Pearce v. Winter Iron-Works , 32 Ala. 68 ( 1858 )

WALKER, J.

That the parties are both citizens of the State in which the suit is brought, is good matter of plea to the jurisdiction of the district court of the United States; and if the fact that the plaintiff is a resident of another State be not shown in the record, the court will, at any time pending the cause, dismiss the suit. But it is now a doctrine, too well settled to be controverted, that after the judgment has been rendered, it can not be collaterally assailed, upon the ground that the parties were both residents of the State where the suit 'was brought. It has even been decided, that the judgment of'the Federal court is not a nullity, although the record may omit to show the jurisdictional fact of the ¡plaintiff’s residence in another State. This case does not require an adoption of that extreme of the doctrine, because it does not appear that the jurisdictional fact ivas not disclosed by the record of the district court of the United States. It is a necessary sequence from this statement of the settled law, that the complainant cannot claim to have the judgment of the district court against either the "Winter Iron-Works, or against himself, treated as a nullity, because the plaintiff, Ford, was in fact a resident of the State of Alabama. — McCormick v. Sullivant, 10 Wheaton, 199; Wood v. Mann, 1 Sumner, 581; Erwin v. Lowry, 7 Howard, 180; Skillern v. May, 6 Cranch, 267.

2. By the act of Congress of 1828, the courts of the United States, held in the States admitted into'the Union after 29th September, 1789, are authorized to adopt the forms and modes of proceedings which prevailed in those States at the date of the act. — Laws U. S. Courts, 78. Before 1828 the proceeding by garnishment was authorized by the laws of the State of Alabama; and, therefore, the district court of the United States, held in the State of Alabama, could legitimately adopt that mode of proceeding.

8. The garnishment was a new suit, in favor of the plaintiff in the judgment, and not of the defendant. It initiated a new controversy, between the plaintiff and the garnishee. If the plaintiff therein was a resident of the State of Alabama, as alleged in the bill, the garnishee might have defeated the suit, commenced by the garnishment, by interposing a plea to the jurisdiction ; or, if the plaintiff' had no interest, and his name was used for a fraudulent purpose, while the real beneficial plaintiff was the corporation existing in this State, it would have been appropriate matter for a plea to the jurisdiction. The judgment, having been rendered without the interposition of either of those defenses, is valid, notwithstanding the facts requisite to sustain both of them may have existed. Tunstall v. Worthington, Hempstead’s C. C. R. 662; Ashley v. Perciful, ib. 217; Jackson v. Shipman, 28 Ala. 488.

4. The views above expressed are fatal to all the arguments in favor of the equity of complainant’s bill, which assail the validity of the judgment of the district court of the United States against the complainant. It is contended, also, that the bill is maintainable, as an application for the allowance of a set-off against the judgment in favor of Ford, for an amount due by th e Winter IronWorks to the complainant. We concede, that a judgment against a defendant is no bar to a subsequent suit by him against the plaintiff, on a demand in his favor which might have been pleaded as a set-off. He had a right to avail himself of his cross demand by way of set-off, but was not bound to do so. It is, however, quite a different question, whether a defendant, -having a subsisting demand against the plaintiff, which constituted a good set-off in the suit at law, can withhold it as a defense to the action at law, and, after the judgment has been rendered, make it the basis of a suit in chancery against the plaintiff, because the existence of insolvency constituted it an equitable as well as a legal set-off. If a defendant has a cross demand, which is a good set-off at law, and is also an equitable set-off because of the insolvency of him against whom the cross demand exists, can he withhold the defense at law, because it is also available in chancery, and, when the judgment is rendered, make that defense in chancery which he could have made to the suit at law? We decide this question in the negative. If a defense is both legal and equitable — if it be a matter of concui’rent jurisdiction — it must be brought forward in the forum whose jurisdiction first attaches. If not, it can never, in the absence of some legal excuse for not defending at law, be made available as a defense; and, in the case of set-off, the defendant must, in the absence of such excuse, be left to his independent suit on his cross demand. The following authorities fully sustain our con-elusion. — Foster v. The State Bank, 17 Ala. 672; Saunders v. Fisher, 11 Ala. 812; Galbraith v. Martin & Findley, 5 Humph. 50; Mallory v. Matlock, 10 Ala. 595; Teague v. Russell & Moore, 2 St. 420; Hill v. McNeill, 8 Porter, 432 ; French v. Garner, 7 Porter, 549; Willard’s Eq. Jur. 355; Hendrickson v. Hinckley, 17 How. 443; Pollock v. Gilbert, 16 Ga. 402; 7 Cranch, 332; 10 Grattan, 228. The decision of this court in Foster v. State Bank, supra, is precisely in point, and, hy reasoning which we regard conclusive, supports the proposition, that if the defense be both legal and equitable, the defendant cannot enjoin the judgment, without the averment of some sufficient legal excuse for the failure to defend at law.

The complainant in this suit had an opportunity, as full and complete, to set off his demand against the Winter Iron-Works in the garnishment proceeding, as he could have had in the chancery court. No excuse, which the law deems sufficient, for the failure to make the defense to the garnishment proceeding, is averred. It does not appear that the Winter Iron-Works was not as insolvent then, as when the bill was filed ; nor does it appear that the complainant was not then fully apprised of all the facts which go to make up the defense. The reason for not making the defense, alleged in the bill, is, that the complainant was advised that the district court of the United States had no jurisdiction to allow the set-off. This is no excuse for the failure to defend at law. — Lawson v. Bettison, 7 English’s (Ark.) R. 401; Powell v. Stewart, 17 Ala. 719; Watts & Gayle v. Bower, 20 Ala. 817; Perrine v. Carlisle, 19 Ala. 688; Hair & Labuzan v. Lowe, 19 Ala. 224; Stein v. Burden, at the last term; Saunders v. Fisher, 11 Ala. 812.

It is proper to remark, that no averment of the discovery of any new facts is made in the bill. It may be inferred, on the contrary, that the complainant knew all the facts set forth in his bill when he answered the garnishment. It is not alleged that he was prevented by fraud, accident, or mistake, from bringing forward his defense to the garnishment proceeding. Every defensive matter alleged in the bill, which could have been good in any forum, was available in the district court of the United States. No reason, deemed sufficient, for not making the defenses at law which are here set up, is shown; and no relief can be had in chancery. The hardship of the complainant’s situation cannot justify a departure from the rule of law, which requires from him that he excuse the failure to defend at law, before he can have a standing in equity. — Lawson v. Bettison, 7 Eng. (Ark.) Rep. 401, and authorities there cited.

The decree of the chancery court is affirmed, at the costs of the appellant.