty. The assignees
receive service, submit to the charge, and in fact, though not in form,
confess a decree. They deliver without resistance to Mitchell the property
and effects, to be taken to himself, under the assignment. When the
assignees did this, they knew the fact of the proceedings by the appellants
in the Federal court, to set aside the assignment, and subject the property
to the payment of other judgments. If property, situated as the estate in
this case was, can, by a proceeding in another jurisdiction, after right and
lien had attached, be taken absolutely from the court, then proceedings by
judgment creditors in the Federal court, after exhausting their remedy at
law, are valueless. It will be impossible for a man to suggest a case, where
the debtor, with the aid of a friendly creditor, could not concoct a
proceeding to defeat every action by judgment creditors in courts of
equity. Before a receiver could be appointed and take possession of the
effects, such a proceeding, as the record in this case shows, could defeat
the justice of the court. Notice for an injunction can be postponed; time
will elapse before a receiver can be appointed. Assignees refuse or neglect
to deliver over, and before that is done, an order comes from another
jurisdiction, requiring the assignees to deliver the effects to another, who
is appointed ostensibly to carry out the trusts. This order the assignees
comply with, and thereby arrest the proceedings, because the property
could not be reached; leaving the creditor powerless and his debt lost.
Such proceedings cannot be tolerated by courts of justice. The rights of
parties should not be subjected to schemes which might defeat the ends of
justice, nor should parties, who use a court of justice in such a manner as
these defendants stand under suspicion of having used one of those of the
State of Illinois, go unpunished.
Mr. Washburne, contra, for the assignees: There is no evidence in the
record showing that appellants acquired a prior lien. It does not appear
they ever sued out executions upon their judgments or placed such
executions in the hands of the marshal, or had any return made thereon.
The obtaining of a judgment, suing out of execution, and a return of nulla
bona are indispensable prerequisites to the establishment of a prior
equitable lien.2
If the appellants acquired a prior equitable lien by the filing of their bill of
complaint, they lost the same by the superior diligence of the
complainants in the State court. The lien obtained by the filing of a
creditor's bill is an inchoate one, which may be perfected by the

appointment of a receiver, and may be displaced by the superior diligence

of other creditors in perfecting similar liens. It is urged that the court
below should have treated the proceedings of the State court as fraudulent
and void; but it will be noticed that there was neither allegation nor proof
of fraud in the case.
If the appellants had a superior lien upon the property in the hands of the
receiver appointed by the State court, the proper mode of enforcing that
lien was for the receiver of the court below to intervene in the State court
by petition, pro interesse suo, where the lien, when established, would
have been recognized and duly enforced. Upon establishing the right of
the receiver of the court below to the property in the hands of the receiver
of the State court, in the mode indicated, the State court would have
ordered its officer to deliver the property over to the officer of the United
States court. The court below declared the assignment void, appointed a
receiver, and compelled the defendant, Brewster, to assign all his interest
in the property. This was all the court could do; it could not order the
assignees to deliver over property not in their hands, and which they had
already delivered to the officer of the State court under its order.
Mr. Justice NELSON delivered the opinion of the court.

It does not appear from the proofs in the case, that executions had been issued,
and returned unsatisfied, as averred in the bill, and for the proof of which the
answer of defendants called; and it is objected by the counsel for the appellees
that this defect is fatal to the right of the complainants to maintain their bill.
This would be so, if the appellees, against whom the decree was rendered, had
appealed from the same, as in the case of Jones v. Green.3 See also, Day et al.
v. Washburn et al.4 But here the complainants only have appealed, and the rule
is settled in the appellate court, that a party not appealing cannot take
advantage of an error in the decree committed against himself, and also, that the
party appealing cannot allege error in the decree against the party not
appealing.5 If the appellees desired to avail themselves of this error in the
decree, they should have brought a cross appeal. By omitting to do so, they
admit the correctness of the decree as to them. The case stands before the
appellate tribunal the same as if the error had been waived at the hearing.

This brings the case down to the question as to the effect to be given to the suit
in the State court; and to the order of that court appointing a receiver, and
directing the defendants to assign and set over to him all the effects of the
judgment debtor in their hands, under his assignment of the 4th of November,

1857.
3

The bill in the Circuit Court of the United States, to set aside the assignment to
these defendants as fraudulent against creditors, was first filed, and
consequently operated as the first lien upon the effects of Brewster, the
judgment debtor.

We agree that the defendants, as bailees and trustees of the property intrusted to
their care and management for the benefit of the creditors of Brewster, were
responsible only for common or ordinary diligence, such as prudent men
exercise in respect to their own private affairs. But this degree of diligence the
law exacts, and the courts of justice are bound to enforce. When, therefore, the
bill was filed against them by the judgment creditors in the Circuit Court of the
United States, to set aside the assignment as fraudulent, it was their duty,
arising out of their acceptance of the trust, to appear and defend the suit, as they
have done, and protect their title to the fund in controversy, so far as the nature
of the transaction and the facts and circumstances of the case would admit or
warrant. Their whole duty appears to have been discharged in this respect, and
we perceive no ground of complaint against them. But, this duty was equally
incumbent upon them in respect to the suit in the State court. They should have
appeared and defended that suit; and, in addition to the defence on the merits,
that is of their faithful execution of the trust, which was impeached by the bill,
they should have set up the pending proceedings against them in the Federal
court, which tribunal had first acquired jurisdiction over them, and over the
fund in dispute, and were entitled to deal with it, and with all questions growing
out of the relations existing of debtor and creditor of the parties concerned.
Instead, however, of pursuing this course, no defence, as appears, was set up by
the defendants to the suit; no answer filed, nor even opposition made to the
motion for the appointment of a receiver. The only part they seem to have taken
in the proceedings is, besides acknowledging service of the notice of the motion
for a receiver, the solicitors entered their appearance in the cause, and gave
consent that the motion might be made at the then February Term of the court.
It was at once made, and the receiver appointed and gave the requisite security.

Now, we think, here was a clear omission of duty on the part of the defendants,
as trustees and bailees of the property in question, and for which they should
have been held personally responsible. They should have appeared and
defended the suit in the State court, and set up the pending proceedings in the
Federal court, which was a complete answer to the jurisdiction of the former;
and if this defence had been overruled, a remedy existed by a writ of error to
this court, under the 25th section of the Judiciary Act.

The court below, therefore, erred in excepting from the transfer of the effects of
the judgment creditors in the hands of the defendants to Moulton, the receiver,
the property and effects transferred to Mitchell, under the order of the State
court. For this error, the decree of the court below must be reversed, and the
cause remanded to the court below, with directions to proceed on the same in
conformity with this opinion; but liberty is given to the defendants to require
proof before the court of the issuing of executions and return unsatisfied, as
averred in the bill of complaint.6

DECREE, ETC., ACCORDINGLY.

1 Vernon, 318.

Jones v. Green, 1 Wallace, 330.

1 Wallace, 330.

24 Howard, 355, 356.

Kelsey v. Weston, 2 Comstock, 505; Norbury v. Meade, 3 Bligh, 261; Mapes v.

Coffin, 5 Paige, 296; Idley v. Bowen, 11 Wendell, 227.

Levy v. Arredondo, 12 Peters, 218; Marine Insurance Company v. Hodgson, 6

Cranch, 206; Mandeville v. Burt, 8 Peters, 256-7.