ERROR TO THE SUPREME COURT OF THE STATE OF NEW YORK.
MR. JUSTICE WHITE, after making the foregoing statement, delivered the opinion of the court.
As in the complaint the plaintiff in error unquestionably set up a right to recover as the result of a judicial sale made under decrees, both of courts of the United States and of a State, Federal questions exist in the record, and the motion which has been made to dismiss is therefore denied.
Coming to the merits, the questions for decision are whether due effect was given by the Court of Appeals of New York to the decrees in question. Jacobs v. Marks, 182 U.S. 583, 587.
Two questions were considered by the state court in its opinion, viz.: 1, the meaning and effect of the contract entered into between Beckwith and the Memphis Appeal Company; and, 2, whether the rights of Beckwith under the contract had been conclusively adjudicated by the prior litigation in Tennessee.
The agreement referred to was evidenced by two letters and endorsements thereon, and a copy thereof is contained in the margin.*fn1
In disposing of the first question the court held that "The clause of the agreement giving to Beckwith the right to collect all of the bills was evidently intended to give him the control of the proceeds resulting from the advertisements, so that he could apply the same upon his loan to the amount of $1000 per month," and that the clause referred to "was in the nature of an equitable pledge of the receipts for that purpose." It was further held that the receiver of the newspaper took possession of the assets and business thereof subject to the liens and obligations of the corporation, (in other words, took only the interest which the corporation had in the property which it assumed to possess and own,) and as the receiver "accepted and published the advertisements procured by the defendant (Beckwith), he (the receiver) must be deemed to have done so under the contract which the defendant (Beckwith) had with the corporation, and under that contract the defendant had the right to collect the moneys accruing for such advertisements, and to retain out of such collections a sum not to exceed $1000 per month, to be applied upon the loan." It is manifest that the question of the proper construction of this contract being non-Federal in its nature, is not subject to review, and we consequently assume that the construction was correct.
The second question was treated as involving only the issue of res judicata. Considering the final decree entered in the consolidated action, and the decree as subsequently entered by the trial court upon the mandate of the Supreme Court of Tennessee, it was decided that the Tennessee court "did not adjudicate nor attempt to determine the right of Beckwith to
the moneys received by him for advertisements inserted in the paper by the receiver after his appointment." The court then said -- evidently assuming that the last decree embodied the direction for sale -- "Under the judgment the purchaser became entitled to all the moneys due and owing to the receiver by reason of the publication of the paper, but moneys that did not belong to the receiver, or to which he was not entitled, did not pass to the purchaser, and we find nothing in the prior decree that is an adjudication upon this question." In effect, therefore, the Court of Appeals of New York construed the decrees of sale and held that the direction to sell merely authorized a sale of the right, title and interest of the receiver in the accounts in question and left for future determination, in any controversy which might arise in respect thereto, the question of the extent of the interest, if any, of the receiver in such accounts.
The sole contentions which are open for our consideration are, did this judgment fail to give full faith and credit to the judicial proceedings in the Tennessee courts as required by section 1 of article IV of the Constitution, and did it deny due efficacy to a title or right claimed under an authority exercised under the United States. It is strenuously argued that, properly interpreted, the decrees directed a sale of the accounts as they stood on the books of the receiver, and that the effect of the decrees and the sale made thereunder was that any right to or ...