Francis I. du Pont & Co. v. Sheen
| Citation | 324 F.2d 3 |
| Decision Date | 23 October 1963 |
| Docket Number | No. 14359.,14359. |
| Parties | FRANCIS I. du PONT & CO., a partnership composed of Edmond du Pont et al., Plaintiff in Interpleader and Appellant, v. Al B. SHEEN and John F. Connelly. |
| Court | United States Courts of Appeals. United States Court of Appeals (3rd Circuit) |
Charles M. Solomon, Philadelphia, Pa. (Fox, Rothschild, O'Brien & Frankel, Philadelphia, Pa., on the brief), for appellant.
John A. Eichman, III, Philadelphia, Pa. (Clark, Spahr, Eichman & Yardley, Philadelphia, Pa., on the brief), for appellee Al B. Sheen.
Before McLAUGHLIN, STALEY and HASTIE, Circuit Judges.
This interpleader suit was instituted by appellant Francis I. du Pont & Co., a stock brokerage firm, to determine who was entitled to a balance of $101,024.45 standing to the credit of the appellee, Al B. Sheen, in a margin account after the sale of certain stock. Upon filing the complaint, which alleged that both Sheen and John F. Connelly were claiming the fund, du Pont deposited the sum in question in the registry of the district court.
Connelly filed an answer stating his claim to the fund. Sheen moved to dismiss the complaint, alleging that Connelly's claim was groundless on its face and that the interpleader suit was not based upon any bona fide controversy concerning entitlement to the fund. Before this motion could be argued, Sheen, Connelly and du Pont all executed and filed with the court a stipulation for a consent adjudication of the controversy. The stipulation provided that, after distribution of approximately $30,000 to a bank in payment of a note related to the brokerage account, the sum of $50,000 should be paid to Sheen and his Chicago attorney and the balance of the fund, approximately $20,000, to the nominee of Connelly. It was also provided that this settlement should unconditionally and irrevocably bind all parties, that an order should be entered pursuant to the stipulation and that "this case be dismissed with prejudice". Accordingly, on December 19, 1961 the court entered a brief final order authorizing the distribution of the fund precisely as stipulated and directing "that this case be dismissed with prejudice".
In August 1962 Sheen sued du Pont in the Circuit Court of Cook County, Illinois, complaining that the appellant had filed the interpleader suit knowing that Connelly had no "recognizable adverse claim" to the balance in the Sheen account and intending to coerce Sheen into recognizing a fictitious claim by Connelly. Asserting that this course of conduct was tortious, Sheen demanded of du Pont as damages the amount Connelly had received pursuant to the agreed disposition of the interpleaded claims plus Sheen's attorney's fees and costs in the interpleader suit.
Du Pont then filed a motion in the interpleader suit asking that "a permanent injunction be issued under 28 U.S.C. § 2361 to enforce the order of dismissal". The facts concerning the history of the litigation in the district court and in Illinois were stipulated. After hearing, the court below concluded that the final order already entered pursuant to the stipulation of the parties had exhausted its power in the premises and denied the motion. This appeal followed.
The post-judgment problem which confronted the court below was probably novel, since it is doubtful whether there has ever before been a case in which a claimant in interpleader, dissatisfied with a consent judgment on the merits of that litigation, has later in another court attacked the very filing of the interpleader as a tort for which the original plaintiff should pay him damages. Such an ironical aftermath obviously negates the primary purpose of interpleader, a procedure which Congress has sanctioned, 28 U.S.C. §§ 1335, 2361, to relieve an obligor from the vexation of multiple claims in connection with a debt which he admittedly owes to someone. Moreover, section 2361 of Title 28 expressly provides that a district court may temporarily or permanently enjoin interpleader claimants from prosecuting proceedings in state courts and, more generally, may "make all appropriate orders to enforce its judgment". The exercise of this power by supplementary injunction after final judgment is clearly proper. Dugas v. American Surety Co., 1937, 300 U.S. 414, 57 S.Ct. 515, 81 L. Ed. 720; cf. Thomason v. Cooper, 8th Cir. 1958, 254 F.2d 808; Jacksonville Blow Pipe Co. v. R. F. C., 5th Cir. 1957, 244 F.2d 394. In these circumstances, the only plausible argument against the supplementary relief requested by du Pont is that an order enjoining the Illinois proceeding would modify the consent judgment in contravention of the stipulation upon which it was based.
In evaluating this contention we consider first whether and to what extent the claim which Sheen is asserting in the new suit in Illinois was involved in the earlier interpleader suit. The record shows that the interpleader complaint was filed on August 29, 1961 and that on the same day du Pont's attorney notified the claimants, Sheen and Connelly, of that filing. Thus advised, Sheen on September 8 filed an action, not involved in the present controversy, in the United States District Court for the Southern District of Illinois, claiming the fund which was the subject of the pending interpleader. On September 21, du Pont countered in the interpleader suit by moving that Sheen and all other claimants be ordered to litigate their claims in this proceeding and restrained pendente lite from suing elsewhere. The court immediately ordered that this motion be argued on September 26 and directed that all claimants be notified. The same day, counsel for du Pont notified counsel for Sheen by telephone of the court's action and promptly mailed the relevant papers to him. On September 25, Sheen's counsel notified du Pont's counsel that Sheen would not oppose the motion but would answer the interpleader later. These facts are not disputed.
On September 26, the court granted du Pont's motion and entered an order reciting that the sum in dispute had been paid into the registry of the court, directing Sheen and Connelly to litigate their claims in this proceeding and enjoining any conflicting proceeding elsewhere pending final disposition of the interpleader.
We have fully outlined the course of the first stage of this interpleader because of its legal significance. When a plaintiff in interpleader has...
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...treaties with plaintiffs. Provident Mut. Life Ins. Co. v. Ehrlich, 508 F.2d 129, 135-36 (3d Cir. 1975); Francis I. duPont & Co. v. Sheen, 324 F.2d 3, 4 (3d Cir. 1963). Attorneys' All plaintiffs have moved to recover the attorneys' fees and litigation costs they have incurred in instituting ......
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