Prince v. McLaughlin, 2007.

• Decision Date: 31 December 1926
• Docket Number: No. 2007.,2007.
• Citation: 16 F.2d 886
• Parties: PRINCE v. McLAUGHLIN.
• Court: U.S. Court of Appeals — First Circuit

16 F.2d 886 (1926)

PRINCE v. McLAUGHLIN.

No. 2007.

Circuit Court of Appeals, First Circuit.

December 31, 1926.

Edward O. Proctor, of Boston, Mass. (Sherman L. Whipple, of Boston, Mass., on the brief), for appellant.

Edward A. McLaughlin, Jr., of Boston, Mass. (Nathaniel Thayer, Jr., of Boston, Mass., on the brief), for appellee.

Before BINGHAM, JOHNSON, and ANDERSON, Circuit Judges.

BINGHAM, Circuit Judge.

This is a bill in equity brought by McLaughlin, trustee in bankruptcy of the Great Western Hide Corporation, against Lawrence A. Ford and Leon M. Prince individually to set aside as fraudulent an assignment of November 20, 1919, from Biar Crohon to them as trustees for the benefit of the firm of Schmoll Fils & Co. (represented by Prince as their attorney), and the Cass & Daley Shoe Company, a corporation, and Cass & Daley as individuals (represented by Ford as their attorney), and to require them to account for all moneys and properties received by them under said assignment and turn over to the plaintiff all moneys and properties in their possession and control, which they hold or claim to hold by virtue thereof.

In the District Court, the case was sent to a master "to hear the parties and their evidence, and to report to the court his findings of fact and his conclusions thereon, together with such parts of the evidence as any party may, in writing, request."

The master, having heard the parties, filed his report, in which he found many facts and reported such parts of the evidence as was requested, but failed to make some of the essential and more important conclusions of fact.

The case was then heard on the master's report and at the December term, 1925 (December 15, 1925), a decree confirming the report was entered. Thereafter, on December 23, 1925, this decree was revoked, and a decree was entered in which it was adjudged:

"(1) That the report of the special master be and it hereby is confirmed.

"(2) That the defendants Lawrence A. Ford and Leon M. Prince have no right, title, or interest, legal or equitable, in the shares of the Chevaux Kid Leather Company, or the certificates representing them, or any of them, by virtue of said instrument dated November 1920, 1919, or otherwise.

"(3) That the defendants Lawrence A. Ford and Leon M. Prince have no right, title, or interest, legal or equitable, either as trustees or otherwise, in any property purporting to be or to have been property of the said Chevaux Kid Leather Company, and received, held, possessed, or controlled by them or either of them, or by their agents and attorneys under and by virtue of said instrument dated November 1920, 1919, or otherwise.

"(4) That there is now in the hands of defendant Lawrence A. Ford the sum of fifty-eight thousand eight hundred and forty-four dollars and thirty cents ($58,844.30), which is the balance found after a just and true accounting of all property of every name and nature that came into the possession and/or control of said Ford under said assignment of November 1920, 1919, and/or that has been received, held, possessed, or controlled by him, his agents or attorneys in relation to and growing out of any and all matters comprehended by this cause of action and by the master's report herein confirmed, and that there is no property or assets in the hands of the defendant Leon M. Prince except shares of stock referred to in paragraph 5.

"(5) That the so-called shares of capital stock of the Chevaux Kid Leather Company described in the bill are in the possession of the defendant Leon M. Prince.

"(6) That the defendants and each of them be excused from making any further accounting.

"(7) That the defendant Lawrence A. Ford be ordered to surrender, transfer, and deliver to the plaintiff forthwith said sum of fifty-eight thousand eight hundred and forty-four dollars and thirty cents ($58,844.30) and that such delivery shall operate as a full discharge and release of said Ford from all further liability to any of the parties in this action, including liability for costs.

"(8) That the defendant Leon M. Prince be ordered to surrender, transfer, and deliver to plaintiff forthwith the certificate or certificates purporting to represent two hundred and ninety-eight (298) shares of the capital stock of the Chevaux Kid Leather Company referred to in said instrument dated November 1920, 1919.

"(9) That the plaintiff recover from the defendants his costs to be taxed by the clerk."

From this decree, Prince, on December 23, 1925, claimed an appeal in the District Court, gave good and sufficient security to answer all costs, and his appeal on that day was allowed.

The plaintiff now moves to dismiss the appeal on the ground that the court is without jurisdiction; that Ford, a necessary party, was not joined as appellant.

The appeal, according to the record, was taken, allowed, and perfected by the giving of security on the day and at the term of the District Court at which the decree was entered, and if the appeal was claimed and allowed in open court (as to which the record is not clear), it was properly taken, and, the case having been duly docketed here, this court would have jurisdiction. King v. Thompson, 110 F. 319 (6th Cir.).

In that case a railway company was the defendant in a suit to foreclose a mortgage on its railroad, in which one Thompson was allowed to intervene and assert a prior lien on its property. From a decree in favor of Thompson, King, and the Mercantile Trust Company, the plaintiffs in the foreclosure proceeding, against whom the decree ran as well as against the railway company, appealed without joining the railway company. It was assumed that the railway company was a necessary party, but inasmuch as the claim of appeal was made and allowed in open court at the time of the entry of the decree, it was held that in such case there is no necessity of issuing a summons and taking an order of severance for a party not joining in the appeal. In its opinion the court said:

"The appeal was taken in open court at the time the decree was entered. The railway company and other parties were presumably present, and bound to take notice thereof. They then had an opportunity to join in the appeal, if they desired to do so, and by refraining they signify their purpose not to appeal. In such case no citation is necessary. The parties are already in court, and the action of the court binds all the parties to the suit. An appeal allowed in this manner binds all the necessary parties to the appeal, without citation or summons and severance. They have constructive notice of the appeal, and may join therein at their election. In this case the receiver's appeal raises all the questions which the railroad company would raise by its separate appeal, and by its silence it signifies a willingness to let his appeal settle the rights of the parties. This was expressly ruled in McNulta v. Com'rs, 99 F. 328, 39 C. C. A. 545, and Rice Co. v. Libbey, 105 F. 825, decided in the Circuit Court of Appeals for the Seventh Circuit, and we are disposed to concur in the conclusions therein reached."

But counsel for the plaintiff here in court admits that Ford has no further interest in this suit, that at the hearing before the master he disclaimed all interest in the case, and that upon the confirmation of the master's report, having the property or moneys here in question in his possession, he turned the same over to the plaintiff and had the decree so drawn as to protect him from further obligation or liability, as appears in paragraph 7 of the decree. Under these circumstances as complete a severance was brought about as could be desired and as was necessary to authorize Prince to proceed with his appeal. Mercantile Trust Co. v. Kanawha & O. Ry. Co. (C. C. A.) 58 F. 6, 11, 12; Basket v. Hassell, 107 U. S. 602, 608, 2 S. Ct. 415, 417 (27 L. Ed. 500).

The latter case was a bill in equity, filed by Hassell, administrator of Chaney, to which, besides Basket, the Evansville National Bank, Bayard, its president, Reis, its cashier, and Shackelford and Richardson, attorneys for Basket, were defendants. The question was whether a certain fund, represented by a certificate of deposit, issued by the bank to Chaney in his lifetime, belonged to Basket, who had possession of the certificate, and claimed it as a gift from Chaney, or to Hassell, as Chaney's administrator. The final decree ordered the surrender of the certificate to Hassell, and that the bank pay to him the fund. The money was tendered by the bank and the certificate deposited with the clerk. Later Basket took an appeal and perfected it by giving bond for costs. To this appeal Hassell was made a party. Basket's codefendants not having appealed or been cited, Hassell moved to dismiss the appeal on the ground that they were necessary parties. It was there said:

"It is apparent that the sole controversy is between Basket and Hassell, the present parties to the appeal. By the delivery of the certificate of deposit to the clerk the attorneys of Basket are exonerated from all responsibility; and the payment of the money by the bank to Hassell equally relieves it and its officers; for, not being parties to the appeal, and the execution of the decree not having been superseded, the decree will always furnish them protection, whether affirmed or reversed, because, if reversed, it would only be so as between the parties to the appeal. So that the omitted parties have no legal interest, either in maintaining or reversing the decree, and, consequently, are not necessary parties to the appeal. Forgay v. Conrad, 6 How. 203 12 L. Ed. 404; Cox v. United States, 6 Pet. 182 8 L. Ed. 359; Germain v. Mason, 12 Wall. 261 20 L. Ed. 392; Simpson v. Greely, 20 Wall. 152 22 L. Ed. 338. The motion to dismiss the appeal is accordingly overruled."

Then again, in addition to the admission of counsel for the plaintiff here in open court. Mr. Ford has filed an affidavit in which he...