U.S. Supreme Court Keary v. Farmers' & Merchants' Bank of Memphis, 41 U.S. 16 Pet. 89 89 (1842)
Keary v. Farmers' and Merchants' Bank of Memphis
41 U.S. (16 Pet.) 89
ERROR TO THE CIRCUIT COURT OF THE UNITED
STATES FOR THE DISTRICT OF MISSISSIPPI
A promissory note was drawn by Hugh M. Keary, and Patrick F. Keary, dated at Pinkneyville, Mississippi, in favor of Charles A. Lacoste, payable twelve months after date at the Planters' Bank of Natchez. The note was endorsed by Charles A. Lacoste to the Farmers' Bank of Memphis, Tennessee. The note having been protested for nonpayment, the Farmers' Bank of Memphis instituted a suit in the Circuit Court of Mississippi against the drawers and endorser, alleging that they were citizens of Tennessee and that the defendants were citizens of Mississippi. The action was against the drawers and endorser of the note, they being joined in the suit in pursuance of a statute of Mississippi of 1837 which required that in all actions on bills of exchange and promissory notes, the plaintiff shall be compelled to sue the drawers and endorsers, resident in the state in the county where the drawers live, in a joint action. This statute had been adopted by the judge of the District of Mississippi, in the absence of the judge of the supreme court assigned to that circuit, by a rule of court, and in conformity with the rule, this suit was instituted. The defendants pleaded to the jurisdiction of the court on the ground that the drawers and drawee of the note were, when it was made, citizens of Mississippi, and this plea being overruled on demurrer, the circuit court, on the failure of the drawers to plead over and the failure of Lacoste to appear, gave a judgment for the plaintiff.
This action cannot be sustained in the circuit court jointly against the drawers and endorser of the note. The statute of Mississippi is not in force or effect in the courts of the United States, the sole authority to regulate the practice of the courts of the United States being in Congress.
So far as the acts of Congress have adopted the forms of process and modes of proceeding and pleadings in the state courts or have authorized the courts thereof to adopt them and they have actually adopted them, they are obligatory, and no farther. But no court of the United States is authorized to adopt by rule any provisions of state laws which are repugnant to or incompatible with the positive enactments of Congress upon the jurisdiction or practice or proceedings of such courts.
The law of Mississippi is repugnant to the provisions of the act of Congress giving jurisdiction to the courts of the United States and organizing the courts of the United States.
No suit against the drawers of the note could be maintained in the circuit court. The eleventh section of the Judiciary Act of 1789, allows suits on promissory notes to be brought in the courts of the United States in cases only where the suit could have been brought in such court if no assignment had been made. The makers and payee of the note having been citizens of Mississippi, the circuit court had no jurisdiction of a suit against the makers. Between Lacoste, the endorser, and the plaintiffs below it was different, for on his endorsement to citizens of another state
he was liable to a suit by them in the circuit court. But the joining of those who could not be sued in the circuit court with the endorser made the whole action erroneous. The action was founded on distinct and independent contracts.
In the District Court for the Southern District of Mississippi an action was instituted by the President, Directors and Company of the Farmers' and Merchants' Bank of Memphis, citizens of Tennessee, against the plaintiffs in error, Hugh M. Keary, Patrick F. Keary and Charles A. Lacoste, citizens of the State of Mississippi, on a promissory note made by Hugh M. Keary and Patrick F. Keary in favor of and endorsed to the bank by Charles A. Lacoste. The action was afterwards transferred to the Circuit Court of the United States for the District of Mississippi.
By a statute of Mississippi, suits on promissory notes are prohibited to be brought in any other form than against all the parties, drawers and endorsers in a joint action, and the action must be prosecuted in the county in which the drawers reside. By a rule of the circuit court adopted by the district judge, sitting in the circuit court and in the absence of the judge of the supreme court assigned to sit in that circuit, the practice of the courts of Mississippi in conformity with the statute was adopted as the practice of the circuit court.
Process was served on all the defendants, and two of the defendants, Hugh M. and Patrick F. Keary, entered a plea to the jurisdiction of the court, averring that the cause of action, if any, accrued to the plaintiffs by virtue of the promissory note, made payable to the order of Charles A. Lacoste and by him, Lacoste, endorsed to the plaintiffs, and that at the time of making the aforesaid note and at the time of the commencement of the plaintiffs' action, the said defendants and Charles A. Lacoste were citizens and residents of the said State of Mississippi. The plaintiffs below, the defendants in error, demurred to this plea, and the circuit court sustained the demurrer. The defendant, Lacoste, having made default and no further plea having been entered by the other defendants, the court rendered a joint judgment against all the defendants. The defendants prosecuted this writ of error.
STORY, Justice, delivered the opinion of the Court.
This is a writ of error to the Circuit Court of the District of Mississippi. The original action is assumpsit upon a promissory note signed by Hugh M. Keary and Patrick F. Keary, dated at Pinkneyville, in the State of Mississippi, on 18 February 1838, whereby (as the declaration alleges) the makers promised, twelve months after date, to pay to Charles A. Lacoste, by the name and description of Briggs, Lacoste & Company or order $4,863.55, payable and negotiable at the Planters' Bank in Natchez, and which note was endorsed by Lacoste by the name and description of Briggs, Lacoste & Company to the plaintiffs, the Farmers' & Merchants' Bank of Memphis. The declaration avers that the plaintiffs are citizens of Tennessee and that the defendants are citizens of Mississippi, the makers and the endorser being joined in the suit. This joinder was in pursuance of a statute of Mississippi of 13 May 1837 (Laws of Mississippi [edit. 1838] 717), whereby it is enacted
"That in all actions founded upon bills of exchange and promissory notes, the plaintiffs shall be compelled to sue the drawers and endorsers, living and resident in this state, in a joint action, and such suit shall be commenced in the county where the drawer or drawers reside, if living in the state, and if the drawer or drawers be dead or reside out of the state, the suit shall be brought in the county where the first endorser resides."
It seems that this statute had been adopted by the district judge of the District of Mississippi in the absence of the judge of this Court assigned to that circuit by a rule of court, and upon the footing of that rule, the present suit was brought.
The makers of the note pleaded a plea to the jurisdiction of the
court, averring that the cause of action accrued to the plaintiffs by virtue of the promissory note made payable to and endorsed by Lacoste to them, and that they, the makers, at the time of making the note and at the time of the commencement of the action, were citizens and residents of the State of Mississippi. To this plea there was a demurrer, which, upon the hearing, was overruled and the makers assigned to plead over, which, having failed to do, and Lacoste, the other defendant having failed to appear, judgment was finally rendered against all the defendants, and from that judgment the present writ of error has been brought to this Court.
The first and main question presented to us for consideration is whether the present action is sustainable in the circuit court jointly against the makers and the endorser under the circumstances disclosed in the record. In our judgment, it is not. The statute of Mississippi, proprio vigore, is of no force or effect in the courts of the United States, it not being competent for any state legislature to regulate the forms of suits or modes of proceeding or pleadings in the courts of the United States; but the sole authority for this purpose belongs to the Congress of the United States. So far as the acts of Congress have adopted the forms of process and modes of proceeding and pleadings in the state courts or have authorized the courts thereof to adopt them, and they have been actually adopted, they are obligatory, but no further. But no court of the United States is authorized to adopt by rule any provisions of state laws which are repugnant to or incompatible with the positive enactments of Congress upon the subject of the jurisdiction or practice or proceedings in such court.
It is obvious that the latter clause of the statute of Mississippi already cited, which provides for the bringing of suits upon bills of exchange or promissory notes in the county where the drawers live, or, under certain circumstances, in the county where the first endorser lives, is utterly incompatible with and repugnant to the known organization and jurisdiction of the courts of the United States. Suits in these courts are, by the Judiciary Act of 1789, ch. 20, § 11, to be brought in the district whereof the defendant (being a citizen of the United States) is an inhabitant or in which he shall be found at the time of serving the writ, and the
suits are cognizable in no other places than those assigned for the regular holding of the terms of the courts. There is no pretense, therefore, to say that the circuit court could by any rule adopt the state law upon this subject.
As little real ground is there for maintaining that the court had authority to adopt the other part of the state statute, requiring that the drawers and endorsers of bills of exchange and promissory notes should be compellable to be joined by the plaintiff in a joint action. The Judiciary Act of 1789, ch. 20, in the 11th section, gives jurisdiction to the circuit court of suits between a citizen of the state where the suit is brought and a citizen of another state, and, among other exceptions not applicable to the present suit, it excepts
"any suit to recover the contents of any promissory note or other chose in action in favor of an assignee unless the suit might have been prosecuted in such court to recover the contents if no assignment had been made, except in cases of foreign bills of exchange."
It is plain upon the language of this clause that as the makers and the payee of the promissory note in this case were all citizens of Mississippi, no suit could have been maintained between them (the original parties) in the circuit court. But the same objection does not apply to a suit on the same note by the plaintiffs, as endorsees, against their immediate endorser, Lacoste, for there is an immediate privity of contract between them, and they are citizens of different states. This was long since settled by the decision of this Court, in Young v. Bryan, 6 Wheat. 146. So that it is manifest that as between the makers and the plaintiffs, the present suit is not maintainable, and as between the endorser and the plaintiffs as endorsees it is maintainable, by the laws of the United States. The result, therefore, of giving effect to the statute of Mississippi and the rule of the court adopting the same would be either that the circuit court, in contravention of the express terms of the Judiciary Act of 1789, ch. 20, would be obliged to maintain jurisdiction over the makers, which is prohibited by that act, or else would be compellable to surrender jurisdiction over the endorser which the same act confers on it. Certainly such a doctrine cannot be asserted to be well founded in law. If it were admitted, it would enable the state legislatures, by merely changing the modes of remedial justice or requiring different parties, under different and
distinct contracts, to be joined in one and the same suit, to oust the courts of the United States of all the legitimate jurisdiction conferred upon them by the Constitution and the acts of Congress.
For these reasons we are of opinion that the present suit, so far as it respects the jurisdiction of the circuit court over the makers of this note, is ill founded, and that the plea of the makers to the jurisdiction is good in point of law, and that the suit being a joint action, founded upon distinct and independent contracts, is incapable of being sustained in the courts of the United States against any of the defendants. The consequence is that the judgment must be
Reversed and the cause remanded to the circuit court with directions that the plaintiffs take nothing by their writ.
This cause came on to be heard on the transcript of the record from the Circuit Court of the United States for the Southern District of Mississippi, and was argued by counsel, on consideration whereof it is now here ordered and adjudged by this Court that the judgment of the said circuit court in this cause be and the same is hereby reversed and annulled, and that this cause be and the same is hereby remanded to the said circuit court with directions to enter judgment for the defendants in conformity to the opinion of this Court.