Maryland Casualty Co. v. Glassell-Taylor & Robinson

• Decision Date: 09 July 1946
• Docket Number: No. 11583.,11583.
• Parties: MARYLAND CASUALTY CO. v. GLASSELL-TAYLOR & ROBINSON et al.
• Court: U.S. Court of Appeals — Fifth Circuit

156 F.2d 519 (1946)

MARYLAND CASUALTY CO. v. GLASSELL-TAYLOR & ROBINSON et al.

No. 11583.

Circuit Court of Appeals, Fifth Circuit.

July 9, 1946.

Alfred C. Kammer, of New Orleans, La., and Norman F. Anderson, of Lake Charles, La., for appellant.

Clement M. Moss, Alvin O. King, and A. B. Cavanaugh, all of Lake Charles, La., Sidney L. Herold, Harry V. Booth, and Whitfield Jack, all of Shreveport, La., and Richard B. Montgomery, Jr., of New Orleans, La., for appellees.

Before McCORD, WALLER, and LEE, Circuit Judges.

WALLER, Circuit Judge.

The complaint in this case is in the nature of a bill of interpleader under Sec. 41(26), Title 28, U.S.C.A. and Rule 22 of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, which also seeks a declaratory decree under the provisions of Sec. 400 of Title 28, U.S.C. A. The plaintiff, Maryland Casualty Company hereinafter referred to as "the Casualty Company", is a corporation under the laws of Maryland. The defendants are: (a) Glassell-Taylor & Robinson, a partnership, and its co-partners, Ashton Glassell, Jay W. Taylor, and Julio P. Robinson, citizens of the State of Louisiana which defendants will be referred to as "Glassell"; (b) John W. Harris Associates, Inc., of Louisiana, a corporation under the laws of Delaware; (c) Paul E. Workman, a citizen of Texas; (d) Krause & Managan, a corporation under the laws of the State of Louisiana; (e) H. N. Mitchell, a citizen of Texas; (f) Mid-Continent Supply Company, a corporation under the laws of Delaware; (g) Hydraulic Development Corporation, a corporation under the laws of Massachusetts; (h) L. M. Ray, a citizen of Louisiana; (i) W. S. Dickey Clay Manufacturing Co., a corporation under the laws of Louisiana; and (j) McWane Cast Iron Pipe Co., a corporation under the laws of Alabama. All of those who were made defendants in the case had either filed suit or had made claims against the plaintiff in the total sum of $1,188,391.81.¹ The amount involved exceeded $3,000. There was the diversity of citizenship between plaintiff and claimants as is required under Rule 22, Federal Rules of Civil Procedure, and Sec. 400, Title 28, U.S.C.A., and as required under Sec. 41 (1) (c), Title 28, U.S.C.A.; there was also the diversity of citizenship between the claimants as is required in an interpleader suit under Sec. 41 (26), Title 28, U.S.C.A.

Plaintiff alleged that on the 28th of May, 1943, Glassell entered into a contract with John W. Harris Associates, Inc., of Louisiana, as the general contractor to do the following: (a) all clearing and grubbing for street rights of way; (b) all clearing and grubbing for rights of way of utility easements; (c) all clearing and thinning required in connection with parks and house sites; (d) all clearing and grubbing required in connection with the laying of railroad spur and sidings; (e) all excavations and grading for embankment required in connection with the laying of the railroad spur and sidings; and (f) furnishing and installing certain pipe and pipe culverts — all in connection with a housing project at Maplewood, six miles southwest of Lake Charles, Louisiana; that on the 5th day of June, 1943, Glassell entered into another contract with John W. Harris Associates, Inc., of Louisiana, agreeing to do all the work and furnish all the labor and materials for 2900 feet of track, with all required crossties, ballast, and turnouts, etc., on said housing project at Maplewood; that on the 2d day of July, 1943, Glassell entered into another contract with John W. Harris Associates, Inc., of Louisiana, whereby Glassell agreed "to perform all work, furnish all labor and material and finish, in a thoroughly workmanlike manner, under the direction, and to the satisfaction, of John W. Harris Associates, Inc. of Louisiana, the General Contractor, and Walker and Gilette, the Consulting Architect, and Cities Service Refining Corporation, the Owner, for the installation of a water distribution system, a sewerage collection system and the construction of certain roadways and roadway drainage on a housing project at Maplewood * * *."

The partnership of Glassell-Taylor & Robinson executed a performance bond on the 14th of August, 1943, with John W. Harris Associates, Inc., of Louisiana as Obligee, and the plaintiff as surety, in the sum of $595,000, wherein the obligation was to "indemnify the Obligee against any loss or damage directly arising by reason of the failure of the Principal to faithfully perform said contract," and which also provided: "That no right of action shall accrue upon or by reason hereof, to, or for the use or benefit of anyone other than the Obligee herein named."

The construction contract of July 2, 1943, covered by the bond of the plaintiff, also designates John W. Harris Associates, Inc., of Louisiana as the "General Contractor", Cities Service Refining Corporation as "Owner", Walker and Gilette, "Consulting Architect", and Glassell-Taylor & Robinson-Young as the "Subcontractor". Throughout the entire contract, which is attached to the complaint, these designations are continuously used. Glassell had no contract to construct any of the houses.

On February 29, 1944, according to the complaint — the allegations of which, on a motion to dismiss, must be taken as true — John W. Harris Associates, Inc., of Louisiana claimed that Glassell had defaulted its contracts and ousted the said partnership from the work and taken possession thereof after notice to the partnership.

The plaintiff denies that it is liable under any of the suits or claims for any sums. It alleges that all of the claims arose out of a construction of the same housing project and involve common questions of law and fact with reference to the liability, if any, of the Casualty Company to any of the defendants. It made all the allegations as to jurisdiction that are necessary under either Sec. 41 (26) of Title 28, U.S.C.A.; Rule 22, Federal Rules of Civil Procedure;² Sec. 41 (1)(c) of Title 28, U.S.C.A.; and Sec. 400 of Title 28, U.S.C.A.; and executed and deposited a bond in the full sum of the bond in lieu of depositing the cash, as is authorized by Sec. 41 (26), Title 28, U.S.C.A., as amended in 1936.

The plaintiff also alleges that in the event it is liable to any party because of the default of Glassell, its principal, it should in turn have judgment against Glassell for like amount. It prays for a judgment declaring: (a) that its bond, as surety for Glassell, is a conventional bond running solely in favor of John W. Harris Associates, Inc., of Louisiana, and not a statutory bond under Act 298 of the Acts of the Legislature of Louisiana for the year 1926, as amended; (b) that its liability, if any, under said bond is to be measured solely by the terms and provisions of the bond, with no right of action thereupon to or for the use of anyone other than John W. Harris Associates, Inc., of Louisiana; (c) that none of the defendants is entitled to recover from the plaintiff on said bond, but that if the Court should determine that the plaintiff is liable to any of the defendants, it will also determine the amount of its liability and require the defendants to interplead and settle between themselves their right to any money for which the bond is liable; (d) that the plaintiff be discharged from all liability except to such persons as the Court deems entitled to recover against it; (e) that if the Court should determine that the plaintiff is liable to any defendant, it will also give judgment in its favor against Glassell-Taylor & Robinson and the individual partners thereof in the amount of the liabilities against plaintiff so determined; and (f) that each of the defendants, their agents and attorneys, be temporarily and permanently restrained and enjoined from instituting any action against plaintiff for the recovery of the amount of said bond, or any part thereof, in any State Court or in any other Federal Court, and from proceeding further in the actions already instituted.

The lower Court sustained motions to dismiss the complaint³ chiefly because a concursus proceeding under the State statute relating to such bonds and claims in connection with such project had been brought and was pending in the State Court prior to this interpleader suit in the Federal Court; that there were interested parties who were before the State Court in the concursus proceeding that were not before the Federal Court; that in the concursus proceeding it was necessary to determine the rights of all interested parties in the entire subject matter — a result not necessary in the interpleader suit; that the concursus proceedings were broader in scope and more adequate to complete relief than the interpleader suit; and that the judgment in the concursus proceedings would be as fully conclusive on the parties as a decree of the Federal Court. The Judge was also of the view that the concursus proceeding partakes of the nature of an action in personam as well as an action in rem as to whatever amount, if any, might remain due by the owner to the contractor; and that the concursus proceeding would have prior jurisdiction over such res.

We think the lower Court was in error in dismissing the complaint. It stated a cause of action under: (a) the Interpleader Statute; (b) the Rules of Civil Procedure; and (c) the Declaratory Judgment Statute. The Court had jurisdiction of the parties and of the subject matter in all three of these aspects. The absence of parties who are not indispensable, but who ought to be brought before the Court, is not, under Rule 19 (b) of the Federal Rules of Civil Procedure, grounds for dismissing the complaint when the bringing in of such parties will not defeat jurisdiction in the case. Moreover, if the bond is not a statutory bond, but is only the conventional bond of a subcontractor given to the general contractor as obligee, as appears from the contract and the allegations of the complaint, which ...