General Electric Credit Corporation v. Grubbs

• Decision Date: 22 July 1971
• Docket Number: No. 29961.,29961.
• Citation: 447 F.2d 286
• Court: U.S. Court of Appeals — Fifth Circuit
• Parties: GENERAL ELECTRIC CREDIT CORPORATION, Plaintiff-Appellant, v. T. R. GRUBBS, d/b/a T. R. Grubbs Tire & Appliance, Defendant-Appellee.

447 F.2d 286 (1971)

GENERAL ELECTRIC CREDIT CORPORATION, Plaintiff-Appellant, v. T. R. GRUBBS, d/b/a T. R. Grubbs Tire & Appliance, Defendant-Appellee.

No. 29961.

United States Court of Appeals, Fifth Circuit.

June 2, 1971.

Rehearing Denied July 22, 1971.

Hubert D. Johnson, Dallas, Tex., for plaintiff-appellant.

J. R. Cornelius, Bill J. Cornelius, Jefferson, Tex., for defendant-appellee.

B. A. Britt, Jr., Texarkana, Tex., for Goodyear Tire & Rubber Co.

Roby Hadden, U. S. Atty., Tyler, Tex., for the United States.

Before GOLDBERG and DYER^*, Circuit Judges, and GROOMS, District Judge.

GOLDBERG, Circuit Judge.

A funny thing happened to this case on its way to trial. Through a series of errors all parties ended up in the wrong forum. Finding a complete absence of federal jurisdiction, we remand the case to the district court for remand to the state court from whence it was removed.

Plaintiff General Electric Credit Corporation instituted this suit in a Texas state court, seeking judgment on a promissory note against defendant T. R. Grubbs. Grubbs by various pleadings asserted a cross-action against General Electric Credit Corporation, and impleaded General Electric Company as an additional defendant. Subsequently, Grubbs filed another petition naming the United States as a party defendant. In this petition Grubbs referred to nine judgments obtained against him, including one in favor of the United States. Alleging that he was in jeopardy because of adverse claims being pressed by the lien claimants and the United States, Grubbs prayed that the priority of the lien claimed by the United States be determined under the provisions of Rule 22, Fed.R.Civ.P., in order to avoid double or multiple liability. The other judgment holders, however, were not made parties to the suit.

The United States, upon being named as a party defendant under Rule 22, filed a petition for removal to the United States District Court for the Eastern District of Texas. Removal was granted, apparently under the provisions of 28 U.S.C.A. § 1444, which provides:

"§ 1444. Foreclosure action against United States

Any action brought under section 2410 of this title against the United States in any State court may be removed by the United States to the district court of the United States for the district and division in which the action is pending."

§ 2410(a) provides:

"§ 2410. Actions affecting property on which United States has lien

(a) Under the conditions prescribed in this section and section 1444 of this title for the protection of the United States, the United States may be named a party in any civil action or suit in any district court, or in any State court having jurisdiction of the subject matter —

(1) to quiet title to,

(2) to foreclose a mortgage or other lien upon,

(3) to partition,

(4) to condemn, or

(5) of interpleader or in the nature of interpleader with respect to real or personal property on which the United States has or claims a mortgage or other lien."

In sum § 2410 waives sovereign immunity and allows the United States to be named a defendant in an interpleader suit with respect to real or personal property on which the United States has or claims a mortgage or other lien, and § 1444 allows the United States to remove the suit to federal court when it is named a defendant in such a suit.

At the conclusion of trial before the district court judgment was rendered against General Electric Credit Corporation on its suit against Grubbs on the promissory note, and in favor of Grubbs on his cross claim against General Electric Credit Corporation. General Electric Company and the United States were dismissed from the suit. From this determination General Electric Credit Corporation appeals.

We need not detain ourselves with the merits of this controversy since we must at the outset, and on our own motion, recognize the total absence of federal jurisdiction. We note that there never has been any allegation of diversity of citizenship between the parties to this suit. Nor is there any basis for federal question jurisdiction. The sole ground alleged for federal jurisdiction in the instant case rests on the government's right to remove under § 1444, since it was named a defendant in Grubbs' interpleader suit. We think it clear beyond peradventure, however, that removal jurisdiction based on § 1444 is justified only if a viable interpleader action is filed naming the United States as a party defendant. In the instant case we think that Grubbs' attempt to join the United States as a defendant under Rule 22 was obviously frivolous.

The interpleader rule, Rule 22, Fed.R. Civ.P., provides:

"Interpleader

(1) Persons having claims against the plaintiff may be joined as defendants and required to interplead when their claims are such that the plaintiff is or may be exposed to double or multiple liability. It is not ground for objection to the joinder that the claims of the several claimants or the titles on which their claims depend do not have a common origin or are not identical but are adverse to and independent of one another, or that the plaintiff avers that he is not liable in whole or in part to any or all of the claimants. A defendant exposed to similar liability may obtain such interpleader by way of cross-claim or counterclaim. The provisions of this rule supplement and do not in any way limit the joinder of parties permitted in Rule 20."

The requirement that the plaintiff "is or may be exposed to double or multiple liability" has always been interpreted to demand a showing that the plaintiff has been or may be subjected to adverse claims to a particular fund. See 3A J. Moore, Federal Practice ¶ 22.02. In the more common case the requisite adversity is provided when the stakeholder is faced with two or more claims which are mutually inconsistent; a decision in favor of one claimant necessarily requires a determination that the other claimants are not entitled to any part of the fund. As the Supreme Court explained in Texas v. Florida, 1939, 306 U.S. 398, 406, 412, 59 S.Ct. 563, 568, 570, 83 L.Ed. 817, 825, 828:

"The peculiarity of the strict bill of interpleader was that the plaintiff asserted no interest in the debt or fund, the amount of which he placed at the disposal of the court and asked that the rival claimants be required to settle in the equity suit the ownership of the claim among themselves. But as the sole ground for equitable relief is the danger of injury because of the risk of multiple suits when the liability is single, Farley v. Blood, 30 N.H. 354, 361; Bedell v. Hoffman, 2 Paige, N. Y., 199, 200; Mohawk & Hudson River R. Co. v. Clute, 4 Paige, N.Y., 384, 392; Atkinson v. Manks, 1 Cow.N.Y., 691, 703; Story, Equity Pleadings (10th ed.) §§ 291, 292, and as plaintiffs who are not mere stakeholders may be exposed to that risk, equity extended its jurisdiction to such cases by the bill in the nature of interpleader. The essential of the bill in the nature of interpleader is that it calls upon the court to exercise its jurisdiction to guard against the risks of loss from the prosecution in independent suits of rival claims where the plaintiff himself claims an interest in the property or fund which is subjected to the risk. The object and ground of the jurisdiction are to guard against the consequent depletion of the fund at the expense of the plaintiff\'s interest in it and to protect him and the other parties to the suit from the jeopardy resulting from the prosecution of numerous demands, to only one of which the fund is subject. While in point of law or fact only one party is entitled to succeed, there is danger that recovery may be allowed in more than one suit. Equity avoids the danger by requiring the rival claimants to litigate before it the decisive issue, and will not withhold its aid where the plaintiff\'s interest is either not denied or he does not assert any claim adverse to that of the other parties, other than the single claim, determination of which is decisive of the rights of all. Pacific Nat. Bank v. Mixter, 124 U.S. 721, 8 S.Ct. 718, 31 L.Ed. 567; Provident Sav. Life Assur. Soc. v. Loeb, C. C., 115 F. 357; Sherman Nat. Bank v. Shubert Theatrical Co., D.C., 238 F. 225, affirmed, 2 Cir., 247 F. 256; Illingworth v. Rowe, 52 N.J.Eq. 360, 28

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