Gravenberg v. Laws, 100 F. 1

100 F. 1 | 5th Cir. | 1900

Lead Opinion

SHELBY, Circuit Judge,

after stating the case, delivered the opinion of the court. !

In Sims’ Lessee v. Irvine, 3 Dall. 464, 1 L. Ed. 665, Mr. Justice Iredell said:

“It is of infinite moment, in my opinion, that principles of law and equity Should not be confounded, otherwise inextricable confusion will arise. Neither will be properly understood, and, instead of both being administered with useful guards which the policy of each system has devised against abuse, a heterogeneous mass of principles not intended to assort with eaqh other will be blended together, and the substance of justice will soon follow the forms calculated to secure it.”

Whatever may be thought now of this observation, when most of the states have blended by Code procedure equitable and legal remedies, the federal courts are required to observe in their procedure the distinction between legal and equitable rights and remedies. In Bennett v. Butterworth, 11 How. 674, 13 L. Ed. 859, Chief Justice Taney, delivering the opinion of the court, said:

“The constitution of the United States, in creating and defining the judicial power of the general government, establishes this distinction between law and equity; and a party who claims a legal title must proceed at law, and may undoubtedly proceed according to the forms of practice in such cases in the state court. But if the claim is an equitable one, he must proceed according to rules which this court has prescribed regulating proceedings in equity in the courts of the United States.”

It is settled beyond all controversy that under the constitution and laws of the United States the distinction between common law and equity must be maintained in the federal courts, although both jurisdictions are vested in the same courts. Fitts v. McGhee, 172 U. S. 516, 531, 19 Sup. Ct. 269, 43 L. Ed. 535; Hurt v. Hollingsworth, 100 U. S. 100, 25 L. Ed. 569. The suit that first invoked the jurisdiction of the court below was an action at law. It was a suit seeking a judgment on a contract for a fixed sum. It also sought a sequestration of properly of the defendants under the Louisiana practice, the petition containing allegations that the property would be removed from the state before the contract could be enforced. It is true that this petition also alleged that the plaintiff had a “lien and privilege” on the property sought to be sequestered. .But the suit was essentially a legal action, seeking a verdict and judgment, and it was so treated by the court. The case was tried as has been stated, and a verdict and judgment had for the plaintiff, and no question is brought here as to the regularity or validity of the verdict or judgment. The judgments brought here for review concern the third opponents or interveners. The purpose of the third opponents, as shown by their petitions, is not to assert a legal title to any specific portion of the property sequestered. The purpose disclosed in each petition is to assert and establish by the judgment of the court a privilege or lien on the properly or on the proceeds of its sale, and to have the court settle the order or priority of such liens. If the claim of a third opponent was for a certain portion of the property seized, there could be no objection to trying such issue at law. New Orleans v. Construction Co., 129 U. S. 45, 9 Sup. Ct. 223, 32 L. Ed. 607. Statutes authorize such practice in many of the states where property is seized on attachment or execution, and the same procedure'™ such states may he adopted by the federal courts, for it makes up and tries an issue at law. But in the1 instant case the petitions distinctly allege equitable rights, and seek the enforcement of liens, and the settlement of the priorities of the respective claims of the parties on the property sequestered, or on the funds arising from its sale. The result of a settlement of the issues presented, if the judgments prayed for were obtained, and the priorities of claimants settled, would be the settlement of the accounts of the syndic to the extent of distributing the fund in court. The record, it will be remembered, shows that the syndic is a party to the sjuit, and that'he propounds a claim to the fund.

The record presents a case with several equitable features. It is analogous to the marshaling of assets. Code Prac. La. art. 403. In a measure it involves the settlement of a trust, and the enforcement of liens. Besides, the petitions of third opponents, as framed, present jointly for trial at law nearly a hundred issues of fact necessary to be ascertained to settle the existence of nearly a hundred separate debts. The procedure at law is unfitted to the settlement of such controversies, and the practice in equity by reference to a master is well adapted to such contentions. So many conflicting-equities could not be settled by verdict and judgment at law, but could be adjusted by a decree in equity. The practice in the state courts of Louisiana is regulated by the following statute:

“Whenever a conflict of privileges arises between different creditors, all the suits and claims shall be transferred to the court, by whose mandate the property on which the privilege or right of mortgage is to be exercised, was first served on mesne process, or definitive execution; and said court shall proceed to class said privileges and rights of mortgage according to their rank and dignity, in a summary manner, after notifying all parties interested.” Code Prac. art. 126.

' Counsel for the plaintiffs in error contends that this statute should be followed in practice on the law side of the court, because at law the practice is the same in state and federal courts. Key. St. U. S. § 914. But the state practice at law is followed with the understanding, always kept steadily in view, that equitable and legal remedies are not to be united. Thompson v. Railroad Cos., 6 Wall. 134, 18 L. Ed. 765; Van Norden v. Morton, 99 U. S. 378, 25 L. Ed. 453. Third opponents or claimants, having an equitable interest in property attached or sequestered by process from a United States court, are not without remedy in siich court. But the remedy must be granted in a manner not to confuse by the procedure the boundaries of law and equity. The form of the proceeding and remedy afforded must be' determined by the facts and circumstances of the case. When, from the character of the intervener’s claim, the remedy sought is equitable in its nature, or when, from the circumstances of the case,' there is no adequate remedy at law by petition in the original case pending at law, a bill in equity must be filed. Such bill would not be original, but ancillary, and dependent. The jurisdiction of the court would be fixed by the original suit, and the residence of the parties to the dependent' bill or the amount in controversy would be immaterial. Railroad Cos. v. Chamberlain, 6 Wall. 748, 18 L. Ed. 859; Hill v. Kuhlman, 31 C. C. A. 87, 87 Fed. 498. The case of Krippendorf v. Hyde, 110 U. S. 276, 4 Sup. Ct. 27, 28 L. Ed. 145, distinctly points out the proper course where there is no remedy at law by intervention or petition. Property in that case was attached in a suit at law. A person not a party to the suit claimed the property, and he was made a party to assert his title. Under the laws of Indiana, where the case occurred, he could not be permitted to become a party to try his title. He therefore had no remedy by intervention in the case at law, and was stricken out as a party to the suit. Judgment was rendered in favor of the original plaintiffs, and the property levied on was ordered to be sold. The claimant, who had bonded the property, paid its valúe into the registry of the court. Now, his claim to the fund or property had never been tried, and he was clearly entitled to have his rights adjudicated. The court held that a bill could be maintained on the equity side of the same court. The opinion shows that any one, though not a party to the original suit at law, who had an equitable claim to the fund, or wlio had a claim to the fund.or property in eouyt, and who was without adequate legal remedy, could maintain such bill. In the instant case we do not think that on the law side the circuit court can grant the relief asked by the third opponents. The cases presented by their interventions contain the assertion of equitable, in contradistinction to legal, claims, and the facts, as disclosed by the record, make it impracticable to settle the issues tendered by proceedings at law.

In several of the petitions of third opponents there is a misjoinder of petitioners. Persons having rights of action arising out of several and distinct contracts with the same defendant, or several rights of action against the same defendant arising out of the same contract, cannot join as plaintiffs in one action against such defendant. 17 Am. & Eng. Enc. Law, 561, and cases there cited. The intervening petitions contain no allegations which authorize the several petitioners to join in one suit. No statute is cited that changes this general rule of pleading, and the Louisiana cases are in harmony with it. Dyas v. Dinkgrave, 15 La. Ann. 502; Mavor v. Armant, 14 La. Ann. 181; Favrot v. Parish of East Baton Rouge, 30 La. Ann. 606.

The order dismissing the petitions was made "after hearing evidence and argument of counsel.” There is no bill of exceptions in the record, and, consequently, we are not advised as to what this evidence proved or tended to prove. We will not comment further oh this aspect of the case, as the case is disposed of by the conclusions heretofore stated. The judgment of the circuit court is affirmed.

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Rehearing

On Petition for Rehearing.

SHELBY, Circuit Judge.

We have carefully examined the application for a rehearing and the cases cited by counsel. We are constrained to deny the application. The opposition of third persons, under the Louisiana practice, may take place:

“(t) When the third person making the opposition pretends to be the owner of the tiling which lias been seized. (2) When he contends that he has a privilege on the proceeds of the thing seized and sold.” Code Frac. La. 18T0, arfe 3U0.

Third opponents, like other interveners, may propound their claims on the law or equity side. 'Whether a bill in equity or a petition at law should be filed must be determined by the essential character of the case. If the third opponent is claiming the title to a specific chattel which 1ms been seized on execution, attachment, or sequestration, he proceeds at law. Van Norden v. Morton, 99 U. S. 378, 25 L. Ed. 453. When the claim asserted is equitable in its nature, or where there is no remedy at law, a bill in equity must be filed. Krippendorf v. Hyde, 110 U. S. 276, 4 Sup. Ct. 27, 28 L. Ed. 145. Unless this distinction was observed, we would have trusts and equitable liens enforced and mortgages foreclosed for third opponents or inter-veners in suits at law. The statutes cited show that third opponents may assert either legal or equitable claims upon property seized. They may assert claims, as other interveners, where their remedy at law is adequate, or they may assert claims under circumstances where there would be no legal remedy. In the one case, the remedy is at law; in the other, it is in equity. Considering the character of the claims asserted in the instant case, which is fully shown in the statement of the case, after careful re-examination of it, we are constrained to hold that they do not present a case for relief at law.

The learned counsel for the plaintiffs in error makes the following suggestion in the application for a rehearing:

“Tlie decree of tbe lower court, affirmed by this court without reservation, might be construed to be res adjudícala of the claims of third opponents who manifestly have an interest and a right to be heard, and this court should under all circumstances make such reservation In its decree.”

The judgment of the circuit court, which is affirmed, dismisses the “interventions and third oppositions” in question, “reserving the rights of said third opponents to assert their respective claims to the funds obtained in this suit, to be asserted at the proper time.” No subsequent order was made that affects this reservation. The exceptions that were filed to the intervening petitions did not raise questions, on the merits.

We think that the order dismissing the petitions was equivalent to a dismissal without prejudice. It is therefore unnecessary to modify the order. The application for a rehearing is denied.