FRAENKL v. CERECEDO HERMANOS

FRAENKL v. CERECEDO HERMANOS. APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR PORTO RICO. No. 411. Submitted January 10, 1910. Decided February 21, 1910. • Where a bill of review is presented for filing within the period allowed, . and the court delays passing upon the application until after that 'period has elapsed, the time between tendering the bill for filing and permission given to file is not counted in applying the limitation. Ensminger v. Powers, IOS U. S. 292. Jurisdiction is determined as of the time of commencement of the suit, and éven though the jurisdiction of the court be enlarged by asub-s'equent statute so as to include the parties, the court cannot acquire jurisdiction against objection. After a case has been decided below without reference to any Federal question part ies may not for purpose of review by this court inject a Federal question by the suggestion that a 1 ederal right was relied on. 1 Porto Rico Fed.. 53, affirmed. . This is an appeal from a decree of the District .Court of the United States for Porto Rico, upon a bill of review, vacating and annulling a decree entered by that court in an equity cause, and dismissing the bill of complaint in said causo without prejudice. The bill in the equity cause referred to was filed in Decém-ber, 1900. The present appellants were complainants. . Some of them were alleged in the bill to be copartners doing business in Dundee, Scotland, as Jaffe Brothers & Company, and to, be-subjects of the Queen of Great Britain and Ireland. The ' others were averred to be copartners doing business in Berlin, Germany, as Hinne & Company, and to be subjects of the Emperor of Germany. The defendants to the bill were Demetria Bolta and Alfredo Arnaldo y Sevilla, and various other individuals alleged to be the general and special partners of a firm1 styled J. Fernandez &..Co. Among such were Manuel, • Enrique,' José and Francisco Cerecedo, all of whom. were •members of a firm styled Cerecedo Hermanos, which firm, it was charged, was a special partner-in J. Fernandez ■& Co. All the defendants were averred to be citizens and residents of Porto Rico. The allegations; of. the bill were thus summarized in an opinion, .rendered in the eourt below: .“It avers, in substance, that Fernandez &Co., of which firm Cerecedo Brothers were special partners up to the time when Fernandez. & Company .suspended payment, were indebted tb the-complainants in certain sums set forth in the bill; that fraudulently and to obtain time the last-named firm agreed with Jaffe Brothers & Company to transfer to them' certain securities upon third parties for their debt, but thereafter proposed to turn, them over in actual payment pro tanto, •but when- the agent of Jaffe Brothers & Company obtained authority' to agree to this, said firm applied for suspension of payment's; that to get this they issued false evidences of indebtedness to; Cerecedo Brothers and others; that after the suspension of - payments Fernandez, as liquidator, fraudulently transferred the securities complainants Jaffe Brothers. ■& Co. were, to have to a third par-ty without consideration, and-for half .of-their value, Cerecedo’Brothers being in fact the real purchasers; that Fernandez;, after the suspension of payment's, turned over to Cerecedo. Brothers a large amount of property, the amount being unknown to complainants, and disposed of a large part of the assets fraudulently.. Interrogatories were propounded in the bill to Fernandez. The relief sought waa a specific performance of the agreement with Fernandez as to the securities; that a receiver be ap-ppinted and the assets of Fernandez & Company be marshaled; that Fernandez & Company be enjoined from collecting said securities or interfering with the company’s assets; that they be delivered to the receiver, the liens be ascertained, the property sold and distributed- among the. creditors, Jaffe •Brothers & Company being allowed to participate in the distribution, said -securities being first applied on their debt.” After the return of service of summons upon the firm, Herbert E. Smith, signing himself “Solicitor for defendants,” filed a “special appearance” in the case “for the purpose of moving the court for the compliance bn the part of the plaintiffs with the rule of court relative to non-residents giving se-. curity for costs, and for the purpose of opposing the motion' for an injunction and receiver.” On January 14, 1901, a re- •• ceiver was appointed, who however never qualified. It was recited in the order appointing the receiver that after due notice had been given of an application for temporary injunction, the cause had been fully argued by counsel for the respective parties. Subsequently, on. January 31, 1901, by written stipulation between counsel for the plaintiffs and defendants, it was agreed “that the defendants herein may and shall have until the 20th day of February, 1901, for the purpose of'demurring to, pleading to or answering the bill of complaint of said complainants herein.” Thereafter, on February 23, 1901, a decree pro confesso was entered against all the defendants, and complainants were given leave to proceed ex parte. On June 8 following a final decree was entered, adjudging the general and special partners in the firm of J. Fernandez & Có. to be indebted .to the complainants in specified amounts, cancelling and annulling, as against the rights of 'complainant, because fraudulent and fictitious, the alleged indebtedness of the firm of J. Fernandez & Co. to the special partners, cancelling and setting aside as fraudulent the transfers made to the ■ defendant Bolta, and adjudging that the defendants composing the firm of J. Fernandez & Co. pay. the amounts found due to the complainant, and that in. default of so doing execution should issue. On January 31, 1902, an execution was issued, which was levied upon the property,of the firm of Cerecedo Hermanos. Thereupon, on February 6, 1902, there was'filed in the court from which the' execution issued, on behalf of the members of that firm, a petition praying for leave to file a bill to review and set aside the decree theretofore entered pro confesso against them. The petition recited the presentation of the bill of review, and that document’was marked as “Tendered’February 6, 1902.” Both in the petition and bill of review various errors asserted to be apparent on the face of the record were set out, which, from the view we take of the case, need, not be here detailed. While, as stated, the petition for leave was filed on February 6, 1902, leave to file was hot granted until June 22, 1903, on which date the court filed an opinion. .1 Porto Rico Fed. 53. . The opening paragraph of the opinion is as follows: “This is a petition for leave to file a bill of review, which is also tendered. The decree asked to be set aside1 was entered June 8, 1901. This petition was presented February 6, 1902. Objection is made that it comes too late. It is claimed that the act of Congress of March 3, 1891, relative to the,-United States Court of Appeals, applies to it. The limitation for appeal, and which, by analogy, has been applied in equity to the time for filing bills of review, applicable, however, is the two years provided in section 1008 of the United States Revised Statutes. Clark v. Killian, 103 Ib S. 7G6; Allen v. S. P. R. Co., 173 U. S. 479.” The court considered two of the grounds assigned in support of the petition for leave to file. One related to the jurisdiction of the court, to render the decree and was disposed of by the statement that all the complainants were, aliens. Upon the ground, however, that the averments of the bill in the main cause did not authorize the money decree which had been rendered, it was held that in order to prevent injustice the “petitioners should.be allowed to file their bill of review, appear, open the decree, and make defense,” upon payment of costs to' (.late and the execution of a bond in the sum of fifteen thousand dollars, conditioned to perform any judgment that might finally be rendered against them. On June 1-9, 1903, an order was entered permitting the filing of the bill of review, opening the decree in the original cause and permitting the Oerecedos to appear therein and make defense, and ordering the return of the execution upon the ■ giving of bond. The condition as to payment of costs and giving bond having been complied with, thereafter, on October 13, 1903, a demurrer was filed to the bill of review, and at the same time in the main cause a plea to the jurisdiction Of the court wras filed. On October 14, 1903, an amended bill of review was filed. Nearly four years afterwards,' on June'l, 1907, an opinion was filed, holding that the,demurrer to the bill of review and also ' the plea to the jurisdiction in the main casé should be overruled. On the twenty-second of the same month an answer was filed to the bill of review, to which a reply was filed in the following month. On the same day the Oerecedos also demurred to'the bill of complaint in the main cause. On April 3, 1908, the court vacated, as improvidently made, the order opening the final decree, in the, main cause and suspended further proceeding therein until the determination of the questions raised by the bill of review. On October 30 following, however, the court consented to a reargument of the plea to the jurisdiction in the main cause which had been theretofore adversely ruled upon, with the result that on February 1. 1909, the. plea to the jurisdiction -was sustained.' A final decree was thereupon entered upon the issues made upon the bill of review, and after reciting that it appeared upon the face of the-record in the original cause that the court was without jurisdiction to entertain the same, it was decreed as follows: “Itds, therefore, hereby ordered, adjudged and decreed that this bill to review the proceedings of 'this court in said original cause be, and the same hereby is, sustained for- the. reason aforesaid; that the decree entered by this court on the 8th day of June, A. D. 1901, in the city of Mayaguez, in favor of complainants in said original suit, the same being as aforesaid No, 6 on the equity docket at Mayaguez, entitled Jaffe 'Brothers & Company and Hinne & Company v. J. Fernandez & Company and Cereceda Brothers, be, and the same hereby is, vacated and annulled; and that said original bill of complaint be, and the same hereby,is, dismissed without prejudice, with costs of this bill of review in favor of the complainants herein.” The. cause was then appealed to this court. Mr. N. B. K. Pettingill and Mr. George H,. Lamar for appellant: ■ A bill of review must be filed within the statutory period for taking an appeal or writ of error. Thomas v. Harvie’s Heirs, 10 Wheat. 146; Central Trust Co. v. Grant Locomotive W]ts., 135 U. S. 207. From the Porto Rico court .this would be two years. Allen v. So. Pdc. Ry.. Co., 173 U. S. A79; Royal Ins. Co. y. Martin, 192 U.-S. 149; Rev. Stat., §§ 702, 1008. The objection to the jurisdiction of the District Court of the United States for Porto Rico was. not seasonably raised and under the circumstances of this case the court properly took and retained jurisdiction. Kennedy -v. Bank, 8 How. 5.86; Ex parte Watkins, 3 Pet. 193; Dowell v. Applegate,■ 152 U. S. 327, 340. The lower court had jurisdiction after the act of March 2, 1901, 31 Stats. 953, .when the final decree was entered and the passage of that act cured any defect of jurisdiction. Pacific R. R. Co. v. Ketchum, 101 U. S. 289;-Richardson v. Green, 61 Fed. Rep. 423, 431; First National Bank v. Radford Co., 80 Fed. Rep. 569; Hoffman v. Knox, 50 Fed. Rep. 484; Master-son v. Howard, 18 Wall. 99; Pennsylvania v. Bridge Go., 18 How. 421. The original bill also raised a Federal question as the construction of a statute of the United States was involved and that gave the court jurisdiction. Cohens v. Virginia, 6 Wheát. 264, 379; Osborne v. Bank, 9 Wheat. 738, 822;■ Wymán v. ' Wallace, 201 U. S. 230. ' Mr. Francis H. Dexter for appellees. [MAJORITY — Mr. Justice White,] Mr. Justice White, after making the foregoing statement, delivered the opinion of the court. The assignments of error which require consideration assail the power of the court below to permit, the filing of the bill of review, and also question the validity of its -action in vacating the decree entered in the main cause and dismissing the, bill filed therein. Respecting the first, the proposition is that the limit of-■time within which- a bill of review might be filed had ex-, pire.d when leave was given, and that the court should have required payment of the money judgment, decreed in the. main cause before granting permission to file the.bill of review. These contentions are untenable. True- it is that in analogy to the time allowed by law for an appeal to .this court from a final decree of the District Court of Porto Rico, 'the bill of review'should have been filed in two years from June 8,' 1901, the date when the final decree sought to be reviewed was entered, and the bill of review'was not actually filed until Juné 22, 1903. But the bill was presented for filing on February 2, 1902, and it is plain that the failure of the complain-- . ..ants in the bill of review to actually file the same until June 22, 1903, was occasioned by the action of the court in not sooner passing upon the application for leave, to file. Under such circumstances, we think the time which elapsed between the^ tendering of the bill for filing and tbe permission given to file .-Should not be counted'in applying the two years’ limitation. Ensminger v. Powers, 108 U. S. 292. As respects the granting of permission to file the bill of review, the court was vested with a judicial discretion to permit such filing without a previous payment of the moneys awarded by the decree sought-to.be reviewed,.and there was no abuse of such discretion in .giving leave to. file,- conditioned upon the furnishing of the indemnity bond which was thereafter executed. As to the .alleged error -in vacating the decree entered in and. dismissing the original-cause. — In the court below the allegation attacking the jurisdiction of the ..court-over the original cause was&s-'follows: “ That this .court did not .have jurisdiction <of the original cause-and bilí ¡of -complaint, for the reason ¡that, ¡according to the allegations'.of .said .bill, all the parties plaSmitiff -.were foreign subjects, and all the parties defendant were .citizens of Porto Rico, there being no citizen of the United States ¡or.of a State of the United States a party defendant, and no -other.or sufficient ground or reason for the jurisdiction of this court is in the said original bill set forth sufficient to give this court jurisdiction of the said cause.” The bill in the main cause was filed in December, 190®. At that time the jurisdiction of the court below was fixed and limited by § 34 of the act of Congress of April 12, 1900, commonly known as the Foraker Act, which established civil government in Porto Rico. It was provided in the section that the District Court of the United States for Porto Rico “shall have, in addition to the ordinary jurisdiction of District Courts of the United States, jurisdiction of all cases cognizant in the Circuit Courts of' the United States, and shall proceed therein in the same manner as a Circuit. Court.” That, in view of the parties to the controversy, the case would not have been cognizable in a Circuit Court of the United States is obvious, and hence, manifestly, the court below was without jurisdiction under the act of 1900. It is urged, however, that as the final decree in the main cause was entered in June, 1901, although the court was clearly without juris-i diction to entertain the cause when the bill was filed, as no question as to jurisdiction had been raised, the court had power to enter the decree by virtue of the third section of the act of March 2, 1901,. 31 Stat. 953, chap. 812, .reading as follows: • “That the jurisdiction of the District Court of the United States for Porto .Rico-in civil cases shall, in addition to that conferred by the ;act of .April twelfth, iriineteen hundred, extend to and embrace'controversies wherce 'the ¡parties, or either -of them, are cifcms-oUthe United States, .®r >,citizens .or subjects of a foreign‘State .or States, wherein the ¡matter sin dispute exceeds, exdlansiwe.d'f.interest or costs, the,-aum-or value idffon.e thousand dolairs."’ Pacific R. Co. v. Ketchum, 101 U. S. 289, 298, Is .cited ¡as au-ithority for the proposhaon. Iii that case, however, not -only •was mo objection made toy the parties in the progress -of the cameito the right of the court to proceed, but the decree when rendered was consented to,, and the ruling was that although “Consent cannot give the courts of the United States jurisdiction, it ,may bind the parties and waive previous errors, if when the court acts jurisdiction has been obtained.” A brief consideration, however, of the circumstances in this case demonstrates that the Ketchum case is not in point. The last appearance of the defendants in the litigation in the main cause was on January 31, 1901, when a stipulation was made in respect to the tíme for pleading to the bill, and, of course, an exertion of jurisdiction by the court was neither invoked by the defendants nor consented to by them after the enactment of the amendatory statute of 1901. Under such circumstances it cannot be held that the defendants were estopped from availing of the objection of want of jurisdiction. The additional contention is made that the ease Presented by the bill in the main cause was one arising under the laws of the United States, and that because thereof' jurisdiction existed, irrespective of the want.of citizenship of the parties. The argument is that the complainants, in their bill, made reference to the provisions of an order of the military governor of Porto'Rico concerning “suspension of payments,” which, ' if given -proper effect, Would have prevented 'the- accomplishment of the fraud which it was- the object of the bill to prevent. This order thus referred to, it is said, was, in legal effect, a law of the United States, and the reference to and reliance upon, its provisions was v an invoking of the jurisdiction of the court on the,Federal ground that the case was one arising undfer the laws ofthe-.United States.' In our opinion, however, there, is not even color for the proposition that the bill presented a controversy arising under a -law of the United States, even if the military order referred to be. treated as a law of the United States. To sustain such a contention it must appear that' a controversy of that nature was called to the attention of the lower court in such a way as to invoke its action thereon. In other words, after a case has been decided below parties may not, for the purpose of a review by this court, attempt to inject a Federal question into the cause by suggesting that it would have been possible by a latitudinarian construction of the pleadings to 'suggest that a right under the Constitution or a law of the United States was'relied upon. And of course in saying this we must not be understood as intimating that the assumed Federal question,, even if it had been called to the attention of the court below, would have had sufficient substantiality to have been the basis for jurisdiction. ' Affirmed.