Executors of Fooks v. Ghingher

Offutt, J., delivered the opinion of the Court. The! Central Trust Company of Maryland, at the close of business on September 2nd, 1931, placed its affairs and assets in the hands of George W. Page, Bank Commissioner of Maryland, as receiver for final liquidation. ⁶¹⁵ As the result of a proceeding initiated by him in the Circuit Court for Federick County, in equity, that court assumed jurisdiction of the property and business of the company, and continued Page as receiver. On October 24th, 1932, the same court ordered the receiver to collect from the stockholders of the trust company an amount of money equivalent to the par value of the stock which they respectively held in it.

Later Page resigned as receiver, and John J. Ghingher, who succeeded him as Bank Commissioner, was appointed in his place. On June 20th, 1933, Ghingher filed in the same court his bill of complaint against Nelson H. Fooks and seventy-two others, stockholders of the Central Trust Company, in which he prayed that the defendants be required to pay to him the sums due and payable respectively by them on account of such assessments. Or, stated more briefly, he brought the suit to enforce the double liability imposed by Code, art. 11, sec. 72, on the defendant stockholders to the full amount of the par value of the stock respectively held by them. Nelson H. Fooks appeared and answered, the case was heard, and on February 24th, 1934, the court decreed that he pay to the receiver $1,750, which was the full par value of the stock of the Central Trust Company, standing in his name on its books.

In Allender v. Ghingher, 170 Md. 156, 158 , 183 A. 610 , the court considered the appeals of two groups of stockholders of the Central Trust Company, who had been made defendants in a suit brought against each group for the same purpose. The facts of those cases were in all respects identical with the facts involved in this, which is against a third group of the- stockholders of that company. In those cases the defendants demurred to the respective bills on the ground that the complainant had a full, adequate, and complete remedy at law, and that, consequently, a court of equity was without jurisdiction to grant the relief prayed. The trial court rejected that contention, sustained the right of the receiver to maintain the suits, and overruled the demurrers, but on appeal ⁶¹⁶ its orders were reversed, and it was decided that the trial court was without jurisdiction, because, as stated by Judge Johnson for this court, “The liability of the stockholders is several and not joint; and where the assessment is for less than the full amount of such liability the suit may be either at law,or in equity, but when the order or assessment is for the full amount of the par value of the stock, the suit against thej stockholders must be at law, unless there are special facts existing requiring the interposition of- a court of equity.

Kennedy v. Gibson (Md. 1869) 8 Wall. 498 , 19 L. Ed. 476 ; Bundy v. Cocke (Ky. 1888) 128 U. S. 185 , 9 S. Ct. 242 , 32 L. Ed. 396 ; Stanton v. Wilkeson (D. C. N. Y. 1876) 8 Ben. 357 , 22 Fed. Cas. page 1074 , No. 13299; Young v. Wempe (C. C. Cal. 1891) 46 Fed. 354 ; Bailey v. Tillinghast (Ohio 1900) 99 Fed. 801 , 40 C. C. A. 93 , affirming (C.C. 1897) 86 Fed. 46 ; Parker v. Robinson (Mass. 1895) 71 Fed. 256 , 18 C. C. A. 36 ; Casey v. Galli (1876) 94 U. S. 673 , 24 L. Ed. 168 ; Zimmerman v. Carpenter (C. C. S. D. 1898) 84 Fed. 747 ; Rankin v. Miller (D. C. Del. 1913) 207 Fed. 602 ; Bailey v. Sawyer (C. C. Minn. 1877) Fed. Cas. No. 744; Hale v. Allinson, 188 U. S. 56 , 23 S. Ct. 244 , 47 L. Ed. 380 . See, also, 3 R. C. L. 415; 7 C.J. 512; United States v. Knox, 102 U. S. 422 , 26 L. Ed. 216 ; Studebaker v. Perry, 184 U. S. 258 , 22 S. Ct. 463, 466 , 46 L. Ed. 528 .” 170 Md. 156, 161 , 183 A. 610, 613 . After the passage of the decree in this case, Nelson H. Fooks died, testate, and James R. Phillips, Jr., and Herbert C. Fooks were appointed executors of his estate.

There was no appeal from that decree, but on November 23rd, 1936, the executors filed in the case a petition to strike out the decree on the ground that the trial court had no jurisdiction over the subject-matter of the suit, and that its decree was therefore void. The court on January 9th, 1937, dismissed that petition, and from that order this appeal was taken. The defense interposed by Nelson J. Fooks to the suit against him was that he had been induced to subscribe to the stock of the Central Trust Company, standing ⁶¹⁷ in his name, by false representations of material facts made to him by Emory L. Coblentz, then its president. That issue was decided adversely to him, on the theory that he had waived any right he may have had to object to the subscription on that ground, and the decree of February 24th, 1934, was entered.

He did not object to the jurisdiction of the court either prior to the decree, or at any time thereafter, nor was any such objection made until raised by his executors some two years and nine months after the decree was entered. If he had demurred to the bill of complaint, and had appealed from any adverse decree or order, the bill in this case must have been dismissed, as the bill in Allender v. Ghingher was dismissed, on the ground that, since the complainant had a full, adequate, and complete remedy at law, a court of equity had no jurisdiction to grant the relief prayed. He did not demur, nor did he object to the jurisdiction of the court in any way, but submitted to the jurisdiction and to the trial of the case on its merits, and he failed to appeal from the decree, which was adverse to his contentions. The question presented by this appeal, therefore, is whether the appellants now, long after that decree has become enrolled, and long after the time within which an appeal could have been taken has passed, are entitled to have it rescinded and stricken out on the ground that the court had no jurisdiction to enter it, and it is a nullity.

Assuming, without deciding, that that question may be raised by a petition filed in the case rather than by a bill of review (Straus v. Rost, 67 Md. 465 , 10 A. 74; Thurston v. Devecmon, 30 Md. 210, 216 ; Mallery v. Quinn, 88 Md. 38, 43 , 40 A. 1079 ; 10 R. C. L. 573), it is quite certain that the position of the petitioner is no stronger than it would have been had he raised it by a bill of review. A bill of review must ordinarily be filed within the time limited for taking an appeal (10 R. C. L. 572; Watkinson v. Watkinson, 68 N. J. Eq. 632, 60 A. 931 ; 69 L. R. A. 397, 6 Ann. Cas. 326, and note; 20 Am. Dec. ⁶¹⁸ 163, note; Beach Mod. Eq.

Pr. secs. 852, 864; Miller’s Equity Proc., see. 299; Hirons v. Hubbell, 153 Md. 697 , 142 A. 380 ), and in any case the petitioner, or the complainant in a bill of review, must act with reasonable diligence. In the case of nonresidents of full age, the time for filing such a bill is limited to twelve months from the date of thie decree (Code, art. 16, sec. 133), and in Presstman v. Mason, 68 Md. 78, 91 , 11 A. 764, 766 , the court said: “But besides all this, these appellees have failed to file their bill of review within the time which practice in this state has thoroughly 'established as necessary. Both in England and in this country the filing of bills of review is ordinarily restricted to a period within which an appeal may be taken. 2 Daniell, Ch. Pr. 1580, 1581, and note; Alexander Ch.

Pr. 179; Berrett v. Oliver, 7 G. & J. 191, 207 ; Hitch v. Fenby, 4 Md. Ch. 190 ; Id., 6 Md. 218 . The Maryland authorities just cited fix the period after which bills of review ordinarily cannot be filed at nine months, which was the period within which appeals in equity could be prosecuted before the adoption of the new 'equity rules, which have shortened the time for appeal; and as this court, under constitutional authority, has made a rule for the expediting of business, requiring all appeals to be taken within sixty days, we are not hereby to be understood as deciding that hereafter bills of review must be filed within that period, instead of nine months as heretofore practiced. Parties are required to use reasonable diligence; and as respects the ignorance alleged, the question is not what a party actually did know, but what, by using due diligence, he might have known. Hitch v. Fenby, 4 Md. Ch. 190 .” In- this case the petition was filed two years and nine months after the decree which, they now attack had been entered.

So long a delay is, under the most liberal rule recognized by what may be called the common law of equity practice, or by the settled practice of this state, a complete bar to the relief sought by the petitioners, unless the decree was a nullity. So that the decisive question is, Was the decree of the ⁶¹⁹ Circuit Court for Frederick County, in equity, filed on February 24th, 1984, a nullity? If the decree is utterly void it may be attacked anywhere, at any time, by any person affected by it, for, while a merely voidable judgment or decree may only be vacated by an attack made in proper form and within a reasonable time, 34 C. J. 511. “A judgment void upon its face and requiring only an inspection of the record to demonstrate its invalidity is a mere nullity, in legal effect no judgment at all, conferring no right and affording no justification. Nothing can be acquired or lost by it; it neither bestows nor extinguishes any right, and may be successfully assailed whenever it is offered as the foundation for the assertion of any claim or title.

It neither binds nor bars any one. All acts performed under it and all claims flowing out of it are void. The parties attempting to enforce it may be responsible as trespassers. The purchaser at a sale by virtue of its authority finds himself without title and without redress.

No action upon the part of the plaintiff, no inaction upon the part of the defendant, no resulting equity in the hands of third persons, no power residing in any legislative or other department of the government can invest it with any of the elements of power or of vitality. * * * Such a judgment has been characterized as a dead limb upon the judicial tree, which may be chopped off at any time, capable of bearing no fruit to plaintiff but constituting a constant menace to defendant.” Freeman on Judgments, sec. 322. See, also, 34 C. J., 509, 514, 515. The judgment or decree of a court which had no jurisdiction to enter it is void (Dorsey’s Lessee v. Garey, 30 Md. 489 ; Cockey v. Cole, 28 Md. 276 ; Baltimore v. Porter, 18 Md. 284 ; Clark v. Bryan, 16 Md. 171, 174 ; 34 C. J. 528) and in Bolgiano v. Cooke, 19 Md. 375, 394 , it was said: “ ‘The true test of jurisdiction is, whether a demurrer will lie to a bill.’ * * * The allegations being sufficient to give jurisdiction, no demurrer to the petition for that cause could have been sustained. ‘If this be so, neither the erroneous action of the Court, after filing the petition, nor defec ⁶²⁰ tive proof, could affect the question of jurisdiction.’ Tomlinson v. McKaig, 5 Gill, 276 .” See Lee v. Carrollton Sav. Assn., 58 Md. 301, 304 ; Dunn v. Wilmer, 131 Md. 494, 500 , 102 A. 763 .

In Freeman on Judgments, sec. 325, the author notes that in many cases, in which the courts have had occasion to consider whether decrees were void or voidable, little effort has been made to discover or define the “invalidating elements or matters” in particular judgments, and he states that, owing to the variety of facts and circumstances that arise in the course of judicial proceedings, “it is not easy to deduce a principle that would be a test in every case of the void or voidable character of the proceeding.” He adds that no specific description of a void decree may be framed which does not conflict with the decisions of many courts. But he says: “Broadly speaking nullity of judgments results from one or more of the following causes: 1. Want of a legally organized court or tribunal; 2. Want of requisite jurisdiction over the subject matter or the parties or both; 3.

Want of power to grant the relief contained in the judgment.” Another definition is given in 34 C. J. 531, where it is said: “The defect of jurisdiction may be either in respect to the person, the subject matter, or the authority to render the particular judgment or decree, .a judicial determination outside the issues being without jurisdiction and void.” Jurisdiction of the subject-matter means not simply the particular case to which the attention of the court is directed, but the class of cases to which it belongs, and) over which the authority of the court extends. Freeman on Judgments, sec. 337. So if a court of equity tried an indictment for some criminal offense, and entered a judgment and sentence against the defendant, its judgment would necessarily be void, and so perhaps it would be if it assumed jurisdiction of a purely tort action, for, as stated in Freeman on Judgments, sec. 337 p. 676: “Courts of equity exercise a well defined jurisdiction over certain classes of matters; a jurisdiction ⁶²¹ largely inherent in the court although sometimes enlarged or curtailed by statutes. Any attempt by such a court to hear and determine a case not within either its inherent or statutory powers would result in a void decree rendered without jurisdiction of the subject matter, as where it undertakes to adjudicate the issues in a contested election case, a matter entirely outside its powers.” The term “jurisdiction,” as used in defining the powers of a court of equity, has, a different and narrower meaning than that ordinarily given to it, because of the peculiar nature of those courts, and is used in contradistinction to “jurisdiction” in general, and “common law” jurisdiction in particular.

Pomeroy Equity Jur. sec. 129, Hunt v. Hunt, 72 N. Y. 217, 228-280 . In the same work, the author says: “In its most general sense the term ‘jurisdiction,’ when applied to a court, is the power residing in such court to determine judicially a given action, controversy, or question presented to it for decision. If this power