how well taken the objections demurrer is'to the entire bill. may beta, specific portions' of the bill the demurrer cannot be sustained ifthe'billas flo whole shows ground for relief. It is therefon! over,
P SUbsequent to defendant's adjudication as a bankrupt. complainant, owninga ·debt him which existed at the date of his adjudication, aBd which had been proved in tl)e bankruptcy proceedings. sued him on the debt in a state, of whICh he, was .aDon-resident. and, without personal service or other'meabs ofgivirig the court jurisdiction, obtained a.personal judgment against him. Afterwards defendan 'petitioned for a discharge in ban kruptcy. ,which complainant opposed, and thereupon defendl1nt petitioned the bank, ruptey court that. complainant's proofs of debt be canceled because he had ob. tained a valid judgment, in which the debt was merged. The court so ruled, , and complainant's proofs .of debt, and dismissed his opposition. in which .rel.rinK on defendant's of the validity ofbis jUdgment.Oomplalnant filed this bi'll, alleging the above facts; also,' tll\at he was deslrolls of bringing an action at law on said judg, menkin Allot.\:!erlltate,fl,nd that by the law of that state defendant's conduct SUbsequent to rendition of the judgment cannot be pleaded. but that allege either tbe facts showing jurisdiction in the court whi'ch, renderedh. or that'the judgment was duly entered; and praying that beu.djudged to be ,forever estopped to make the defense that the judgment was void for want of jurisdiction. Held, that the bill made a proper case for equity jurisdiction; and that defendant's position in the bankruptcy proceedin'gs estop,ped him to deny the validity of complainant's judgment. S·. REMEl>Y AT LAW. rbe,bill that defendant be adjudged .to be estopped to assert that'tlie'judgment was barred by the discharge in bankruptcy. Held that. if defendant .interposed such defense to the action at law. complainant could show in that action the fnGts relied on to constitute.the estoppel, and that therefore would not pass upon the question.
. . DENY VALUlITY OF JUDGMENT.
June 10, 1889.)
In Equity On demurrerto bills. Suits to enjoin defenses at law. ,AnsOn' Mdltby, for complainants. HenryA.· Root"and '1'. D. Kenneson, for defendant·. SHIPMAN, In each of the above bills in equity the defendant has demurred'tothe bill. The bills of complaint in the two suits present .the same questions, and the demurrers are upon the same grounds. It is· therefOre only necessary to state the facts which are alleged in one suit. I The bill of"complaint in the Cornwall Caae alleges. the following facts: (!)n:AliguBt .26,1869, at San Francisco, Cal., thEidefendant, Davis, made hisfive'p1"omissoi'Y notes in ,writing, for value,to the order ofP. B. Cornwalli and delivered the same to him, all of which were time notes., all to $13,783.70, of which only'tbe'sum of $1,407.43 'has ever been.: paid.'Ou, September 11, 1869, defendant filed in the
CORNWALL V. DAVIS.,
U!1iwd States district court for the district of California, inbankrllptyy, h18 petition to, be adjudged a voll;lntary bankrupt, and was adjudged a bankrupt on September 30, The debts due from the defendapt to said. Cornwall, as evidenced by saidpromissolY notes, ..were duly proved in said bankruptcy proceedings. ,The defendant filed his petition for a discharge on December 23, 1875. Upon a petition of said him leave to sue Cornwall on July 30, 1872,said district court defendant upon said notes. The petition, which is a part of ,the bill, alleged,. among other things, that Davis was then reputed to reside in the staw of New York. Pursuant to said order, in August, 1872, he began an action upon said notes against said, pefendant in the district court of the Fifteenth judicial district of the state of California, by pub· lication of summons therein, under the laws of the state of California, and without personal service of the sqmmons upon said defendant. Thereafter, .and on December 18, 1872" said Cornwall, without personal ,pf lilummons upon said Davis, and without his app",arance in said actionAY attorlley orin person, and without his answering OJ," demurring and without any proceedings by OJ; in rem therein, obtained a judgment against Davis in said court,adjudging that he recover $17 ,043.64 with interest thereon. On December Davis filed in said bankruptcy pr,ocee4ings a petition for his discharge in bankruptcy"andon or about F.ebruary 23, 1876,saidCorn· wall filed in said proceedings specifications of;opposition ...'. ,(in March 18,1876, Davil:l,filed insaid bankl:J1ptcy proceedings b,is.petition notice of motion an order canceling said Cornwa!I'spro'of of debt, anddi!\missing the said of opposition, because the · said Cornwall on or about July 26, 1872, ll-nd,after he. half prov,edhis · debt against the said estate, obtained an "ordef from the bankruptcy court, granting him leave to comUlence any action or actions at law or in equity against the said Davis. or about Aug:ust 2, 1872, the said Cornwall cOmmenced the abov\3'-m,entioned action for:the same cause of action on which he had proved his debt in the ruptcy proceedings, and obtained judgment in his favor andagainstthe said ErwiJ:.lPavis, which s,aid judgment in full force. That said motion came on to be heard before said court, July 20, 1876, by counsel for both Cornwall alid Davis upon ,tion.; of motion, and specifications of opposition to thebankrupt's discharge,and it was then and. there claimed, declared, and admitted, and assurance, was made ill,open court"by cou,nsel duly al,lt}lpri,zed thereto, for and in behalf of saici defendant,. that the original debts. of said DaVis, dqe to the sa:itd Cornwall, and proved in' said. bankruptcy in judgment obtained December18,1872, proceediIlgs,had I,l,nq. thereby bec,a-mea ne", debt; created since the adjudication of asa·bankrupt. Tpat /laid judgment was,subsisting,yilicl, and enforceable, and that sai<l: j1;ldgment qeb.t wquldilot be.ban'e,d.or dis.. or in anywise. the .. .in said · proqeeciillgs said Davill, but woqld re:nmilil st9;nding qfrecorq, and · validj a,ud that Cornwall ha,d" oCsuch facts,oos¥tQt;l-
J " '
ing, and was not interested in such bankruptcy proceedings, and was not, a party competent, toqppose the discharge of said bankrupt. On October 31, 1876, an was made in said bankruptcy proceedings that all proofs' of debt theretofore made and filed in said 'court by Cornwall against the estate of Davis be canceled, and that the specifications of opposition theretofore filed by said Cornwall be disinissed and set aside. That said order of October 31, 1876, was based upon and made by reason of the said claims and representations of counsel for said defendant Davis. That Cornwall relied upon and accepted as true and binding said claims and repl'esentations of said Davis that said judgment was valid and binding on him, the said Davis, and that the same would not be, barred by a discharge in bankruptcy of said Davis, and was thereby induced to accept as binding and correct in law the eaid orner of the' said United States court, and by reason of 'said admissions and representations was induced, to accept, and did accept, the order, and did not appeal therefrom. ' Davis thereafter ob'tailled his final discharge in bankruptcy in s.aid proceedings,and Cornwall never, .after October 31, 1'876. made any' opposition to said Davis' petition for his discharge in bankruptcy. Said jQdgment of December 18, 1872, is still of record in said court, and is in equity of full and binding force,' and valid by reason',of said facts, .and the whole 'amount thereof remains, due to Cornwall from Davis. Cornwall claims 'upon all the premises that the defendant is forever estopped from setting concerriir).g said judgment of December 18, 1872, that the debts proved in bankruptcy as aforesaid Were not merged in ,said juqgment;that it is not valid; that it does not constitute a new debt which, is unaffected hysaid Davis' said final discharge in bankruptcy, and that said discharge is a bar to any such suit upon said judgment. , Heretofore, in various courts, in sundry actions upon said judgment between said Davis and Cornwall, and which were discontinued or terminated without prejudice to Cornwall, said Davis has claimed and set up, and still claims and sets tip, that said judgment of December 18 t 1872, is void because of the lack of jurisdictiollof the court wherein it 'Was entered, for the reason that said Davis was not personally served ··with process, did not appear in the action in any manner, and that the action wag not in rem or commenced hy attachment; and further t that he has obtained a discharge in said bankruptcy proceedings which forever bars all recovery upon said judgment, and such discontinuances , were had because said Davis so claimed and set up., That said Da,iis ,has frequently threatened t and still threatens, and Cornwall has reason to believe will endeavor to defeat recovery upon said judgment in any action that may be brought thereon by Cornwall by setting up the same defetlse. The bill further alleges that Cornwall is about to commence iJri action at law upon said judgment of December 18, 1872, against Daii-is t to recover the amount due thereon as aforesaid, in the state of ,New York, wherein Davis resides. 'That, as Cornwall is advised and be'Haves, under the law of the state of 'New York, whe're said action is to bebro\lght, in an action at law to recover the amount due upon such
CORNWALL V. DAVIS.
judgment the facts subsequent to such judgment as hereinbefore set forth and constituting the estoppel as herein claimed and insisted upon may not be pleaded in the plaintiff's complaint as or in aid of a cause of 11(,'" tion, but that such action must be brought upon such judgment alone, and that by the law of the state of New York it is necessary in an action at law upon such judgment to allege in the complaint either the facts showing the jurisdiction o.f tho court in which the judgment was entered, or that the judgment was duly entered; and that, unless this be done, the complaint would be dismissed on demurrer. That. Cornwall is unable truthfully to allege in said complaint such jurisdictional facts, or that such judgment was duly entered, and that he is thus remediless in an action at law to maintain his rights under such judgment and under the facts hereinbefore set forth. All of which acts, doings, and pretenses on the part of defendant since October 31, 1876, are coritrary to equity and good conscience, and tend to the manifest wrong and injury of Cornwall in the premises. The bill then prays that Davis be adjudged to forever estopped from claiming the said defenses hereinbefore stated, and also prays for' an injunction. To the bill of complaint the defendant has demurred on the ground that the said complainant hath not such a case as entitles him in a court of equity to any relief. It is virtually conceded by these averments that no action can be sustained upon the California judgment if t.he lack of jurisdiction in the court which rendered it is permitted to be shown, or if its defects are not shown to have been subsequently waived by Davis. The bill alleges that by the law of New York, in an action in that state upon the judgment, it is necessary to allege either the facts the jurisdiction of the California court, or that the judgment was duly entered, and that the complainant is unable truthfully to allege 'in his complaint such jurisdictional facts, or that the judgment was duly entered. The proceedings were taken, under the existing statutes of California, against a nonresident. Davis had been apparently domiciled in that state, or had been a resident therein, but had departed therefrom, and was reputed to reside in New York. He was not served with process, he did not appear, and did not affect him personally. Cooper v. Reynold8, 10 Wall. 308; Pennoyer v. Neff, 95 U. S. 714. The object of the bill is to enjoin Davis against setting up either the invalidity of the judgment or his discharge from the debts which were provable against him in bankruptcy,upon the ground that an equitable estoppel exists which prevents him from asserting either of these defenses. Different considerations are applicable to the different defenses, which will therefore be considered separately. The was entered in 1872. In 1875 Davis filed in the district court a petition for his discharge in bankruptcy, and in 1876 Cornwall filed specifications of opposition thereto. Davis thereupon filed in said court his petition, praying that Cornwall's proofs of debt might be canceled. and that his specifications should be dismissed, because, after the proofs of debt were filed, he had ohtained judgment upon the same fulL force. claims, .which judgment still stood of record, and was v.38F.no.11-56
Davis founded his petition upon the judgment, based his application for the affirmative action of the district court thereon, and asserted its validity. It was his sole and successful weapon of attack upon Cornwall. The judgment being against him, he set it up in bar Of Cornwall's proofs of debt and specifications of opposition to the discharge,and by that act he affirmed" the validity of the judgment against himself, and is eo instanti estopped to impeach it thereafterwards." Henderson v. Staniford, 105 Mass. 504; Hughes v. Investment 00., 28 Fed. Rep.40; Railway 00. v. McCarthy, 96 U. S. 267. A party cannot successfully rely upon and af· firmatively set up a judgment as valid to defeat his adversary's claim, and subsequently attempt to rely upon its invalidity. Although it was invalid when rendered, he has,by his subsequent conduct, and "by ac· cepting the benefits which it conferred," given it validity, and it can no longer be considered, as against him, avoid judgment. Mills v. Hoffman, 92 N. Y. 181.. Is there necessity for resort to a court of equity to obtain the benefit of this estoppel? It is now settled that the mere fact that an estoppelis what is called an "equitable estoppel" does not compel the party who relies upon it to resort to equity, but it may be used with equal' advantage in a court of law, and that, "ip order to justify a resort to a court of equity, it is necessary to show some ground of equity other than the estoppel itself, whereby the party entitled to the benefit of it is prevented from making it available in a court of law." Dickerson v. Colgrove, 100 U. S. 578; Drexelv. Berney, 122 U. S. 241, 7 Sup. Ct. Rep. The ground. of equity in this part of the case is the averment which was once coneeded by the defendant, in argument, to betrue,and'which, therefore, I assume to beirne, that in an action at law upon ajudgrnent in the state of New York it is necessary to allege in the complaint either the facts showing the jurisdiotion of the court in which the judgment was entered, or that it was duly entered, and, unless this is done,the complaint will be dismissed on demurrer. It thus appears that it is uncertain whether CornwaHcould so frame his complaint as to be able to obtain a standing in a court of llw, unless Davis should be prevented from taking advantage of the defective jurisdiction of the California court, and that it is improbable that the plaintiff could, at the outset of case, ·availhimself of this estoppel so as to gain a foothold in court. It foHows that a case is stated in that part of the bill which relates to the defense of the invalidity of the judgment which entitles the complainant to relief in a court of equity. Drexel v. Berney, supra. \ The remaining portion of the bill presents a different question. The complainant contends that Davis is estopped from shifting his ground as fu the effect of the of December, 1872. His position in the petition to the district court, in his argument, liLnd in hi& successful effort to obtain the order of October 30, 1876, was that thejudgment created a new cause of action in which' the pre-existing notes were merged; that neither judgment nor notes wereprovableithat' the judgment would not be barred by the discharge in bankruptcy; 'awdr,that consequently CornwalL's proofashould be canceled, andhia specifications of opposition \
SECOND NAT. BANK.
should he dismissed; whereas he now claims that the debt was the same before and after judgment, and that the discharge in bankruptcy is effectual against the judgment. The status of a debt which existed at the time of an adjudication in bankruptcy, but which was represented by a judgment entered against the bankrupt after the adjudication and before his discharge, was. at the date of the order of October 31, 1876. a matter upon which the decisions were very contradictory. The subsequent decision of the supreme court in Boynton v. Ball, 121 U. S. 457, 7 Sup. Ct. Rep. 981, was against the theory of Davis' petition and the opinion of the district court. The question is thus raised whether Davis can be now permitted to change his position as to the legal effect of the judgment, which, he insisted in 1876, would not be barred by his discharge, and now insists was barred thereby. He obtained the order of the district court upon the old theory, and enjoyed the benefit of it, apd now wishes to obtain the aid of the opposite and recently established theory. The question is not the same which has just been considered. That involved the propriety of abandoning his position in regard to the existence of a judgment, whereas this relates to the propriety of his changing his position in regard to the legal effect of the judgment. The plaintiff says that the principles which govern the decision of the two questions are the same. . I do not propose to decide this question, because I see no difficulty in the plaintiff's having the benefit of this alleged estoppel in his action at Jaw. If Davis his discharge in bankruptcy, it is substantially conceded that the facts which constitute the estoppel can be given in evidence by the plaintiff. Railroad Co. v. Howard, 13.How. 307. There is nothing outside the estoppel whicB. prevents the plaintiff from making it available in his action at law. Drexel v. Berney, 8upra. The demurrer is overruled.
11. SECOND NAT. BANK OF SPRINGFIELD.
(Di,trict Oourt, 8. D. Ohio,
Juay .20, 1889.)
Under Rev. St. U. S. § 5190, providing that "the usual business of each n8tional banking associati()n shall be transacted at an office or bankinll house located in the place specified in its organization certificate, " a national bank cannot make a valid contract for the cashingof checks upon it, at a different place from that of its residence, through the agency of another bank. Whatever the terms of sllch ltn arrangement, being made before the date of the drawee bank's certificate of authorization, it is invalid under Rev. St. U. S. iii 5186. providing that no banking association "shall transact any business except such.as is incidental and uecessarily preliminary to its organization, until!t has been anthorized by tl1e comptroller of the currency to commence the business of banking. " .
SAME-CERTIFICATE OF AUTHORIZATION.
At Law. Action for money had and received. J. W. Wilby, for plaintiff. , J. Warren Keijer, for defendant.