Statement of the Case.

SCHUNK v. MOLINE, MILBURN AND STODDART COMPANY.

ERROR TO THE CIRCUIT COURT OF THE UNITED STATES FOR THE DISTRICT OF NEBRASKA.

No. 1153. Submitted January 9, 1893. - Decided February 6, 1893.

A statute of the State of Nebraska authorizes a creditor in certain cases to bring an action on a claim before it is due and to have an attachment against the property of the debtor. A citizen of Ohio brought an action in the Circuit Court of the United States for the district of Nebraska against a citizen of Nebraska, to recover $530.09 which was overdue, and $1664.04 which was to become payable in the following month, and an attachment was issued under the statute against the defendant's property. The Circuit Court sustained its jurisdiction and gave judgment in plaintiff's favor for both sums. Held,

(1) That the Circuit Court had jurisdiction, notwithstanding the fact that a part of the sum sued for was not due and payable when the action was commenced, and the amount actually due and payable was less than $2000;

(2) That if there were any error in the decision, on which this court expresses no opinion, the defendant, if desiring to have it reviewed should have taken the case to the Circuit Court of Appeals.

On the 14th of November, 1891, defendant in error commenced a suit against B. A. Schunk in the Circuit Court of the United States for the District of Nebraska on several notes, some of which, amounting to $530.09, were past due, while the others, amounting to $1664.04, were not then due. The prayer of the petition was in these words:

"Wherefore the plaintiff prays judgment against the said defendant for the said sum of $530.09, with interest thereon from the respective dates of the notes which are now past due, together with the further sum of $1664.04, which will become due, and payable the 1st and 8th days of December, 1891, with interest thereon from the respective dates of said promissory notes, and the plaintiff prays that it recover a judgment for all of its costs paid out and expended in this action, and

Argument for Plaintiff in Error.

plaintiff further prays for a judgment against said defendant for all reasonable costs of collection of the above-mentioned indebtedness, and for a judgment including plaintiff's attor ney's fees in the sum of $250."

Under the provisions of the state statutes, an attachment was issued against the property of the defendant. The section authorizing this is in these words:

"Sec. 237. A creditor may bring an action on a claim before it is due, and have an attachment against the property of the debtor, in the following cases: First. Where a debtor has sold, conveyed, or otherwise disposed of his property, with the fraudulent intent to cheat or defraud his creditors, or to hinder or delay them in the collection of their debts. Second. Where he is about to make such sale, conveyance, or disposition of his property, with such fradulent intent. Third. Where he is about to remove his property, or a material part thereof, with the intent or to the effect of cheating or defrauding his creditors, or of hindering and delaying them in the collection of their debts." Cobbey's Consolidated Statutes, 1891, p. 1003; Compiled Stats. Neb. 1891, p. 884.

Subsequent sections prescribe the proceedings to be pursued, the regularity of which in this case is not challenged. A demurrer to the petition on the ground, among others, that no cause of action was stated was overruled, a motion to discharge the attachment denied, and judgment rendered on May 21, 1892, for the sum of $2347.50, together with $100 as an attorney's fee. To reverse this judgment the defendant below, as plaintiff in error, has sued out a writ of error from this court.

Mr. Walter J. Lamb, Mr. Arnott C. Ricketts and Mr. Henry H. Wilson, for plaintiff in error.

An attachment upon a claim not yet due is a different thing from an attachment upon a claim already due. In the former the attachment is an original process; in the latter an ancillary process, arising out of the jurisdiction over the principal cause of action. Where jurisdiction has been obtained over a cause of action on a claim already due, it is in no way affected by

Argument for Plaintiff in Error.

the success or failure of the attachment proceeding. That proceeding is mèrely ancillary to the principal case, and the court still exercises its jurisdiction over the principal case regardless of the fate of the attachment proceeding. It was clearly this ancillary proceeding, in no way affecting the original jurisdiction of the court, that must have been contemplated by section 915 of the Revised Statutes. It is, however, entirely different when an attachment is issued upon a demand before due. There the court has no jurisdiction to hear and determine the principal case except by virtue of the jurisdiction obtained by the seizure of the property. There the original and substantial jurisdiction is the power to attach and sequester the defendant's property and to hold it to answer the plaintiff's demand when the same shall become due. In such a proceeding, the right to maintain the action at all rests wholly upon the success of the attachment proceeding. No suit can be maintained in any court upon such a demand under the Nebraska statute except by virtue of the seizure of the property. Green v. Raymond, 9 Nebraska, 295.

In the event that the attachment proceedings are wrongfully brought and on motion the attachment is dissolved, the court loses jurisdiction over the whole matter and cannot enter judgment on the claim after it becomes due if it was not due at the commencement of the suit. In other words, in this class of attachments the jurisdiction over the claim, not yet due, is incidental and ancillary to the original and independent jurisdiction to issue the attachment, seize and sequester the property. Pierce v. Myers, 28 Kansas, 364. Gowan v. Hansen, 55 Wisconsin, 341.

It will be noticed that sec. 915 of the Revised Statutes of the United States restricts remedies by attachment to "common law causes," while the Nebraska code authorizes such an attachment in the state court in any civil action, whether it be at common law, in equity, or founded upon a statute. The Federal statute cannot be held to carry into Federal jurisprudence the whole state law of attachments. At common law an action upon a claim not yet due was unknown. No suit could be maintained except upon a present obligation to pay.

66

Opinion of the Court.

This action, being a purely statutory proceeding, not primarily to liquidate a demand about which a controversy has arisen, but to seize and hold defendant's property to answer a claim to mature in the future about which no controversy has or could have yet arisen, does not come within the class of common law causes" mentioned in Rev. Stat. § 915. Strictly speaking, it is not an action on the debt at all but a statutory proceeding to seize and hold property till a cause of action arises. That being the nature of this proceeding, the Circuit Court acquired no jurisdiction over it, and had no power to order the seizure of such property in a case where it had no jurisdiction of the subject matter without such seizure. The jurisdiction must exist in order to give the power to make the seizure. Such jurisdiction cannot be founded upon the seizure. The state, and not the Federal legislature, has conferred the jurisdiction to issue an original attachment, and the state legislature has power to confer it upon the State but not upon the national tribunals.

Mr. John L. Webster, Mr. Warren Switzler and Mr. James McIntosh for defendant in error.

MR. JUSTICE BREWER, after stating the case, delivered the opinion of the court.

In this case the only question that can be considered is, under section 5 of the Court of Appeals act of March 3, 1891, 26 Stat. 826, c. 517, that of the jurisdiction of the Circuit Court. McLish v. Roff, 141 U. S. 661.

The errors assigned are, first, in overruling the demurrer; second, in holding that the court had jurisdiction to seize and sequester the property to secure the payment of a debt not yet due; third, in holding that it had jurisdiction to issue an attachment upon a demand not yet due; and, fourth, in allowing an attorney's fee. Of course, the latter matter presents no question of jurisdiction.

With respect to the other assignments, the plaintiff was a corporation created by and a citizen of the State of Ohio, and

Opinion of the Court.

the defendant a citizen of Nebraska. The jurisdiction of the Circuit Court was, therefore, invoked on the ground of diverse citizenship. By the act of March 3, 1887, 24 Stat. 552, c. 373, as corrected by the act of August 13, 1888, 25 Stat. 433, c. 866, jurisdiction is given to the Circuit Courts over controversies "between citizens of different States, in which the matter in dispute exceeds" the sum or value of two thousand dollars. The claim of the plaintiff was to recover $2194.13 and interest. The right to recover this, or any part thereof, was challenged by the demurrer.

In Gaines v. Fuentes et al., 92 U. S. 10, 20, this court said: "A controversy was involved, in the sense of the statute, whenever any property or claim of the parties capable of pecuniary estimation was the subject of litigation and was presented by the pleadings for judicial determination." Hilton v. Dickinson, 108 U. S. 165.

Within the letter of the statute there was therefore, a controversy between citizens of different States, in which the matter in dispute was over the sum or value of two thousand dollars.

It matters not that, by the showing in the petition, part of this sum was not yet due. Plaintiff insisted that it had a right to recover all. That was its claim, and the claim which was disputed by the defendant. Suppose there were no statute in Nebraska like that referred to, and the plaintiff filed a petition exactly like the one before us, excepting that no attachment was asked for, and the right to recover anything was challenged by demurrer, would not the matter in dispute be the amount claimed in the petition? Although there might be a perfect defence to the suit for at least the amount not yet due, yet the fact of a defence, and a good defence, too, would not affect the question as to what was the amount in dispute. Suppose an action were brought on a non-negotiable note for $2500, the consideration for which was fully stated in the petition, and which was a sale of lottery tickets, or any other matter distinctly prohibited by statute, can there be a doubt that the Circuit Court would have jurisdiction? There would be presented a claim to recover the $2500; and