Hoffman v. Knox

50 F. 484, 1 C.C.A. 535, 1892 U.S. App. LEXIS 1250
CourtCourt of Appeals for the Fourth Circuit
DecidedMay 24, 1892
DocketNo. 3
StatusPublished
Cited by14 cases

This text of 50 F. 484 (Hoffman v. Knox) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hoffman v. Knox, 50 F. 484, 1 C.C.A. 535, 1892 U.S. App. LEXIS 1250 (4th Cir. 1892).

Opinion

Fuller, Circuit Justice,

after stating the facts, delivered the opinion of the court.

By the decrees of September 8 and October 14, 1887, all claims against the property in question, and the order of their priority, and the exceptions to the various reports, were disposed of, and the then final report of the master, as amended and reformed in accordance with the views of the court, was approved and confirmed, and thereupon commissioners were appointed to sell the entire property upon the terms of 'one fourth cash, and the balance payable in one, two, and three years, with [489]*489Interest from the date of sale, with security. The sale thereupon took place and was confirmed May 26, 1887, and distribution made of the cash payment, and a final settlement with the receiver was directed. It seems to us that these decrees were and must be regarded as constituting a final decree in the case. We treat them together because the decree of September 8th, while it disposed of nearly all the claims and exceptions, reserved the determination of a specific claim or claims, which was arrived at by the adjudication of October 14th, and it was the latter, which, ail these matters being concluded, decreed the sale. If an appeal had been taken by the present appellees to the supreme court of the United States, and the decree had been affirmed, the court below would have had nothing to do but to execute the decree which it had already entered. What remained to bo done was merely in execution of what been determined, such as the collection of the outstanding payments,, settling the receiver’s accounts, payment of costs, and the like; and this if' no less so because some other creditor might turn up, and seek to come in under the decree. The bringing of the fund into court was for the final distribution as decreed, and not to he held pending the ascertainment of the prineinles upon which it should he distributed. Hill v. Railroad Co., 140 U. S. 52, 11 Sup. Ct. Rep. 690; Bank v. Sheffey, 140 U. S. 445, 11 Sup. Ct. Rep. 755. The petition for rehearing presented May 8, 1889, came too late. Equity rule 88, The qircuit court held, however, that the petition could be treated'as, and in fact was, a bill of review for errors apparent, and might bo filed as such. Considered in Ibis aspect, did the court err in the decree entered thereon December 19, 1889, reversing and setting aside the decrees of September 8 and October 14,1887, “in so far as they gave priority to the claims of the supply and labor creditors of the said Columbia Liberty Iron Company as superior to the rights of the first mortgage bondholders?” This question is to be determined without resort to tho proofs, upon the pleadings, proceedings, and decrees which in this country constitute the record proper.

Assuming that these were fully set forth in the bill, the demurrer raised the question. Being overruled, the decrees were reversed; if sustained, the bill would have been dismissed. Other matters are referred to, but they may be disregarded on this inquiry, and the bill taken as a pure bill of review for error apparent, thus stated by the circuit court, in its opinion, which will be found reported in 42 Fed. Rep. 878:

“In the master’s reports, as eoniirmod, priority is given to certain labor and supply claims, contracted by the company before the appointment of tiie receivers, over the bonds secured by the mortgage. This priority was in accordance with the provisions of two acts of the general assembly of Virginia, approved, respectively, March 21, 1877, and April 2, 1879. Since the entry of the decrees of September 8 and October 14, 1887, in this cause, the Virginia statutes giving labor and supply claims a priority over the liens of the mortgage bondholders have, as to supply claims against railroad corporations, been declared by the court of appeals of Virginia to he unconstitutional, as in violation of article 5, § 15, of the constitution of Virginia. Fidelity Ins., etc., Co. v. Shenandoah Val. R. Co., 86 Va. 1, 9 S. E. Rep. 759. [490]*490And this court has also, after full argument, in Fidelity Ins., etc., Co. v. Shenandoah Iron Co., 42 Fed. Rep. 372, decided the act of April 2, 1879, to be unconstitutional as to both labor and supply claims against mining corporations. It is in view of these decisions that these petitioners ask leave to file their petition to have this cause reheard, and the decrees of September 8 and October 14, 1887, reviewed and reversed. * * * But if it could be conceded that the decrees of September 8 and of October 14,1887, are final decrees, the court is of opinion that the petition can be treated as, and in fact is, a bill of review for errors apparent on the face of the record, and might be filed as such. The recent decisions referred to, as deciding that the statute giving labor and supply claims the priority over the lien of the mortgage bondholders is unconstitutional, clearly presents 'a question of error on the face of the record. * * *' Since the rendition of the decrees complained of, the highest state court has declared the statute upon which the lien rests, or out of which it arises, to be invalid because unconstitutional, and federal courts will judicially notice and accept such decision.”

To sustain a bill of review for error of law apparent, the decree’ complained of must be “contrary^ to some statutory enactment, or some principle or rule of law or equity recognized and acknowledged, or settled by decision, or be at variance with the forms and practice of the court.” 2 Daniell, Ch. Pr. (5th Ed.) *1577. ' The general rule is that such a bill does not lie to correct a mere error, which would, in effect, render it nothing more than a substitute for an appeal.

In Perry v. Phelips, 17 Ves. *174, *177, Lord Eldon said:

“There is a great distinction between error in the decree and error apparent. The latter description does not apply to merely erroneous judgments, and this is a point of essential importance; as, if I am to hear this ease upon the ground that the judgment is wrong, and that there is no error apparent, the consequence is that in every instance a bill of review may be filed; and the question whether the case is well decided will be argued in that shape, not whether the decree is right or wrong on the face of it. The eases of error apparent, found in the books, are of this sort, an infant not having a day to show cause, etc., not merely an erroneous judgment.”

So, also, a decree against the statute law is the subject fora bill of review, as, for example, a decree directing a legacy to be distributed contrary to the statute of distributions. Stojry, Eq. PL § 405. So where a decree was entered for the sale of mortgaged premises, capable of division, to pay the whole mortgage debt, when only a small part of the debt was due. James v. Fisk, 9 Smedes & M. 144. And where a foreclosure decree was made contrary to the terms of' the mortgage. Mickle v. Maxfield, 42 Mich. 304, 3 N. W. Rep. 961. These are manifest errors not open to controversy, and while the'modern practice has tended to allow the court of first instance to review or reverse its own decrees, for an erroneous application of the law to the facts found, whenever an appellate tribunal would do so for the same cause, this has certainly not been carried so far as to ignore the rule in principle.

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Bluebook (online)
50 F. 484, 1 C.C.A. 535, 1892 U.S. App. LEXIS 1250, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hoffman-v-knox-ca4-1892.