Dickey v. Turner

• Decision Date: 11 May 1931
• Docket Number: No. 5626.,5626.
• Citation: 49 F.2d 998
• Parties: DICKEY et al. v. TURNER.
• Court: U.S. Court of Appeals — Sixth Circuit

49 F.2d 998 (1931)

DICKEY et al. v. TURNER.

No. 5626.

Circuit Court of Appeals, Sixth Circuit.

May 11, 1931.

Hunter Wilson, of Memphis, Tenn., for appellants.

Canada, Williams & Russell, of Memphis, Tenn., on the brief, for appellee.

Before DENISON, HICKS, and HICKENLOOPER, Circuit Judges.

HICKS, Circuit Judge.

Appellee filed an injunction bill against appellants in the District Court and averred that on December 3, 1927, appellant Dickey had recovered a judgment against him therein for $5,000; that said judgment had been affirmed by this court 32 F.(2d) 1019; that mandate had been filed in the District Court and that execution had issued or was about to issue; that on March 28, 1929, appellant Dickey had assigned this judgment for an alleged valuable consideration to appellant Taliaferro, his kinsman, and that shortly thereafter Dickey had filed his petition in bankruptcy in the Northern District of Mississippi; that in September, 1928, appellee had recovered a judgment against appellant Dickey in a circuit court of Mississippi for $5,739.99 and interest which remained unpaid; that Dickey had listed this judgment in his bankruptcy schedules; that he had listed assets of the approximate value of $327.00 only; that the alleged assignment and the bankruptcy petition were parts of a fraudulent scheme and conspiracy between Dickey and Taliaferro to force the collection of Dickey's judgment against appellee without the credit or offset in favor of appellee for the amount of his Mississippi judgment; that this was not only a fraud upon appellee but upon the bankruptcy court as well; that the assignment was void because upon an accounting appellee owed Dickey nothing; that Dickey was in fact indebted to appellee in the amount of the excess of the Mississippi judgment over the judgment against appellee.

Appellee sought an injunction against the issuance of any execution upon the judgment against him or against the enforcement thereof if it had already issued. The bill alleged that appellants Dickey and Taliaferro were residents of Mississippi and Alabama, respectively. Appellant Wilson, a resident of the district in which the bill was filed and in which appellee resided, was made a party defendant because as attorney for Dickey in the original cause, being No. 3028 on the law docket of the court, he had a lien upon the judgment against appellee for his fee of $2,500. Appellee recognized Wilson's claim and to secure its payment tendered the money with interest into court.

Appellant Rogers, marshal of the District Court and a resident of the district, was made a defendant because the execution sought to be enjoined had come or would naturally come into his hands for enforcement.

Appellants Dickey and Taliaferro filed answers in the nature of pleas to the jurisdiction. They insisted that after the amount of Wilson's fee was deducted from the judgment against appellee the requisite jurisdictional amount was lacking, and further insisted that there was no diversity of citizenship and that being nonresidents of the state the court had no jurisdiction over them personally. Appellant Dickey later filed an amendment to his answer in which he admitted that he had listed appellee's judgment against him in the bankruptcy schedules and that he had been discharged therefrom, and filed his discharge as an exhibit to the amendment. Appellants Wilson and Rogers moved to dismiss the bill for want of jurisdiction upon the ground that there was neither diversity of citizenship nor the requisite jurisdictional amount.

Upon the pleadings thus made up the matter was referred to the standing master, who reported that the court had jurisdiction of the cause, which report, over exceptions, was confirmed and the temporary injunction was continued in force; whereupon appellants excepted, appealed and assigned errors.

The principal ground for reversal, urged in various forms, is that the District Court had no jurisdiction, i. e., no power to hear and decide the case because there was lacking not only diversity of citizenship between the parties but also the statutory amount in controversy. We cannot agree with this contention. The gravamen of the bill is an alleged conspiracy between Dickey and Taliaferro to use not only fraudulent bankruptcy proceedings and a fraudulent assignment to Taliaferro but also the processes of the court as instrumentalities wherewith to compel appellee to pay and satisfy a judgment which he did not equitably owe. It is undoubtedly true that the court had complete jurisdiction in the original case of Dickey v. Turner, No. 3028. It had control of all the proceedings and processes in that case, not only up to and including the recovery of the judgment therein, but until its complete satisfaction. Wayman v. Southard et al. 10 Wheat. 1-23, 6 L. Ed. 253; Krippendorf v. Hyde, 110 U. S. 276, 4 S. Ct. 27, 28 L. Ed. 145; Brun v. Mann, 151 F. 145, 149, 12 L. R. A. (N. S.) 154 (C. C. A. 8); Loy v. Alston, 172 F. 90, 94 (C. C. A. 8).

The power of the court was amply sufficient to prevent its process from becoming an instrument of wrongdoing. In Compton v. Jesup, 68 F. 263, 279 (C. C. A. 6), Judge Taft said: "Again, every court has inherent equitable power to prevent its own process from working injustice to any one, and may entertain a petition by the aggrieved person, either in the form of a simple motion, or by intervention pro interesse suo in the cause in which the process issued, or by ancillary or dependent bill in equity, and may afford such relief as right and justice require. The existence of such a power, independent of statutory jurisdiction, is recognized by the supreme court in Freeman v. Howe, 24 How. 450 16 L. Ed. 749; Minnesota Co. v. St. Paul Co., 2 Wall. 609-633 17 L. Ed. 886; Railroad Co. v. Chamberlain, 6 Wall. 748 18 L. Ed. 859; Krippendorf v. Hyde, 110 U. S. 276, 4 S. Ct. 27 28 L. Ed. 145; Pac. R. Co. of Missouri v. Missouri Pac. Ry. Co., 111 U. S. 505, 4 S. Ct. 583 28 L. Ed. 498; Stewart v. Dunham, 115 U. S. 61, 5 S. Ct. 1163 29 L. Ed. 329; Phelps v. Oaks, 117 U. S. 236, 6 S. Ct. 714 29 L. Ed. 888; Dewey v. Coal Co., 123 U. S. 329, 8 S. Ct. 148 31 L. Ed. 179; Gumbel v. Pitkin, 124 U. S. 131, 8 S. Ct. 379 31 L. Ed. 374; Johnson v. Christian, 125 U. S. 642-646, 8 S. Ct. 989, 1135 31 L. Ed. 820; Morgan's L. & T. R. R. & Steamship Co. v. Texas Cent. Ry. Co., 137 U. S. 171, 11 S. Ct. 61 34 L. Ed. 625."

If the averments of the bill are true and the alleged conspiracy should succeed, appellee will have been forestalled in his claim of equitable set-off against a nonresident bankrupt. See North Chicago Rolling-Mill Co. v. St. Louis Ore & Steel Co., 152 U. S. 596, 615, 14 S. Ct. 710, 38 L. Ed. 565; Loy v. Alston, supra.

We think, therefore, that the bill was purely ancillary and germane to the original suit. It set up a state of facts which if proved would establish an attempted abuse of the court's process, to defeat appellee's equitable right of set-off. This was a defense which appellee had tendered in the suit at law (his after-acquired judgment then being...