Armstrong Cork Co. v. Merchants' Refrigerating Co.

• Decision Date: 28 December 1910
• Docket Number: 3,385.
• Citation: 184 F. 199
• Parties: ARMSTRONG CORK CO. v. MERCHANTS' REFRIGERATING CO. et al.
• Court: U.S. Court of Appeals — Eighth Circuit

184 F. 199

ARMSTRONG CORK CO. v. MERCHANTS' REFRIGERATING CO. et al.

No. 3,385.

United States Court of Appeals, Eighth Circuit.

December 28, 1910

[Copyrighted Material Omitted]

Syllabus by the Court

The facts stated, and the relief sought in a first pleading, and not its form or name, determine whether it invokes the jurisdiction and commences a suit at law or in equity.

However notice of lis pendens is not given by the filing to a bona fide purchaser until the subpoenas are served on the material defendants.

Held Applying the doctrine of laches in analogy to this statute, as interpreted by the courts of the state, a complainant in a federal court who pursues a similar course is not guilty of fatal laches.

State laws as rules of decision in federal courts, see notes to Wilson v. Perrin, 11 C.C.A. 71; Hill v. Hite, 29 C.C.A. 553.)

Held: The filing of the original pleading was the commencement of a suit in equity, the amended bill related back to that time, and the suit was not barred by laches, although the subpoenas were not issued until three days after the time to commence the suit prescribed by the statute had expired.

Held: The reversion of the lessor was not liable to a mechanic's lien for the value or the price of the insulation.

Denton Dunn (William S. Gilbert and Henry D. Ashley, on the brief), for appellant.

James S. Botsford (Buckner F. Deatherage, Goodwin Creason, and F. V. Kander, on the brief), for appellees.

Before SANBORN and VAN DEVANTER, Circuit Judges, and REED, District judge.

SANBORN Circuit Judge.

This is a suit to foreclose a mechanic's lien. The materials and labor were furnished to a lessee, the defendant, the Merchants' Refrigerating Company, a corporation, to enable it to insulate a building which had been erected by the lessor, the defendant, Morris Lyon, as trustee, on land owned by him. The bill of the complainant was repeatedly amended, and the suit was finally submitted to the court below on the last amended bill and numerous demurrers and pleas, which presented two questions: Was the suit of the complainant barred by its laches? and, if not, did the amended bill state facts sufficient to show that the complainant was entitled to a lien upon the interest of the lessor in the land and building? The court below answered the first question in the affirmative, dismissed the bill in pursuance to that answer, and did not consider or decide the second question. The facts which conditioned the determination of the first question were these:

The statute of Missouri, which creates the mechanic's lien, limits the time within which a suit may be brought to enforce it to 90 days after the date of the filing of the statement of the lien with the clerk of the court. Rev. St. Mo. 1899, Sec. 4218 (Ann. St. 1906, p. 2310). Under the established practice in the courts of the state of Missouri such suits may be treated and tried as actions at law, but in the courts of the United States they are suits in equity. Sheffield Furnace Co. v. Witherow, 149 U.S. 574, 579, 13 Sup.Ct. 936, 37 L.Ed. 853; Hatcher v. Hendrie & Bolthoff Mfg. & Supply Co., 133 F. 267, 271, 68 C.C.A. 19, 23. One of the defendants in the suit in hand was Willard P. Hall, who, as receiver and trustee in bankruptcy of the Refrigerating Company, had succeeded to the interest of that lessee in the land and building. Complainant's counsel had prepared their petition to foreclose the lien for filing in the state court on the assurance of Mr. Hall that he would be officially discharged before the ninetieth day after the filing of the statement of lien. The ninetieth day was February 7, 1908, and on February 6, 1908, Hall told the counsel for the complainant that an obstacle had appeared which would prevent his discharge until after the ninetieth day. Then it became necessary to make Mr. Hall a defendant in the suit, and counsel found that there was no federal district judge in the Western district of Missouri from whom they could obtain leave to sue the receiver and trustee, and they went to Red Oak, Iowa, and obtained from Judge McPherson, who had been assigned to the Missouri district, an order permitting them to sue the officer of the federal court, but the judge requested that the suit be brought in the federal court if counsel found that that court had jurisdiction of the controversies. Thereupon the counsel for the complainant inserted the jurisdictional averments in the petition which they had drawn and filed it on the ninetieth day, but did not have time to redraft it in the usual form of a bill in equity. On the same day a summons at law was issued upon the petition and delivered to the marshal who subsequently returned it without service on April 27, 1908, by direction of complainant's counsel who learned on Saturday, February 8, 1908, that subpoenas in chancery instead of a summons at law should have been issued, and on Monday, February 10, 1908, they caused such subpoenas to be issued and to be served upon the defendants on that day and the succeeding one. On February 13, 1908, and before any copy of their petition had been taken out of the clerk's office they filed an amended petition in the customary form of a bill in equity, except that it contained no prayer for process, nor did the original petition.

Counsel for the defendants argue (1) that the original petition was filed in an action at law on the ninetieth day, and while a summons was issued none was served so that the action at law was never commenced; (2) that neither the original petition, nor the amended petition which was filed on February 13, 1908, were effective as bills in equity because neither contained any prayer for process; and (3) that the amended petition could not constitute an amendment of the original petition because it was a bill in a suit in equity, while the original petition was a complaint in an action at law; and (4) that the amended petition and the subpoenas were too late to commence a suit in equity to foreclose the mechanic's lien, because the former was not filed and the latter were not issued until several days after the expiration of the ninety days from the date of the filing of the statement of the lien, and it was indispensable to the maintenance of the suit that the former should have been filed and the latter should have been issued within the ninety days.

For the purpose of the consideration and decision of this case it is conceded that no action at law was commenced by the filing of the original petition and the issue of the summons which was returned without service by order of complainant's counsel. But that petition stated facts which constituted a good cause of action in equity, a cause of action which entitled the complainant to a decree for the foreclosure of its mechanic's lien. That petition set forth the interests of the defendants in the property in controversy, a contract between the Refrigerating Company and the complainant for the materials and labor requisite to insulate the building in order to make it a cold storage warehouse the furnishing of the materials and the performance of the labor by the complainant pursuant to the contract, the Refrigerating Company's indebtedness to the complainant for these materials and this labor in the sum of $12,761.16, and the filing of the statement and claim of lien as prescribed by the statute, and it also contained a prayer that the complainant have judgment against the Refrigerating Company for the amount of the latter's indebtedness, and that 'the same may be declared a lien against the property above described prior and superior to the lien or claim of each and all the defendants. ' The United States Circuit Court for the Western district of Missouri was one court with a dual jurisdiction-- a jurisdiction of actions at law and a jurisdiction of suits in equity-- vested in and exercised by the same judges and the same clerk and marshal. The difference, however, between causes of action at law and causes of action in equity is in matter of substance, and not of form. It inheres in the natures of the causes themselves, and it cannot be extracted by legislation or declaration. This ineradicable difference is sedulously preserved in the forms of the suits which enforce these causes in the national courts. In those courts a legal cause of action may not be sustained in equity because the parties are entitled to a trial of the issues in such a cause by a jury under article 7 of the amendments to the Constitution of the United States, and it is only when there is no adequate remedy at law that a suit in equity can be maintained. On the other hand, equitable causes and defenses are not available in actions at law because such causes invoke the judgment and appeal to the conscience of the chancellor, and the free exercise of that judgment and conscience is forbidden in actions at law by the rule which entitles either party to a trial of all the issues of fact by a jury. Bagnell v. Broderick, 13 Pet. 436, 10 L.Ed. 235; Foster v. Mora, 98 U.S. 425, 428, 25 L.Ed. 191; Scott v. Armstrong, 146 U.S. 499, 512, 13 Sup.Ct. 148, 36 L.Ed. 1059; Lindsay v. Bank, 156 U.S. 485, 493, 15 Sup.Ct. 472, 39 L.Ed. 505; Schoolfield v. Rhodes, 82 F. 153, 155, 27 C.C.A. 95, 97; Davis v. Davis, 72 F. 81, 83, 18 C.C.A. 438, 440; Highland Boy Gold Min. Co. v. Strickley, 116 F. 852, 854, 54 C.C.A. 186, 188; Schurmeier v. Connecticut Mutual Life Ins. Co., 137 F. 42, 46, 69 C.C.A. 22, 26. As the essential character of a cause of action and of the remedy it seeks determines whether it is a cause at law or in equity, neither the parties to it nor the court can by declaration or procedure make a cause of action at law a cause in equity, or vice versa, and when a pleading by the complainant, whether...