Colston v. Southern Home Bldg. & Loan Ass'n, 1,089.
| Decision Date | 15 December 1899 |
| Docket Number | 1,089. |
| Citation | 99 F. 305 |
| Parties | COLSTON et al. v. SOUTHERN HOME BUILDING & LOAN ASS'N. |
| Court | U.S. District Court — Northern District of Georgia |
Quaere whether, when the question is raised at the threshold of a suit, by demurrer, the amount in dispute, for the purpose of determining the jurisdiction of a federal court to entertain a bill by stockholders for the appointment of a receiver for a corporation on the ground of its insolvency, is the value of the property to be administered by the court if the prayer of the bill is granted, or the amount of the complainant's interest therein.
A federal court will not entertain a suit by stockholders for the appointment of a receiver for a corporation, and the liquidation of its affairs as an insolvent, while a prior suit brought in a state court for the same purpose is still pending and undetermined, although the state court on a preliminary application has refused to appoint a receiver. In such case the second suit will either be abated or stayed until the final determination of the first. [1]
John L. Hopkins & Sons, for plaintiffs.
Hoke Smith, H. C. Peeples, and W. D. Ellis, for defendant.
In this case a bill was filed by two members of a building and loan association. The total amount which they have paid into the association, and consequently their claim against it, aggregates something like $1,300--considerable less, at least, than $2,000. The purpose of the bill is to have the property and assets of every kind of the association placed in the hands of a receiver, to be administered for the benefit of all concerned. It is alleged that the association is insolvent, and that its affairs are being badly mismanaged. The amount of the assets of the association to be administered, if the case proceeds, is much greater than the jurisdiction to entertain it, by reason of the amount involved. The question now presented is this: Whether the amount of the complainants' claims, or the value of the assets to be administered should the case proceed, determines the court's jurisdiction.
The language of the statute (Act Cong. Aug. 13, 1888 (1 Supp.Rev.St., 2d Ed., p. 611)), omitting language not material here, is as follows:
'The circuit courts of the United States shall have original cognizance, concurrent with the courts of the several states, of all suits of a civil nature, at common law or in equity, * * * in which there shall be a controversy between citizens of different states * * * in which the matter in dispute exceeds exclusive of interest and costs, the sum or value aforesaid (two thousand dollars).' It will be perceived that the statute contemplated that in some instances 'the sum' will be the matter in dispute, and in others 'the value.' In the one case the amount in controversy will control, and in the other the value of the property involved.
In this case there is no prayer whatever for a money judgment or decree against the association. The prayer is that its assets be placed in the hands of the receiver, and that the debts be collected, and, when all of the assets shall be reduced to cash, that they be divided pro rata among those entitled thereto. It is urged that this is one of the cases in which the jurisdiction of the court must be determined by the value of the property to be administered, as the purpose of the assets. Undoubtedly, the matter in dispute being the solvency or insolvency of the association, and the proper or improper management of its affairs, the action of the court in determining these matters must affect one way or the other the entire assets of the association, as the court either takes control of the same, and causes it to be administered as prayed, or declines to do so. It is urged that the complainants come into court, not as outsiders seeking relief against the association, but rather from the inside, as members of the association,-- as a part of the association itself,-- and ask, by reason of its insolvency, mismanagement, etc., that it be would up, because its condition is such that it cannot accomplish the purpose for which it was organized. In the case of Towle v. Society (C.C.) 60 F. 131, which was a building and loan association case, Judge Grosscup held that 'the entire assets of the society are brought into court to be administered, and are therefore the matter in dispute or controversy,' the question or jurisdictional amount having been raised. In the case of Putnam v. Carpet Co., 79 F. 454, Judge Clark, of the circuit court for the Eastern district of Tennessee, held that where a bill was brought to administer a trust fund, in behalf of all the creditors, the fund to be administered determines the question of jurisdiction. In the recent case of Cowell v. Supply Co., 96 F. 769, Judge Woolson, of the United States circuit court for the Southern district of Iowa, decided, as summed up in the third headnote, as follows:
'In a suit to set aside a conveyance of property, and mortgages given thereon, the value of the property and rights which will be affected if the relief prayed for is granted, and not the value of complainant's interest in the property, constitutes the amount in dispute, for the purpose of determining the jurisdiction of a federal court.'
It is contended by defendant's counsel in this case that the case of Towle v. Society, supra, and the case of Putnam v. Carpet Co., supra, should not be regarded as authority here, because in the first case the court, at the time in question of jurisdiction was raised, had taken possession of the property, and had it in its custody, and that is should not control in a case like this, where the question is presented at the threshold, and before the court enters into possession of the res; and in the latter case, because the question here made was really not involved, as one of the complainant's claims exceeded the jurisdictional limit, and it was really unnecessary to determine it. Counsel for defendant also claim that the cases here cited do not state the correct rule on the subject. They claim that, as to the complainants' interest in the controversy, although their several claims may perhaps be joined for the purpose of determining the jurisdictional amount, yet their claims together must exceed $2,000, etc., to give the court jurisdiction. They say that it is not the value of the property sought to be subjected, but the complainants' interest in the controversy; that the test of the amount in controversy is that which is involved in the controversy between the particular complainants and the defendant. They rely especially upon the case of Gibson v. Shufeldt, 122 U.S. 27, 7 Sup.Ct. 1066, 30 L.Ed. 1083, in which many former decisions of the supreme court are cited and considered, and also on the cases of Brown v. Trousdale, 138 U.S. 389, 11 Sup.Ct. 308, 35 L.Ed. 987; Walter v. Railroad Co., 147 U.S. 370, 13 Sup.Ct. 348, 37 L.Ed. 206; Colvin v. City of Jacksonville, 158 U.S. 456, 15 Sup.Ct. 866, 39 L.Ed. 1053; and particularly, on the following decisions of the circuit court; Massa v. Cutting, 30 F. 1; Putney v. Whitmire, 66 F. 385; Smithson v. Hubbell, 81 F. 593. These decisions do not make the jurisdiction, as to the jurisdictional amount involved, doubtful,-- perhaps too doubtful to justify the court in proceeding in the case under the recognized rule that the jurisdiction should be clear; but it is unnecessary at this stage of the case, in view of what will be hereafter said, to determine that question, and the same may be left for future consideration, should the necessity for a decision arise.
Pending the determination of the matter above discussed, and after it had been submitted to the court, a question arising on a plea in abatement was argued, and also submitted. The plea in abatement sets up the pendency of a suit in the superior court of the state, over the same subject-matter, seeking the same result, and by what the defendant claims are substantially, for present purposes, the same parties against the same defendant. By consent of counsel, the original record in the state court is used, and is considered as accompanying the plea in abatement. The object of the bill in the state court was to have all the assets of the Southern Home Building & Loan Association placed in the hands of a receiver. The allegations in that bill were substantially the same as those of the bill filed in this court. It charged, in effect, the same mismanagement, the same danger to members, supported by the same facts generally that are set out here. The complainants were different persons from those who filed the bill in this court, but the bill was sworn to by the same person, as agent for the complainants, who made the affidavit to the bill filed in this court. The bill was filed in the state court one day before the bill was filed in this court. On the day the bill was filed, the judge of the superior court passed the following order:
...
To continue reading
Request your trial
-
Massachusetts Protective Ass'n v. Stephenson
...a right. In such a case it is the value of such property or right that determines jurisdiction. In the case of Colston v. Southern Home Bldg. & Loan Ass'n (C. C.) 99 F. 305, 306, it was said: "It will be perceived that the statute contemplates that in some instances `the sum' will be the ma......
-
Stirling v. Seattle, R. & S. Ry. Co.
... ... Southern Railway Company, a Washington corporation, ... 119, ... 43 L.Ed. 399). ' Farmers' Loan, etc., Co. v. Lake ... St. R. Co., 177 U.S. 51, ... (C.C.) 67 F. 802; Colston v. Southern Home Bldg. & ... L. Ass'n (C.C.) 99 ... ...