UNITED STATES SUPREME COURT DECISIONS ON-LINE

Blake v. McClung, 172 U. S. 239 (which case was brought here by writ of error to the Supreme Court of the Tennessee,) having been remanded to that court, and the mandate having gone down, the counsel of Blake and others moved for the entry of a decree placing them in the same class and on exact equality with the Tennessee creditors in respect to the distribution of the assets of the insolvent company among its creditors, but this the state supreme court declined to do, and entered a decree that Blake and others were entitled to participate in the assets on the basis of a broad distribution of the assets of the corporation among all clubjuris

Page 175 U. S. 115

of its creditors without preference or priority, as though the act of 1877 had not been passed; that there should be a computation of the aggregate indebtedness due from the corporation to its creditors of every class wherever residing, whereupon Blake and others should be paid the percentage and proportion found to be due to them on that basis, and that the residue of the estate of the insolvent company should be applied first to the payment of the indebtedness due to the creditors of the corporation residing in Tennessee as provided in section five of the act of 1877, and then pro rata to the payment of the debts of the alien and nonresident creditors of said corporation other than Blake and others. To this decree Blake and others duly excepted, but, insisting that that court had not complied with the mandate of this Court, applied for leave to file a petition for mandamus to compel such compliance. Held that without inquiring whether the conclusions of the Supreme Court of Tennessee were or were not in harmony with the views expressed by this Court, the remedy of petitioners for the alleged error in the decree of that court, if any, is by writ of error, and not by mandamus, the remedy on error being not only entirely adequate, and open to be sought unrestrained by the amount involved, but, in respect of dealing with state tribunals, being manifestly the proper remedy.

The Embreeville Freehold, Land, Iron & Railway Company, Limited, was a corporation organized under the laws of Great Britain and Ireland for mining and manufacturing purposes, carrying on business in the State of Tennessee, as authorized by a law of that state of March 19, 1877. The fifth section of the act gave priority in the distribution of assets to resident creditors of the state. The company having become insolvent, McClung and others filed an original creditors' bill in the proper court, asking the appointment of a receiver and the administration of the affairs of the company as an insolvent corporation. The case resulted in a final decree by the Supreme Court of Tennessee adjudging that the Tennessee creditors were entitled, under said section, to priority in the distribution of the assets over simple contract creditors of other states and countries. Among the creditors affected were C. G. Blake and Rogers, Brown & Company, citizens of the State of Ohio, and the Hull Coal & Coke Company, a corporation of Virginia, who, being dissatisfied, sued out a writ of error from this Court. And it was held, reversing the decree of the state supreme court, that the fifth section of the act of 1877, insofar as it gave priority to clubjuris

Page 175 U. S. 116

Tennessee creditors over creditors of the same class of other states of the Union, was in violation of the second section of the fourth article of the Constitution, providing that "the citizens of each state shall be entitled to all privileges and immunities of citizens in the several states," but it was also ruled that a corporation created under the laws of another state was not a "citizen" within the meaning of this clause. Blake v. McClung, 172 U. S. 239, 172 U. S. 258, 172 U. S. 262.

In the opinion, among other things, it was said:

"We adjudge that, when the general property and assets of a private corporation lawfully doing business in a state are in course of administration by the courts of such state, creditors who are citizens of other states are entitled, under the Constitution of the United States, to stand upon the same plane with creditors of like class who are citizens of such state, and cannot be denied equality of right simply because they do not reside in that state, but are citizens residing in other states of the Union."

The judgment was in these terms:

"The final judgment of the Supreme Court of Tennessee must be affirmed as to the Hull Coal & Coke Company, because it did not deny to that corporation any right, privilege, or immunity secured to it by the Constitution of the United States. As to the other plaintiffs in error, citizens of Ohio, the judgment must be reversed, and the cause remanded for further proceedings not inconsistent with this opinion, and it is so ordered."

The mandate having gone down, the counsel of Blake and Rogers, Brown & Company moved for the entry of a decree placing them in the same class and on exact equality with the Tennessee creditors in respect to the distribution of the assets of the insolvent company among its creditors, but this the state supreme court declined to do, and entered a decree that Blake and Rogers, Brown & Company were entitled to participate in the assets on the basis of a broad distribution of the assets of the corporation among all of its creditors without preference or priority, as though the act of 1877 had not been passed; that there should be a computation of the aggregate indebtedness due from the corporation to its creditors of every clubjuris

Page 175 U. S. 117

class, wherever residing, whereupon Blake and Rogers, Brown & Company should be paid the percentage and proportion found to be due to them on that basis, and that the residue of the estate of the insolvent company should be applied first to the payment of the indebtedness due to the creditors of the corporation residing in Tennessee as provided in section five of the act of 1877, and then pro rata to the payment of the debts of the alien and nonresident creditors of said corporation other than Blake and Rogers, Brown & Company. Beard, J., dissented. 52 S.W. 1001.

To this decree Blake and Rogers, Brown & Company duly excepted, but, insisting that that court had not complied with the mandate of this Court, applied for leave to file a petition for mandamus to compel such compliance.