Sheldon v. Sill

Supreme Court of the United States · 1850 · Federal Courts

Federal CourtsSubject Matter JurisdictionDiversity JurisdictionAssignee Clauseinferior federal courtsstatutory jurisdictionArticle IIIJudiciary Act

Facts

Sill, a citizen of New York, filed a bill in the federal Circuit Court for Michigan against Sheldon seeking to recover the amount of a bond and mortgage. The bond and mortgage had been assigned to Sill by Hastings, the President of the Bank of Michigan. Sheldon pleaded that the bond and mortgage had originally been given by a citizen of Michigan to another citizen of Michigan, and that because Sill sued as assignee, the Circuit Court lacked jurisdiction. The jurisdictional question arose under the eleventh section of the Judiciary Act, which barred suits by assignees to recover the contents of a chose in action unless the assignor could have sued in federal court.

Issue

Whether Congress's statutory restriction on suits by assignees in the federal circuit courts is valid under Article III, and whether an assignee of a bond and mortgage is an assignee of a "chose in action" within that restriction.

Rule

Inferior federal courts created by Congress have only the jurisdiction that Congress confers by statute, and Congress may withhold from such courts jurisdiction over enumerated Article III controversies so long as it does not confer jurisdiction beyond the Constitution. A suit by an assignee to recover a debt secured by a bond and mortgage is a suit by an assignee of a chose in action within the Judiciary Act's limitation.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Nora Patel, a citizen of Illinois, sues Daniel Reed, a citizen of Indiana, in a federal trial court in Chicago over a contract dispute worth $200,000. Congress has enacted a statute withholding federal jurisdiction over all contract actions between private citizens, while leaving other diversity suits available.

Daniel moves to dismiss, arguing that the court lacks subject-matter jurisdiction despite complete diversity. How should the court rule?

Explanation. The motion should be granted. The controlling rule is that inferior federal courts created by Congress possess only the jurisdiction Congress confers by statute. Article III sets the outer constitutional boundary of federal judicial power, but it does not itself distribute all that power to lower federal courts. Therefore, Congress may validly withhold from inferior federal courts jurisdiction over a class of controversies, even if those controversies fall within Article III.