Dyer v. Stauffer

The United States brought an equity suit in the court below against the stockholders of a defunct corporation, alleging that taxes were due from it, that the defendants had received its assets on distribution, and that they should restore enough to pay these taxes. There were due personal service and, upon default, a decree as prayed. When an execution was levied, the defendants in that suit filed this bill against the United States marshal to enjoin collection. Their claim is that the first decree was invalid, because the bill therein did not show a judgment at law against the corporation, and because the corporation was not made a party defendant. The court below dismissed this present bill. It was in effect, though not so named, a bill of review. The errors alleged being apparent on the face of the record, there can be no relief at this time, unless there had been such a lack of jurisdiction as to make the decree void, and upon such lack of jurisdiction appellant relies.

It is often said that a court of equity has no jurisdiction of a creditors’ bill, if there was no judgment at law, or if an indispensable party is not on the record. This is not an accurate use of the term. If the relief sought is of an equitable character, and the parties against whom it is sought are in court, it is clear that a court of equity has jurisdiction. Upon objection duly made, sometimes without objection, it should decline to proceed without necessary parties or lacking prescribed conditions; but, if it does proceed, its action is erroneous, not void. The distinctions between lack of jurisdiction and lack of a good case have been pointed out repeatedly, most recently in General Investment Co. v. New York Central; 271 U. S. 228, 230, 46 S. Ct. 496, 70 L. Ed. 920.

The decree is affirmed.