Hayward & Clark v. McDonald

• Decision Date: 11 January 1912
• Docket Number: 2,172.
• Citation: 192 F. 890
• Parties: HAYWARD & CLARK et al. v. McDONALD et al.
• Court: U.S. Court of Appeals — Fifth Circuit

192 F. 890

HAYWARD & CLARK et al. v. McDONALD et al.

No. 2,172.

United States Court of Appeals, Fifth Circuit.

January 11, 1912

[Copyrighted Material Omitted]

The appellants, a commercial partnership, each member a citizen of Louisiana, brought their bill against the appellees, one of whom is a citizen of Georgia and the other a citizen of Texas. The bill contained the usual formal allegations found in bills of interpleader. The other material averments of the bill are indicated in the opinion. There was a prayer for process; a prayer to be allowed to bring into court $1,175.90, with interest, which the complainants admitted to be due on account of their dealings as the agent of F. M McDonald, deceased; a prayer for an injunction against J. C McDonald (The administrator of the estate of F. M. McDonald) against his prosecuting a suit against complainants for $5,727.49; a prayer for an injunction against John Hartman against his prosecuting a suit against complainants for $2,500; and a prayer for 'such other and further orders and decrees as the nature of the case may require.'

A demurrer to the bill presented but one ground, to wit:

'That the said plaintiff has not in and by his said bill shown any right and title whatever to compel this defendant and John Hartman, the other defendant to the said suit, to interplead.'

The Circuit Court sustained the demurrer and dismissed the bill, and the complainants appealed.

Henry P. Dart, Jr. (Dart, Kernan & Dart, of counsel, on the brief), for appellants.

Solomon Wolff and Ernest T. Florance (E. J. Meral, on the brief), for appellees.

Before McCORMICK and SHELBY, Circuit Judges, and MAXEY, District judge.

SHELBY Circuit Judge, after stating the facts as above, :

The appellees contend that the Circuit Court was without jurisdiction because the sum sought to be deposited is less than $2,000. This contention is based on only one feature of the case. The bill seeks to enjoin the two defendants, who are each suing the complainants for a sum exceeding $2,000. One of the purposes of the bill is to obtain protection from these suits. The value of the right sought to be protected, and not alone the amount which the complainant tenders into court, constitutes the value in controversy for jurisdictional purposes. Louisville & Nashville R.R. Co. v. Smith, 128 F. 1, 63 C.C.A. 1, and cases there cited.

The true limit of the jurisdiction in equity of bills of interpleader is not settled by the authorities in a very precise manner, and it is, of course, not necessary in the decision of any one case to consider all of the refinements that relate to the subject. If a plaintiff has money in his hands which is claimed by two or more persons, and the plaintiff has no claim to it himself, and has incurred no independent liability to either of the claimants, so that he is indifferent between them, a mere stakeholder, and is sued for, or is threatened with suit for, the fund by the rival claimants, his remedy is to file a bill of interpleader. In such case he would obtain a decree permitting him to deposit the money in court and be discharged, with his costs, and the defendants would be required to interplead and contest their rights to the fund. So, in brief, it may be said that a bill of interpleader, strictly so called, is one in which the complainant claims no relief against either of the defendants, and only asks that he may be at liberty to pay the money or deliver the property to the court, to be awarded to the one to whom it of right belongs, and that he may thereafter be protected against the claims of both. Bedell v. Hoffman, 2 Paige (N.Y.) 199. It is sometimes held that, as a general rule, to sustain such a bill, it must appear that the complainant has incurred no independent liability to either claimant. If the relation of principal and agent exists between the plaintiff and a defendant, that, it is said, creates an independent liability of the agent to the principal, and he could not, therefore, maintain a bill of interpleader against his principal and a third person claiming the fund by independent title. But it is settled that if such third person's title was not independent, but was derived from the principal, the other named conditions existing, such bill may be maintained. 4 Pomeroy's Eq. Jur. (3d Ed.) Secs. 1326, 1327; Gibson v. Goldthwaite, 7 Ala. 281, 42 Am.Dec. 592; Pearson v. Cardon, 11 Eng.Ch. 605.

So much for bills of interpleader strictly so called. Innumerable cases occur that have some of the features of a bill of interpleader, but have, in addition, other features that do not come within the definition of bills of interpleader. A complainant is not to be deprived of equitable relief, if entitled to it on other equitable grounds, because his case has some, but not all, of the attributes of interpleader in equity. For example, and to refer to a class of cases analogous to the one at bar, a complainant may have in his hands property or money to which others have conflicting claims, in reference to which property or conflicting claims the complainant may have equitable rights or claims and be entitled to equitable relief. In such case, while he cannot maintain a bill of interpleader strictly so called, he is nevertheless...