Weaver v. Marcus

• Decision Date: 31 January 1948
• Docket Number: No. 5680.,5680.
• Citation: 175 ALR 1305,165 F.2d 862
• Parties: WEAVER et al. v. MARCUS et al.
• Court: U.S. Court of Appeals — Fourth Circuit

175 ALR 1305, 165 F.2d 862 (1948)

WEAVER et al. v. MARCUS et al.

No. 5680.

Circuit Court of Appeals, Fourth Circuit.

January 31, 1948.

Everett L. Buckmaster, of Baltimore, Md. (Weinberg & Green and George L. Clarke all of Baltimore, Md., and J. Lynn Lucas of Luray, Va., on the brief), for appellants.

Thomas G. Scully and J. Sloan Kuykendall, both of Winchester, Va., for appellees.

Before PARKER, SOPER and DOBIE, Circuit Judges.

DOBIE, Circuit Judge.

Clarence Weaver, a citizen of Maryland, was killed in Virginia, when the automobile he was driving collided with a truck operated by William Costello, an employee of the defendants, who were partners trading under the firm name and style of Marcus Brothers. Bertha Weaver, a citizen of Maryland, qualified in that State as the Administratrix of the estate of Clarence Weaver, and later Bertha Weaver and Edwin Lucas, a citizen of Virginia, qualified in Virginia as joint Administratrix and Administrator of the estate of Clarence Weaver. Apparently this Virginia qualification was for the purpose of bringing a civil action in Virginia for the alleged wrongful death of Clarence Weaver.

A civil action was instituted in the United States District Court for the Western District of Virginia by Bertha Weaver and Edwin Lucas, Administratrix and Administrator of the estate of Clarence Weaver, as plaintiffs, against R. L. Marcus, J. K. Marcus, T. C. Marcus, J. L. Marcus and Carl Marcus (individually and as partners trading as Marcus Brothers) and William Costello, an employee of the defendants. This civil action was filed in the sincere belief that all the defendants were citizens of West Virginia. Acting on this same belief, plaintiffs caused service of process to be issued against all the defendants through the Commissioner of Motor Vehicles of Virginia under the Virginia Statute, Michie's Code, § 2154(70) (i), providing for such service upon non-residents of Virginia who operate motor vehicles over Virginia highways.

The District Judge granted a motion to quash the service under this statute on defendant Carl Marcus, upon a showing that Carl Marcus was a citizen of Virginia. Later, however, Carl Marcus saw fit to waive his rights in this respect and he accepted service of process upon him.

The only basis of jurisdiction of the District Court over this civil action was diversity of citizenship. Defendants attacked the jurisdiction of the District Court on the ground (which would defeat the jurisdiction) that one of the plaintiffs, Lucas, and one of the defendants, Carl Marcus, were both citizens of the State of Virginia.

Plaintiffs, thereupon, moved for a dismissal of the action as to the defendant, Carl Marcus. This motion was denied. The District Judge then dismissed the action for lack of jurisdiction, since the requisite diversity of citizenship was lacking because one plaintiff, Lucas, and one defendant, Carl Marcus, were citizens of the same State, Virginia. The District Court (quite properly, we think) considered and decided the motion of plaintiffs to dismiss as to Carl Marcus under Rule 21, Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, which provides: "Parties may be dropped or added by order of the court on motion of any party or of its own initiative at any stage of the action and on such terms as are just." This motion to drop Carl Marcus as a party defendant was opposed by Carl Marcus and all the other defendants. Quite obviously the plaintiffs desire the dropping of Carl Marcus in order that the District Court may retain jurisdiction of this civil action.

We agree with the statement in the opinion of the District Judge 73 F.Supp. 736, 737: "But the fact that Rule 21 provides that parties may be dropped `by order of the court' implies that the matter is one in which the court has the right to exercise some discretion and that it does not follow as a matter of right that a party can be dropped at the mere desire of the plaintiff."

And, ordinarily, the exercise of such discretion by the District Judge can be reversed on appeal only when there has been a clear abuse thereof. Here, however, we feel that the District Judge's denial of the motion by plaintiffs to dismiss as to the defendant, Carl Marcus, was based upon misconceptions of law, so we feel constrained to reverse this decision.

The Uniform Partnership Act was adopted in Virginia in 1918. Title 38, A, Chapter 175 A, Virginia Code (Michie, 1942) page 1596 provides:

"Sec. 4359(13). Partnership bound by partner's wrongful act. — Where, by any wrongful act or omission of any partner acting in the ordinary course of the business of the partnership, or with the authority of his co-partners, loss or injury, is caused to any person, not being a partner in the partnership, or any penalty is incurred, the partnership is liable therefor to the same extent as the partner so acting or omitting to act.

"Sec. 4359(14). Partnership bound by partner's breach of trust. — The partnership is bound to make good the loss:

"(a) Where one partner acting within the scope of his apparent authority receives money or property of a third person and misapplies it; and

"(b) Where the partnership in the course of its business receives money or property of a third person and the money or property so received is misapplied by any partner while it is in the custody of the partnership.

"Sec. 4359(15). Nature of partner's liability. — All partners are liable

"(a) Jointly and severally for everything chargeable to the partnership under Sections 13 and 14 (§§ 4359(13), 4359(14) of this Code).

"(b) Jointly for all other debts and obligations of the partnership; but any partner may enter into a separate obligation to perform a partnership contract."

The District Judge held here: "It would seem that since liability is `joint' (not joint and several) that all partners must be made parties defendant and this is the Virginia rule." No case has been cited to us, nor have we been able to discover a case, holding that, under the Uniform Partnership Act, the liability of partners for the tortious act of an employee within the scope of his employment is joint. The case of Brown v. Gorsuch, 50 W.Va. 514, 40 S.E. 376, cited in the opinion below, is not in point. That case did not involve the Uniform Partnership Act. What was actually decided in that case is clearly indicated in the Syllabus by the Court:

"1. In an attachment suit in equity against a partnership, where the attachment is levied on the social assets, it is necessary that the partners should both be before the court, either by actual or constructive notice, before any decree be made in relation to such property.

"2. It is error for the court to abate such attachment, and dismiss such suit, when one of the partners has been served with summons, because an order of publication has not been taken against the other; but the court should require the plaintiff to mature his suit within a reasonable time, fixed as to such absent partner, or suffer the abatement of the attachment and dismissal of the suit."

The generally accepted doctrine at common law is that the liability of the partners in tort would be joint and several and not joint. James — Dickenson Farm Mortgage Co. v. Harry, 273 U.S. 119, 47 S.Ct. 308, 71 L.Ed. 569; McIntyre v. Kavanaugh, 242 U.S. 138, 37 S.Ct. 38, 61 L.Ed. 205; Armstrong v. New La Paz Gold Mining Co., 9 Cir., 107 F.2d 453; Lindley on Partnership, 10th Ed., 356; Mechem, Elements of Partnership, §§ 312, 338; 40 American Jurisprudence 261. Though the language of the Uniform Partnership Act is a bit inept, we do not believe this language indicates any intention to change the common law doctrine, even though that Act, Virginia Code, § 4359(4) (1), Michie, 1942, does provide: "The rule that statutes in derogation of the common law are to be strictly construed shall have no application to this act."

The Act is crystal clear that the liability is joint and several where the wrongful act is that...