Further stating the facts in the case, the Court said: "It will be seen from this statement that these bills were substantially creditors' bills to subject propertyin fact the property of the defendant, but fraudulently standing in the name of a third party-to the payment of those judgments, and to remove a fraudulent judgment which might stand as a cloud upon the title of the debtor. Such suits have always been recognized as within the jurisdiction of equity." The above case showed that no State legislation can diminish the equity jurisdiction of the Federal Courts. 148. State Legislation Cannot Extend the Equitable Jurisdiction of the Federal Courts Over Legal Demands. -The converse proposition that no State legislation can extend that jurisdiction to matters essentially legal has been quite as clearly ruled. 149. A Federal Court of Equity May Not Set Aside a Conveyance in Fraud of Creditors at Suit of a Creditor Who Has Not a Lien.-The State of Mississippi has a statute substantially like that which forms section 46 of Article 16 of the Code of Public General Laws of Maryland, and which provides that in case of a proceeding in equity to vacate any conveyance or contract or other act as fraudulent against creditors, it shall not be necessary for any creditor to have obtained a judgment at law on his demand in order to be entitled to the relief sought. Certain citizens of Missouri, Alabama and Louisiana claiming to be creditors of Cates & Co., citizens of Mississippi, filed a bill against the latter in the District Court of the United States for the Northern District of the last named State. The bill said the defendants had assigned their property with the fraudulent intent to hinder, delay and defraud the complainants and other creditors. The Supreme Court held that the United States Courts, as Courts of equity, had no jurisdiction. "The Constitution of the United States, in creating and defining the judicial power of the general government." "established the distinction between law and equity." "Equit able relief in aid of demands, cognizable in the Courts of the United States only on their law side, could not be sought in the same action, although allowable in the State Courts by virtue of State legislation." "The Code of Mississippi in giving to a simple contract creditor a right to seek in equity in advance of any judgment or legal proceedings upon his contract the removal of obstacles to the recovery of his claim caused by fraudulent conveyances of property whereby the whole suit involving the determination of the validity of the contract and the amount due thereon is treated as one in equity to be heard and disposed of without a trial by jury, could not be enforced in the Courts of the United States because in conflict with the provision of the Seventh Amendment by which the right to a trial by jury is secured."1 150. In Federal Courts Right of Trial by Jury Must Be Held Inviolate in What Were Cases at Common Law. -That amendment declares that in suits at common law where the value in controversy shall exceed $20, the right of trial by jury shall be preserved. In the Federal Court this right may, it is true, be waived by the parties entitled to it, but it is otherwise absolute and cannot be impaired or evaded by blending with a claim, properly cognizable at law, a demand for equitable relief in aid of the legal action or during its pendency. "Such aid in the Federal Courts must be sought in separate proceedings, to the end that the right to a trial by a jury in the legal action may be preserved intact. * * * All actions which seek to recover specific property, real or personal, with or without damages for its detention, or a money judgment for breach of a simple contract, or as damages for injury to person or property, are legal actions, and can be brought in the Federal Courts only on their law side."1 Important practical consequences follow. Suppose a citizen of New York has a claim for $3500 against a Maryland debtor. The creditor is satisfied he can show that the debtor 1 Cates vs. Allen, 149 U. S. 451. 'Scott vs. Neely, 140 U. S. 106 has made a fraudulent transfer of property. He wants very much to attack at once the bona fides of the conveyance. It is important to keep the person in whose name or in whose possession the property is from transferring it for value to some innocent third party. The creditor needs an injunction withcut delay. Perhaps the Maryland man has large local influence. The New Yorker may at the time be personally unpopular in the particular county in which the defendant resides. He has in that event a more or less unpleasant choice to make. He will have to take the chance of local prejudices influencing the State Court against him or else he will have to lose the time necessarily consumed in first securing in the Federal Courts a judgment at law. 151. Federal Courts May Enforce in Equity New Rights Given by State Legislation When Such Rights Are Essentially Equitable.—Although no State legislation can take from a Federal Court the right to give equitable relief when, under the circumstances, equitable relief would have been given by the High Court of Chancery in 1789, and while no State legislation can authorize a Federal Court of Equity to dispose of a controversy which, in 1789, would have been one of common law cognizance, yet it is not true that State legislation cannot, in anywise, extend the jurisdiction of Federal Courts of Chancery. Those Courts have jurisdiction in cases where a new remedy in equity, is given by the State statutes in cases of the same general character as those of which the High Court of Chancery took jurisdiction, provided that they are not cases in which the defendant at common law would have been entitled to a jury trial. Put in another way-no State legislation can change the boundary line between the legal and equitable jurisdiction of the Federal Courts, but it may on either side of that boundary extend the area of that jurisdiction. Where there has been a legal wrong without, at common law, a corresponding legal remedy, State legislation may supply one, and the Federal Courts will enforce it. Similarly State legislation may provide an equitable remedy for an equitable wrong, although the High Court of Chancery in 1789 would not or could not have furnished relief. When that remedy has been given, a Federal Court, under proper circumstances, may apply it.1 152. The Effect of the New Equity Rules Upon the Distinction Between Cases at Common Law and in Equity. In the recently promulgated equity rules the Supreme Court has done much to diminish the injurious results of mistakingly taking a legal controversy into a Federal Court of Chancery. It is provided that if at any time in the course of the prosecution of a suit in equity it appears that it should have been brought as an action on the law side of the Court, it shall be forthwith transferred to that side to be there prosecuted, with only such alterations in the pleadings as shall be essential.1 'Louisville & Nashville R. R. Co. vs. Western Union Tele. Co., 234 U. S. 211. CHAPTER VI. THE AMOUNT IN CONTROVERSY. 153. A Minimum Amount in Controversy.-We may now pass to the consideration of another condition which may be necessary to give jurisdiction to a District Court of the United States over a suit of a civil nature at common law or in equity-that is to say that there shall be a certain minimum sum in controversy. 154. Where United States or One of its Officers Sues, Amount in Controversy Immaterial.—When suit is brought by the United States or by one of its officers authorized by law to sue, the amount in controversy is immaterial. The United States ought not to be compelled to go into any other Court than its own to assert a right belonging to it, merely because the sum or value in controversy may be small.1 The same reason applies when a suit is brought by an officer of the United States acting in his official capacity.2 155. When Controversy is Between Citizens of the Same State Claiming Lands Under Grants of Different States Amount in Controversy is Immaterial.To provide impartial tribunals for the determination of disputes growing out of the grant of the same land by different States was one of the reasons for the adoption of the Constitution. Both New York and New Hampshire had claims to Vermont. What is now the last named State was preceding the revolutionary period, familiarly known in New England as the New Hampshire grants. The Green Mountain Boys first became famous by their irregular resistance to the asserted rights of New York. There had been 1 Postmaster General vs. Early, 12 Wheat. 136. 'Henry vs. Sowles, 28 Fed. 481. |