Gardner v. Schaffer

• Decision Date: 25 June 1941
• Docket Number: No. 11957.,11957.
• Citation: 120 F.2d 840
• Parties: GARDNER et al. v. SCHAFFER et al. In re G. A. GANTZ & CO.
• Court: U.S. Court of Appeals — Eighth Circuit

120 F.2d 840 (1941)

GARDNER et al. v. SCHAFFER et al. In re G. A. GANTZ & CO.

No. 11957.

Circuit Court of Appeals, Eighth Circuit.

June 25, 1941.

Crawford Johnson, of St. Louis, Mo. (Bryan, Williams, Cave & McPheeters, of St. Louis, Mo., on the brief), for appellants.

Edward W. Tobin, of St. Louis, Mo., for appellee Henry C. Hughes, trustee in bankruptcy of G. A. Gantz & Company.

Roscoe Anderson, W. R. Gilbert, and Anderson, Gilbert, Wolfort, Allen & Bierman, all of St. Louis, Mo., for appellee A. H. Schaffer.

Before GARDNER, SANBORN, and THOMAS, Circuit Judges.

PER CURIAM.

The appellants brought this action to compel the appellees, who are alleged to be rival claimants to money or securities in appellants' possession, to interplead. Each of the appellees moved to dismiss the appellants' complaint for want of jurisdiction and for failure to state a claim upon which relief could be granted. The motions were granted, and from the ensuing judgment of dismissal, this appeal was taken. The parties will be referred to as plaintiffs and defendants.

The complaint, after asserting that the action "arises under Section 60 of the Bankruptcy Act, as amended," Title 11, § 96, U.S.C.A., alleges that plaintiffs are co-partners doing a brokerage business in St. Louis, Missouri; that on June 27, 1939, G. A. Gantz & Company, a Missouri corporation, which was engaged in the brokerage business in stocks and bonds in St. Louis, had a margin account with plaintiffs in which there was a credit balance of $326.36 together with certain securities described in the complaint; that at the request of Gantz & Company, the plaintiffs on June 27, 1939, issued and delivered their check for $3,520.24 to that company, payable to the order of "G. A. Gantz & Company, for the account of A. H. Schaffer", and charged it against the account of the company, "so that after the issuance of said check said G. A. Gantz & Company owed said partnership the sum of $3,193.89, secured by the above described securities"; that (on information and belief) Gantz & Company on June 27, 1939, endorsed and delivered the plaintiffs' check to Schaffer, who was a customer of the company; that on June 28, 1939, plaintiffs, upon being advised that a receiver for Gantz & Company had been appointed by a state court of Missouri, stopped payment of the check; that on July 24, 1939, Gantz & Company was adjudicated bankrupt, and on August 24, 1939, Henry C. Hughes was appointed its trustee in bankruptcy; that the trustee claims that on June 27, 1939, Schaffer was a creditor of the bankrupt, that payment of the check to him would constitute an unlawful preference, and that the trustee is entitled to have the plaintiffs credit the amount of the unpaid check to the account of the bankrupt and to have the plaintiffs turn over to the trustee, free of liens, the securities held by the plaintiffs for the account of the bankrupt; that Schaffer denies that he was a creditor of the bankrupt with respect to the amount represented by the check, and denies that the payment to him of the check would constitute an unlawful preference; that he claims to be entitled to payment of the check, and demands that plaintiffs pay the amount of the check to him.

The plaintiffs ask that the court require the defendants to interplead and settle between themselves their rights, if any, to the money due under the check; that if Schaffer be determined to be entitled to the proceeds of the check, plaintiffs be decreed to have a lien in the amount of $3,193.89 upon the securities described in the complaint; that if Schaffer be determined not to be entitled to the proceeds of the check, he be required to surrender the check to the plaintiffs for cancellation; that during the pendency of the action he be enjoined from endorsing or transferring the check or from enforcing its collection; that the trustee in bankruptcy of Gantz & Company also be enjoined from instituting proceedings to recover the securities held by plaintiffs as security for their outstanding check; and that plaintiffs be discharged from all liability except to the person the court shall adjudge to be entitled to the proceeds of the check or to the delivery of the securities.

It is obvious that the court below was without jurisdiction under the Federal Interpleader Act, 28 U.S.C.A. § 41(26), since there is no diversity of citizenship. The plaintiffs,...