126 F. 998 | U.S. Circuit Court for the District of South Carolina | 1904
This case comes up on the bill of complaint and a demurrer thereto. The bill is filed by the Rochester German Insurance Company of Rochester, N. Y., against Nora Martin Schmidt, the Palatine Insurance Company, Limited, of London, England, a foreign corporation, the Palatine Insurance Company of Hartford, Conn., a Connecticut corporation, the Agricultural Insurance Company of Watertown, N. Y., a New York corporation, and Abraham L. Tallman, a citizen of New York. It was stated at the bar that Tallman had been settled with. The bill, after alleging the jurisdictional facts, to wit, that it involves a controversy between citizens of different states, in an amount exceeding $2,000, besides interest and costs, proceeds:
That the complainant on 14th May, 1902, issued its policy of insurance against fire to one Frederick Schmidt in an amount not exceeding $3,500. That on the same day the other insurance companies each issued a policy of insurance to the same Schmidt, each policy being in words and figures similar to that issued by complainant, except as to the name of the insurer, number, and amount, as follows:
The Palatine Insurance Company....................................$3,500
The Phoenix Insurance Company.................................... 1,000
The Agricultural Insurance Company................................ 1,100
Each of these policies insured the said Schmidt from losses by fire from 14th May, 1902, to the same day in May, 1903, in an amount not exceeding the several amounts aforesaid; each covering their pro rata the items stated in each policy, to wit:
On a brick building................................................ $1,350
On machinery and implements...................................... 5,850
On boilers and engines.............................................. 750
On stock of ammonia............................................... 75
On stock of salt.................................................... 75
In all....................................................... $8,100
That Schmidt represented himself as sole owner of the property, when in fact he was owner only of an undivided one-third interest
To this bill the defendant Nora Martin Schmidt filed her demurrer stating these grounds of demurrer:
“(1) The pending of the actions in the state court and in this court, comity of co-ordinate jurisdiction; the eases therein involving the same subject-matter and the same defenses as in this hill. (2) The hill seeks an injunction against actions at law in the state courts, contrary to section 720 of the Revised Statutes of the United States [U. S. Comp. St. 1901, p. 581]. (3) That there is a plain, adequate, and complete remedy at law.”
These all go to the jurisdiction of this court — a court of equity. The first and third grounds of demurrer raise the question, is there any equity in this bill?
This case is controlled by the case of Home Insurance Co. v. V. C. C. Co. (C. C.) 109 Fed. 681, and 113 Fed. 1, 51 C. C. A. 22. It is a mistake to suppose that that case was decided upon a valuation of the property under the section of the Code of Taws of South Carolina above quoted. It was charged that the attempt to comply with the terms of that section was fraudulent; that the insured had falsely stated the value of property concealed from view; that the fraud, if it existed, did not estop the insurer from showing the falsehood of the statement. The case in fact turned upon the pure necessity of ascertaining what was the real loss, and, after this was done, of apportioning it between the insurers. Nor is this the only equity in this bill. It prays a discovery, and propounds questions which the defendant must answer. It is true that by recent legislation a party to a cause may be summoned as a witness, and may be compelled to testify as such. But this does not take away the ancient jurisdiction of the court of equity to require a discovery. The adequate remedy at law, which is the test of the equitable jurisdiction of the courts of the United states, is that which existed when the judiciary act of 1789 was adopted, unless subsequently changed by Congress. McConihay v. Wright, 121 U. S. 201, 7 Sup. Ct. 940, 30 L. Ed. 932. The remedy at law, in order to exclude equity, under section 723, Rev. St. [U. S. Comp. St. 1901, p. 583], must be as practical and as efficient to the ends of justice and its prompt administration as the remedy in equity. Tyler v. Savage 143 U. S. 79, 12 Sup. Ct. 340, 36 L. Ed. 82. A bill for discovery purges the conscience of the defendant. If complainant call him
With regard to the second ground of demurrer — that this section 720 of the Revised Statutes [U. S. Comp. St. 1901, p. 581] forbids this injunction. This is answered by Virginia C. C. Co. v. Home Insurance Co., 113 Fed., and 51 C. C. A., above quoted:
“When separate actions at law by insured against insurers on policies to which the same defense is interposed, and under which liability, if any, is proportioned, are removed into th'e federal court, with the exceptions of one in which the amount involved is not enough to give it jurisdiction, prosecution of this action, as well as the others, may be enjoined by a bill in the federal court to have the liabilities of the insurers determined and adjusted by such court, as a court of equity, under such bill.”
Is this an ancillary bill? In Virginia C. C. Co. v. Home Insurance Co., a bill of this character precisely was held an ancillary bill, under a number of authorities cited. If so, the jurisdiction is not affected by the citizenship of the parties or by the amount involved. Compton v. Jesup, 68 Fed. 263, 15 C. C. A. 397; Stone v. Bishop, Fed Cas. No. 13,482; Carey v. Houston, etc., Ry., 161 U. S. 133, 16 Sup. Ct. 537, 40 L. Ed. 638. Were it necessary it could be said that this is an original bill, without defeating the jurisdiction. The act defining the jurisdiction of the Circuit Court of the United States gives jurisdiction when there is a controversy between citizens of different states. Act Aug. 13, 1888, c. 866, 25 Stat. 433 [U. S. Comp. St. 1901, p. 508]. .What is the controversy in this case, and who are the parties to it? Clearly, the controversy is between the defendant Schmidt and the insurance companies. She is arraigned on one side, and all of them on the other, of this controversy. They are all citizens of states other than hers. Meyer v. Construction Co., 100 U. S. 457, 25 L. Ed. 593; R. Co. v. Ketchum, 101 U. S. 289, 25 L. Ed. 932; Consolidated Water Co. v. Babcock (C. C.) 76 Fed. 248; Cilley v. Patten (C. C.) 62 Fed. 500.
The demurrer is overruled. The defendant demurring has leave to plead or answer over.
4. Diverse citizenship as ground of federal jurisdiction, see notes to Shipp v. Williams, 10 C. C. A. 249; Mason v. Dullagham, 27 C. C. A. 298.