Royal Trust Co. v. Gardiner

Mr. Justice Robb delivered the opinion of the Court: It is apparent that this controversy involves the proceeds of the two insurance policies, and that, but for the failure of service on the trust company, it might have been determined under Mrs. Tiffany’s bill, the only question then being whether she or the trust company was entitled to those proceeds. Under such conditions, a bill in equity will lie, since thereby circuity, of action is avoided. Pease v. Supreme Assembly Royal Soc. G. F. 176 Mass. 506, 57 N. E. 1003. Before service as to the trust company had been quashed, the insurance company, complying with an order of the court, deposited the proceeds of the two policies in the registry of the court. No one questions that this deposit was made in good faith. After the dismissal of the trust company, the interlocutory order was passed directing payment of the fund to Mr. Gardiner, as attorney for Mrs. Tiffany. By the passage of that order the court did not determine, nor pretend to determine, the merits of the controversy. The order amounted to nothing more than a substitution of Mr. Gardiner as the custodian of the fund. Certain it is that it did not amount to an adjudication that Mrs. Tiffany was entitled thereto. Her bill disclosed that the trust company was a material party, and, in addition, the order was passed without notice to the insurance company. It was at this juncture that the trust company voluntarily came within the jurisdiction and instituted a suit on the law side of the supreme court against the insurance company for the proceeds of the policies, although, as we have seen, it theretofore had refused to have its rights determined in the equity suit. Under such conditions, if the facts warrant, the equity court has ample jurisdiction to restrain or regulate a suit at law without reference to the resi [575] dence of the parties. It would be a singular rule that would deprive a court of control over its own procedure. The regulation of a pending suit, where jurisdiction has attached, is merely an ancillary proceeding. It is not an attempt to gain jurisdiction over a foreign executor against his will, but is an assertion by the court of its right and power to exercise a jurisdiction voluntarily invoked, in such a way that full justice may be done. Freeman v. Howe, 24 How. 450, 460, 16 L. ed. 749, 752; Farwell v. Great Western Teleg. Co. 161 Ill. 522, 44 N. E. 891; Chalmers v. Hack, 19 Me. 124; South Penn Oil Co. v. Calf Creek Oil & Gas Co. 140 Fed. 507. We come now to the question whether a case has been made for equitable relief. It is not questioned that, had the fund deposited by the insurance company remained in the registry of the court, the company would now be in a position to file a bill of interpleader. To be sure, when it made the deposit the validity of service upon the trust company had not been passed upon, but no negligence can be attributed to the insurance company because of that fact. The fund was not deposited with an attorney for one of the contesting claimants, but with the court; and the depositor might well have assumed that unless the litigation should proceed it would be notified. Certainly it had no reason to suppose that either of the claimants would be permitted to take possession of the fund before his right thereto had been determined. The good faith of this company is still further apparent when its answer is examined. Realizing that, although it may not have been negligent in the strict sense of the term, its failure to watch the proceedings after the deposit of the proceeds may have contributed to the partial dissipation of that deposit, and realizing that the trust company ought not to be prejudiced by reason thereof, it tenders itself ready, able, and willing to respond to any claim the trust company may establish herein. And yet, notwithstanding that it has acted in good faith and notwithstanding that it has restored and reproduced, so far as the trust company is concerned, the situation existing at the time the original deposit was made, the insurance company, unless a court of equity intervenes, must defend the [576] suit of the trust company, and, as set forth in its answer, at a disadvantage. The rights of Mrs. Tiffany, as between her and the trust company, would not be determined in that suit, nor would the responsibility of Mrs. Tiffany and Mr. Gardiner to the insurance company be fixed thereby. It thus appears that vexatious, needless, and unsatisfactory litig’ation is bound to .ensue unless relief is granted herein. The controversy is one which, in its essence, appeals to a court of equity, for through the interposition of that court a comprehensive and adequate decree may be entered covering the whole controversy, and a multiplicity of suits thereby avoided. Such conditions justify the jurisdiction of equity. Oelrichs v. Spain (Oelrichs v. Williams) 15 Wall. 211, 21 L. ed. 43; Smyth v. Ames, 169 U. S. 466, 42 L. ed. 819, 18 Sup. Ct. Rep. 418; Grand Trunk Western R. Co. v. Chicago & E. I. R. Co. 73 C. C. A. 43, 141 Fed. 785; National Life Asso. v. Hopkins, 97 Va. 167, 33 S. E. 539; 16 Cyc. 63. It is immaterial that the insurance company may to some extent be interested in the subject-matter of the controversy, for although it could not have filed a bill of interpleader, it was in a position to ask and receive equitable relief. While the assertion of perfect disinterestedness is an essential ingredient of a bill of interpleader, no principle of equity jurisprudence is violated by permitting a party in interest to file a bill of that nature to ascertain and establish his own rights, where there are conflicting rights between third persons. Groves v. Sentell, 153 U. S. 465, 38 L. ed. 785, 14 Sup. Ct. Rep. 898; Provident Sav. Life Assur. Soc. v. Loeb, 115 Fed. 357; McNamara v. Provident Sav. Life Assur. Soc. 52 C. C. A. 530, 114 Fed. 910; 11 Enc. Pl. & Pr. 479. The answer of the insurance company was in effect a cross bill in which, as we have seen, affirmative relief was prayed; and, as it shows equities in the nature of an interpleader, relief should be granted. The parties are all before the court. A substantial part of the fund has been redeposited, and, in the event of a decree in favor of the trust company for a sum in excess of that part, it necessarily would follow that Mrs. Tiffany should return that excess. In case of her inability to respond to the order of the [577] court to that effect, Mr. Gardiner should make up the deficiency. Should he be unable to respond, a cpntingency not even suggested, the insurance company would be compelled to do so. In the event of a decree in favor of Mrs. Tiffany, the balance of the fund would be in the registry of the court to satisfy the decree. It thus appears that a single action will determine the rights of all the parties and permit full justice to be done. To the contention of the trust company that it was error for the court to enter the decree prior to the expiration of the time allowed to file its answer, little need be said, for the matter should have been brought to the attention of. the court below. It would be trifling with justice to permit an advantage to be taken of such an obvious inadvertence. Moreover, it is apparent that the question which the trust company desired to raise was that of jurisdiction, which was made the subject of its special plea. The decree, as modified by this opinion, is affirmed, with costs. Affirmed.