67 F. 837 | 1st Cir. | 1895
These four cases are appeals from the decree of the circuit court in a bill in equity originally brought in the supreme judicial court of Massachusetts and removed to the circuit court. The bill was brought by Gregory against Frederic A. Pike, the testator of the present respondent, Mary H. Pike, and against William C. N. Swift, to recover two certain nonnegotiable promissory notes, made by Swift, and held by Mr. Pike, and alleged by Gregory to be his own property. On the petition of Swift and John C. Kemp Van Ee, who claimed to be interested in the notes, Kemp Van Ee was made a party respondent by order of the court, and against the objection of Gregory. He then filed a cross bill, in which the respondents were Mr. Pike and Swift, and also George W. Butterfield. Butterfield has been made a defendant on the application of himself and Swift, but there is. no assignment of error touching this. . He claimed an interest in the notes, and filed a cross bill, in which his interest is alleged as will hereafter appear. The notes were finally impounded in the hands of Mr. Stetson, then clerk of the circuit court, and afterwards such proceedings were taken that actions at law in the name of the payee of the notes were brought on the law side of the circuit court by Thomas H. Talbot, as attorney for Mr. Pike and his estate, and judgments obtained, which were paid into court by Swift, and the proceeds were transferred to the registry in this cause.
The cause came to final hearing, and a decree was made as follows, on the 8th day of March, 1894:
“(1) That from the fund in the registry of the court in this cause there be paid to the clerk of this court, as required by law in such case, one per cent, upon the whole of said fund. (2) That there he paid from said fund to the administrator of the defendant Swift, deceased, costs, to be duly taxed in favor of said defendant. (3) That for special services in connection with*843 «said fni'd, as set forth in his petition, there he paid to John G. Stetson the sum of eight hundred dollars. (4) That there be paid to the defendant John C. Ksmp Van Ee one-half of the proceeds of the fifteen thousand dollar note, with the accumulations thereon. (5) That there be paid to Mary H. Pike, executrix of the original defendant, Frederic A. Pike, since deceased, the sum of twenty-five thousand dollars, with interest thereon from January l, 1884, if the fund remaining in the registry of the court shall be sufficient for the payment, and, if not sufficient, the balance of said fund. (6) That the cross bill of the defendant George W. Butterfield bo dismissed. (7) That, after the payments hereinbefore decreed to be made to said clerk, the administrator of Swift and Stetson, and the amounts decreed to be paid to Kemp and Pike, as hereinbefore provided, the remainder of the fund, if any, be paid to the plaintiff Charles A. Gregory.”
It appears, by a comparison of the amounts thus decreed with the amount in the registry, that nothing will remain to be paid Gregory under the seventh clause of the decree. From this decree appeals have been taken by Gregory and Butterfield. Mr. Talbot, also, having filed in the court below a petition for an allowance for his counsel fees and costs out of the fund, appeals from the decree because there was no allowance of the former. We will proceed to examine such of the assigned errors in this decree as have been presented in the argument, so far as such examination seems necessary, iu order to reach a conclusion on the appeals; and we will first refer to the petition of Mr. Talbot.
He was employed by Mr. Pike and his estate to collect the notes which produced the fund now in the registry of the court. He was not employed, either expressly or by implication, by Gregory. He was, moreover, not employed by Kemp Yan Ee or Butterfield. ' He seems to have been acting throughout solely in the interest of Mr. Pike and of his estate. Therefore on no principle of law has he any claim except against them, or on their interest in the fund. By the thoroughly settled law in Massachusetts, he had no lien on the fund while on deposit on the common-law side of the circuit court, except for his taxable costs. All the cases cited by Mr. Talbot to establish a lien relate to the compensation of a trustee or his attorneys, or otherwise to the administration of a trust estate, or are of that kind wherein one person in a class of persons interested, having secured the fund for the common benefit, is entitled to be reimbursed his legal expenses out of it, and there seems to be no other lien in equity. Meddaugh v. Wilson, 151 U. S. 333, 14 Sup. Ct. 356, is the latest case of this class.
There is no federal case establishing a lien at common law in be half of an attorney beyond that given by the local law. The extent of the lien, therefore, of Mr. Talbot, while the fund was on the law side of the court, was his bill of costs. The transfer of the fund to the equity side of the court did not change the legal rights of any person in the fund, so that the extent of Mr. Talbot’s lien was precisely the same after the transfer as before. So far, however, as that part of the fund is concerned in which Kemp Van Ee has no Interest, it is the proceeds of notes which Mr. Pike held as collateral, and his estate is entitled to be allowed, as against Gregory, the cost of realizing the collateral. This is a clear principle of law. Therefore the decree below should have allowed Mrs. Pike, in addi
In regard to the appeals of Gregory, the assignments of errors disclose no controversy as to the merits of the decision of the court below. They relate solely to matters of procedure during the progress of the suit, and to a claim that the circuit court had no jurisdiction to determine the controversy. We will state these points so far as it seems necessary to discuss them.
As to the collection of the notes which were in Mr. Stetson’s hands, and the transfer of the funds from the law side to the equity side of the circuit court, some of the steps will be stated in another connection. Mr. Pike had a right, as against Gregory, to put the notes in judgment, and to realize the judgments, at least to the extent of having the fund paid into the common-law side of the court; and he had a right to control the notes so far as necessary'for that purpose. Independently of the orders of the circuit court, it was the duty of Stetson to permit the notes to be made available. If those orders were authorized, Stetson was required to comply with them. If not authorized, Stetson must be considered as having done, voluntarily what he could have been required by Mr. Pike to do by some suitable proceeding; and there can be no question that, in some way, Mr. Pike, or his estate, could have compelled Stetson to make the notes available for the purpose of obtaining judgments against Swift and a realization of the judgments. And, when this had been accomplished, the prayer against Swift, contained in Gregory’s original bill, justified, and, indeed, required, for Swift’s protection, that the fund should be brought into the court in equity. The most orderly method to accomplish this result, in the absence of the consent of all parties, would, perhaps, have been to have made some person receiver of the notes, and directed him to collect them, and pay the proceeds into the registry of the court in equity. What was done accomplished the same result in a less expensive manner. As the objections relate, not to the method of doing it, but to the doing of it at all, it is not necessary to consider them further.
As to the proceedings by which Kemp Van Ee was made a defendant in Gregory’s bill, and permitted to file a cross bill, Swift, who was a defendant, petitioned that Kemp Van Ee should be made a defendant, and Kemp Van Ee also petitioned to be made defendant, and both petitions were allowed; so that he properly stands as a defendant, if he could be made such, either on the petition of Swift or on his own. It now appears that Kemp Van Ee had an interest in the notes in Swift’s hands, and there is no doubt that Swift was entitled to be protected against this claim, if he proceeded in due form. One due form was to file a bill of interpleader, and pay the amount of the notes into court, and bring in nonresident parties, as provided in the act of March 3, 1875, c. 137, § 8 (18 Stat. 473); Greeley v. Lowe, 155 U. S. 58, 15 Sup. Ct. 24. If Gregory’s bill had then been
In the way attempted in the present case, there are no pleadings on behalf of the original plaintiff as against Kemp Van Ee, and could be none. The whole basis of making Mm a party defendant was in the allegations of Swift’s answer. This practice, although prevailing in some localities, is condemned, by necessary implication, in Shields v. Barrow, 17 How. 130, 145, by Justice Bradley, in 1873; in Searles v. Railroad Co., 2 Woods, 621, 625, Fed. Cas. No. 12,586; by Justice Blatchford, in 1868, in Drake v. Goodridge, 6 Blatchf. 151, Fed. Cas. No. 4,062; and in the notes to Daniell, Ch. Prac. (6th Am. Ed.) 286, 287. Some of the reasons for this are highly meritorious, others technical,—meaning not technical in the narrow sense of the word, but in its better sense.
First. Complainants ought not to be compelled into litigation with parties not of their own seeking. One may commence a proceeding very simple in its nature, and be content to take the risk of it; but, if other persons can force themselves into the litigation, what he conceives to be simple may become complicated, expensive, and interminable.
Second. There are ample remedies in case the plaintiff fails to unite all parties required to do equity, either by a bill of interpleader, or in the methods pointed out by Judge Cur lis in Shields v. Barrow, ubi supra. Therefore there is no occasion to resort to the extraordinary proceeding of making new parties without complainant’s consent.
Third. As already said, a case made up as this was presents no proper issue on which to base proofs for the determination of the court. This is not technical, in the narrow sense of the word, but leads to extraordinary results, as will be seen by reference to the next paragraph.
Fourth. The result which may come from bringing in a defendant, as was done in this case, shows the impropriety of it. A defendant thus brought in answers, and complainant refuses to file a replication. The only remedy is for the defendant to move a dismissal as against himself. The result is that he is dismissed from the case, and the case stands exactly as it did before he was brought in. Thus, by failing to reply, the plaintiff is able to bring the bill into its original state. It cannot be said that this can be avoided by setting down the case to be heard on bill and answer, because, as already said, there are no proper allega tions on behalf of the new defendant which would enable this to be effectually done.
It Is true that in the case at bar, if Kemp Van Ee was properly made a party, he was able to file a cross bill; so that, although the
This question of mailing defendants is entirely different from that of an intervention pro interesse suo, as authorized in Harrison v. Nixon, 9 Pet. 483, 540; Krippendorf v. Hyde, ubi supra; and in Morgan’s L. & T., etc., Co. v. Texas Cent. R. Co., ubi supra; and in the notes to Daniell, Ch. Prac. (6th Am. Ed.) 1853. There seems to be no doubt that, under the authority of these cases, Kemp yan Ee would have been entitled to an intervention by summary petition after the fund came into the registry of the court in equity, and to thus maintain his interest This, however, would have been an essentially different proceeding from that of making parties to the main controversy, and would have been of the character of the intervention of Mr. Talbot in the case at bar. This question has no relation to the so-called “class suits,” nor to the coming in of a cestui que trust or a stockholder, nor to cases like White v. Hall, 1 Russ. & M. 332, where new parties come into the accounting after a decree. In none of these are the issues presented by the bill substantially changed by the interposition of the new parties.
As Kemp Van Ee was improperly made a defendant, it follows that his cross bill was unauthorized, and should be dismissed. So far as the original bill was concerned, he was dismissed from it on, his own motion under equity rule 66; so that, when his cross bill is dismissed, the irregularity will have been wholly obviated. In King v. Asylum, 12 C. C. A. 145, 64 Fed. 331, the authorities to the effect that an irregularity, subsequently obviated, is not ground for a reversal or modification, were collected, and the rule was reaffirmed. On the principles and cases already referred to, Kemp Van Ee was entitled, at some stage of the cause below, after the fund was accumulated in the registry of the court in equity, to intervene pro interesse suo by summary petition. There is no rule touching the merits or the necessities of technical proceedings which prevents this court from regarding his cross bill as such a petition. His interest is not disputed by Pike or Gregory, at least so far as these appeals are concerned. There is no error in- reference thereto assigned by them, and none suggested by their counsel. As no error has been assigned to the effect that Butterfield’s cross bill was not properly filed, so that nobody objects to it, the issue made by him can properly be determined by this court on the present record, and the interest of Kemp Van Ee in the fund, and the extent of it, be thus determined as between all parties. This court may, therefore, or +be TirinciDles already laid down, treat the cross bill of Kemp
As, however, he volunteered himself as a party defendant, and brought a cross bill, instead of the more summary and less expensive proceeding by a petition, he ought to be required to pay costs on the cross bill in this court and in the court below. The court, perceives no ground on which any question of jurisdiction can be raised. The removal from the state court was under the act of March 3, 1875, c. 137, § 3 (18 Stat. 471), and an examination of the papers show's it was correctly made. The provision touch lug i he residence of the petitioner for removal, found in the act of 1888 (Martin v. Snyder, 148 U. S. 663, 13 Sup. Ct. 706), is not found in the act of 1875; and the act of 1875 has a range so broad that the restriction contained in section 1 does not apply to removals under section 2. Claflin v. Insurance Co., 110 U. R. 81, 3 Sup. Ct. 507. Each party was a citizen of a different state, or of a foreign state, so that in every aspect there was a controversy “between citizens of different states,” or “between citizens of a state and foreign citizens or subjects.” The jurisdiction being otherwise sufficient, any difficulty arising from residence may always be waived under anv of the statutes. Railway Co. v. McBride, 141 U. S. 127, 11 Sup. Ct. 982; Shaw v. Mining Co., 145 U. S. 444, 453, 12 Sup. Ct. 935; Southern Pac. Co. v. Denton, 146 U. S. 202, 206, 13 Sup. Ct. 44.
The objections made on behalf of Gregory, that the bill filed by him January 10, 1887, was treated by the court as a supplemental bill, and that that bill and the original bill were held to be one cause, and were retained as against Mary H. Pike, involve matters as to which he can make no complaint. lie made her a. party, and in the form and at the time which he himself elected, and he expressly described the bill filed January 10, 1887, as in the nature of a supplemental bill. It clearly was supplemental in all its aspects. Gregory cannot take any advantage of errors of his own creating, if there were any in these matters.
On the application of Gregory for leave to discontinue as against Mary II. Pike, filed September 19, 1890, leave was granted, with the following qualification: “Reserving all rights of parties other than said plaintiff, acquired by reason of said Mary H. Pike having been made a party defendant,” This leave was granted January 24, 1891. October 30, 1890, Gregory filed an order as of course, dismissing his bill against Mrs. Pike. Xo such practice as dismissal by an order as of course seems to be known in the federal courts, except under equity rule 66, although it existed in the English chancery, at the time its practice was adopted by the supreme court, in cases where the plaintiff was entitled to have his bill dismissed without prejudice. The dismissal stands on the order entered by the court on Gregory’s petition, and this order was entered, not as of course, blit in view of all the equities. It subsequently appeared to the court on the petition of Mrs. Pike, filed May 1,1893, that the dismissal was under a mistake, and was not equitable, and therefore it was revoked. This, of course,
As to the first, no formal decree had been entered dismissing as against her. The phraseology of the order of the court, “reserving all rights,” required further consideration and a formal decree, before the dismissal was effectual; and, independently of this, the case was under the control of the court until the final decree was entered, March 8, 1894.
So far as the second point is concerned, the state of the case when the dismissal was entered was as follows: There had been the cross bill filed by Butterfield, in which Mary H. Pike, as executrix, was made a defendant, it had been answered by her, replication filed, and evidence taken and filed. In Chicago & A. R. Co. v. Union Rolling-Mill Co., 109 U. S. 702, 3 Sup. Ct. 594, Bank v. Rose, 1 Rich. Eq. 294, is cited with apparent approval. In that case a cross bill had been filed, and affirmative relief asked for, and the case prepared for hearing, and it was held that the motion to dismiss could not be granted. The following proposition, however, seems decisive. Gregory’s original bill was filed before either of the Swift notes came due, and it prayed no relief against Swift, except that he, should be enjoined from paying to any other person than Gregory. The supplemental bill, however, prayed direct relief against Swift, to the effect that Swift might be ordered to recognize the right of Gregory to collect and receive the amount of the judgment which had already been entered in the suit at law on the note of $20,334.00, although no special relief was prayed against him as to the note of $15,000. At the time of the filing of the supplemental bill, Swift had already paid into the registry of the court, in the suit at law, the amount of that judgment On the law side of the court an order was entered, January 10, 1887, that the above amount be transferred to the equity side in this cause, and remain subject to the order of the court in that connection. Mo corresponding order seems to have been entered by the court in equity, but a copy of this order was ordered to be filed on the equity side on the same day. The transfer of the fund, moreover, was recognized by all parties, because it appears that March 26, 1887, Gregory moved in the equity cause that it be deposited with the Boston Safe-Deposit & Trust Company, and an order was entered directing $24,000 to be thus deposited, the order showing that all parties in interest consented.
As Butterfield was the appellant on his own bill, Gregory is not limited by any assignment of errors in relation thereto. It is too clear to require discussion that Butterfield’s bill was strictly a cross bill, and that the parties were correctly made, as they included the parties to the original bill and, none others. Keinp Van Ee should not be held to be such a party, and was correctly not joined. Gregory’s objections in relation to the service made on Butterfield’s cross bill, and as to the general right to entertain jurisdiction of such bills, are clearly not well founded. All Ms other objections are rendered immaterial by our determinations of other parts of the case.
Butterfield’s assignment of errors on Ms appeal, Nos. 9 and 10. set out that the proceeds of the notes should have been held subject to an accounting by him. This probably means “to” him. They complain that the decree does not recognize the notes as partnership property, or as property to be used for the adjustment of equities between partners. The assignments do not conform to the case made for Butterfield, either in, his cross bill or in his answer to Gregory’s bill, or Ms answer to Kemp Van He’s cross bill or his deposition. In his cross bill he says the notes were, both “in law and equity, his notes, to be used by him as the best interests of such associates might require.” Although this alleges nominally a title in himself, yet it is such a title as would be held to make Mm a trustee of them, and not an owner in Ids own interest or a holder of them in any partnership relationship. His answer to Gregory’s bill is to the same effect. He there says that the shares of stock in the Sierra Company, erf
Neither the cross bill nor the answer sets out facts constituting a partnersMp in the notes. Their sensible and fair construction, taken as a whole, is that the Sierra stock, and the notes which were the proceeds of it, were placed in Butterfield’s hands to be used by him to raise money to advance the common scheme; that, therefore, so far as they were used for that purpose, they were legitimately used; that, subject to whatever liens might thus be imposed on them, they remained always the property of Gregory and Kemp Van Ee; so that they always had the right to recover them by paying off the liens; and that, finally, as there is no lien on them except the pledge to Mr. Pike, Gregory and Kemp Van Ee have a right to redeem them, or their proceeds, from his estate, and when redeemed they become their property.
None of Butterfield’s statements are supported by anything aside from Ms own deposition, except the deposition of Guy. This, even, if accepted without reservation as to all the facts concerning which Guy had any personal knowledge, would be of no weight against the great mass of facts in the case, as it relates only to an incidental matter; but Guy was a solicitor, and had, at least, some general knowledge of the rules governing the conduct of witnesses, and his disregard of them renders his deposition worthless. Against the deposition of Butterfield are those of Gregory and Kemp Van Ee, which are supported by four important documents, each of them of principal, and not of subordinate or incidental, character, and clearly showing that Butterfield had no interest in the notes. These are Butterfield’s receipt to Gregory of March 30, 1883, for the Sierra stock, his acknowledgment touching the notes to Gregory of April 9, 1883, his order on Pike for the notes of December 13, 1883, and the unanswerable contract of April 7, 1883. The claim of Butterfield is in no way established, and we fully concur with the conclusions of the circuit court touching it. As he had no interest in the notes, he goes wholly out of the case, and all his other alleged errors become, of course, irrelevant.
It is ordered that Thomas H. Talbot, attorney for Mary H. Pike, executrix, recover the amount for services asked for in his intervening petition; that the amount so recovered rank as explained in the opinion filed this day in this case; that the cross bill of Kemp Van Ee stand as an intervening petition pro interesse suo; that. Mary H. Pike, executrix, recover her costs against Gregory in this court and in the circuit court; that Gregory recover his several costs against Butterfield and Kemp Van Ee on their cross bills, both in this court and in the circuit court; that no other costs be recovered in either court, except as expressly stated in the decree entered in the circuit court March 8, 1894; that Mary H. Pike, executrix, and Kemp Van Ee be allowed, respectively,
(March 21, 1395.)
Petitions for a rehearing have been filed by appellants Gregory and Butterfield. The court finds nothing in the petition filed by Butterfield, except what has been fully considered by it, barring the fact that some reference has been made to evidence which it is said was not rightfully read in the case. As to this, it is sufficient that no such question was raised in the court below, and therefore it cannot be raised in this court. In the petition for a rehearing filed by appellant Gregory as against Pike, it is insisted that die court has overlooked the point made by Gregory touching the alleged abatement of his original bill. This was rendered unimportant by what was held in onr opinion with reference to his bill filed January 10, 1887. The petition also insists that this court overlooked the order passed July 9, 1887, touching the $15,000 note. The petitioner is mistaken, as the opinion of the court covers both notes. It is also insisted that an award of §25,000, with interest, lias been made to Mary E. Pike, “in the absence of any claim asserted by her in any formal manner to said amount, or to any amount whatever, and in the absence of any proofs of petition or pleadings, or evidence offered by her.” In the absence of any precise definition, this may be taken very broadly or very narrowly. Then
The petition also requests the court to state on what ground it made its decree in favor of Mary H. Pike. Inasmuch as we had no occasion to pass on the merits of the claim of Mary H. Pike, if is beyond our province to attempt any explanation of the grounds on which the merits were decided in her favor by the court below. For all those matters the appellant Gregory is referred to the proceedings and decrees of the court below. Not only do our rules limit an
Attached to appellant Gregory’s petitions for a rehearing are certain affidavits. The petition as against Mary H. Pike refers to new matter, which it is said has been learned by the appellant Gregory since the argument of the appeals in this court. We have not examined the affidavits to ascertain whether or not they sustain this statement. Since the decision of the supreme court in Brown v. Aspden, 14 How. 25, holding that a rehearing is not a matter of right, petitions for rehearings in the supreme court are held to be regulated by rule 80 of that court (3 Sup. Ct. xvi.), and, consequently, in this court must be held to be regulated by our rule 29 (11 C. C. A. cxii., 47 Fed. xiii.). It is thoroughly settled that on a petition for a rehearing in the supreme court, especially in an equity cause, and by consequence in this court, no new matter can be introduced. Russell v. Southard, 12 How. 139, 159; Maxwell Land-Grant Case, 122 U. S. 365, 375, 7 Sup. Ct. 1271. The practice, of course, is less strict in the circuit court, or other courts of the first instance. Therefore, except in special cases, and then only after leave is granted by the court, no papers can be filed under rule 29, or as a petition for rehearing, except the petition itself in the form provided by that rule. The clerk was not authorized to file the affidavits without leave of court first obtained, and they cannot be considered by us. If any new matters have arisen changing the equities, probably due relief will be found, but it is not in this form; and, according to the general practice in equity, it cannot ordinarily be applied for in any form which will delay the final disposition of an appeal, or the execution of the judgment following therefrom. Southard v. Russell, 16 How. 547; Ricker v. Powell, 100 U. S. 104, 108; Gaines v. Rugg, 148 U. S. 228, 242, 13 Sup. Ct. 611; Watson v. Stevens, 3 C. C. A. 411, 53 Fed. 31; Smith v. Weeks, 3 C. C. A. 644, 53 Fed. 758; Daniell, Ch. Prac. (6th Am. Ed.) 1582.
In the petition for a rehearing filed by appellant Gregory, as against Kemp Yan Ee, the fifth assignment of error is reiterated; but in this connection the petition seems to assent to the view that its expressions, which are too broad standing alone to oblige this court to regard them, are limited by the specifications which follow. Those specifications were disposed of by us, although no express allusion was made to the demurrer or the plea referred to in them; nor was any necessary, because the subject-matters of them were made unimportant by other parts of the opinion. After the de
judge who concurred in the judgment desiring that it should be granted, or permitted to he argued, it is denied. Mandate will issue forthwith.
See Bank v. Smith, 156 U. S. 330, 15 Sup. Ct. 358, decided since this opinion was announced.