Patton v. Marshall

BOYD, District Judge (after stating the facts as above). It is the privilege of a complainant in a bill in equity to make such parties defendant in his suit as he may elect, provided such parties come within the class of tiecessary parties, or proper parties, or both; but even the complainant has no right to go beyond these 'classes, and bring into his suit those who have no connection with the controversy disclosed in the bill, nor interest or concern in its determination. It seems that the complainant in the equity cause of Fulton against Marshall, pending in the Circuit Court of the United States, had brought before the court all llie parties, so far as interests are disclosed by the record, necessary to a complete determination and adjudication of the subject-matter of his bill. In the outset he made party defendant T. Marcellus Marshall, in his own right and as administrator, with whom [354] the contract of sale had been made, and as against these parties the complainant sought specific performance. It was afterwards ascertained that Robert M. Marshall and John S. Withers claimed an interest in the proceeds of the sale, and it was further ascertained that the legal title to one of the tracts of land included was in Robert G. Rinn. It cannot be denied that if the Marshall last named and Withers and Rinn held title to> portions of the land included in -the contract of sale, or were entitled to participate in the distribution of the proceeds, they were at least proper, if not necessary, parties. It was the orderly course, therefore, when Fulton discovered that these persons were claiming an interest in the lands wherein he had contracted to buy coal rights which might in some way affect the title to be derived from T. Marcellus Marshall, that he should proceed by an amended bill to make them parties defendant. When Fulton had brought before the court as defendants in his action all such parties as he knew or had ground to believe were interested in the subject-matter of his action, he had the right to proceed with his cause without interruption on the part of one of the defendants by an effort to introduce into the litigation an independent disconnected controversy between such defendant and outside parties. If the complainant had omitted to bring in parties who were necessary to a complete determination of equities between himself and one or more of the defendants, or among defendants themselves, in regard to the subject-matter of the suit, a cross-bill was not the proper proceeding by which to' supply such defect. A cross-bill in equity possesses no such function. “The purpose of a cross-bill is either to obtain a discovery in aid of a defense to the original bill, or,to obtain full relief to all the parties touching the matter of the original bill.” Story’s Equity Pleading, § 385. “New parties cannot be introduced into a cause by a cross-bill. If the plaintiff desires to make new parties, he amends his bill and makes them. If the interest of the defendant requires their presence, he takes the objection of nonjoinder, and the complainant is forced to amend or his bill is dismissed.” Shields et al. v. Barrow, 17 How. 130, 15 L. Ed. 158. But, aside from this, Fulton’s suit was for the specific performance of 'a contract of sale, a cause of action peculiarly cognizable in a court of equity. It was of no concern to him what Marshall had agreed to pay his agents whom he had authorized to secure a purchaser for the coal rights in the lands, nor could the compensation for services due or claimed by such agents enter into Fulton’s cause, of action. In equity pleading, the answer is a defense to complainant’s bill, and does not set up grounds for affirmative relief. Such relief is granted upon a cross-bill. But affirmative relief in response to the prayer of a cross-bill is against either the plaintiff or a codefendant in the original bill. Street’s Fed. Equity Frac. vol. 2, § 1020. “The cross-bill' must, so it is held, be germane to the original bill. It must be confined to the same matters as the original bill, and it cannot introduce a new controversy not embraced in the original bill.” Street’s Fed. Eq. Prac. vol. 2, § 1030. This author lays down the further principle that a cross-bill is primarily a defense, and, being so considered, is confined to matters in [355] litigation in the original suit; otherwise, new matters might he introduced into a litigation by cross-suits without end; and still further says the same author, in section 1031: “A cross-bill is bad that goes beyond the original bill, and states a canse of action foreign to the primary dispute. A cross-bill may allege new or additional facts not set forth in the original bill, and be germane to the subject-matter of the action. The introduction of new facts do not render a cross-bill objectionable, but the making of a foreign or multifarious issue.” Johnson Railroad Signal Co. v. Union Switch & Signal Co. (C. C.) 43 Fed. 331, holds as well settled the rule that a cross-bill cannot introduce any new or distinct matter not within the scope of the original bill, nor such matter as is not necessary as a defense to the original bill or is foreign to the primary controversy. A cross-bill-which seeks no discovery and sets up no defense, except such as would be available by answer, is bad. Street, Fed. Eq. Prac. vol. 2, § 1022. See, also, Miller v. Rickey (C. C.) 146 Fed. 577. In Railway Co. v. United States, 101 U. S. 639, 25 L. Ed. 1074, it is held that a cross-bill cannot be used to bring in new and distinct matters, and in support the court cites in that case Ayers v. Chicago, 101 U. S. 184, 25 L. Ed. 838. A cross-bill must grow out of the original suit. It cannot bring in new and distinct matters. Rubber v. Goodyear, 9 Wall. 788, 19 L. Ed. 566, and Cross v. Del Valle, 1 Wall. 5, 17 L. Ed. 515. In this last case it is said by the court: “That a cross-bill is a mere, auxiliary suit, and a dependency of the original. It may be brought by a defendant against the plaintiff in the said suit, or against other defendants, or against both; but it must be touching the matters in question in the bill.” A cross-bill cannot introduce a new controversy, which it is not necessary to be decided in order to have a final decree on the case presented by the original bill. A cross-bill is “a proceeding to procure a complete determination of a matter already in dispute.” 2 Dan. Ch. Pr. 154-9, and note 2. The matter in dispute, as disclosed by Fulton’s bill, was only specific performance of Marshall’s contract. Suppose, for the sake of the argument, that Marshall had been the moving party, and had filed his bill against Eulton for specific performance of the contract of sale; no one would contend that Patton and Evans would have been either necessary or proper parties, for in the broadest view they had no interest which a decree against Eulton compelling him to carry out .his contract could affect. Then how can they be necessary parties to a decree requiring Marshall to accept the balance of the purchase money and make title to Eulton in compliance with the terms of the contract which the latter’s bill seeks to have specifically performed? We feel constrained in answer to this question to hold that Patton and Evans were not necessary or proper parties to Fulton’s bill. They had no interest in the subject-matter of controversy between Fulton and Marshall, nor in any controversy which might arise between defendants themselves within the scope or the purposes of the original bill. Following, therefore, in the line which we have pursued in discussing this case, and relying upon the authorities and decisions which we have cited, it is our conclusion that Marshall could not [356] by his cross-bill make Patton and Evans parties defendant to Fulton’s bill. So far as appellant’s first assignment of error is concerned, we might stop here; but there is another view presented by counsel which we must admit carries with it softie force, and that is that Marshall’s cross-bill, undertaking as it does to introduce into Fulton’s- suit new parties defendant against whom Marshall alone seeks relief, gives to his pleading the character of an original bill, and, this being so, that the essential element, to wit, diverse citizenship, as between Marshall and the new defendants, is wanting, and therefore the Circuit Court of the United States is without jurisdiction. As will be seen, Marshall and Patton and Evans are all citizens of West Virginia. If a cross-bill assumes the character of ,an original bill, it will be dismissed if wanting in the element of diverse citzenship which will be necessary to give jurisdiction to the-Circuit Court of the United States. Cross v. Del Valle, supra. See, also, Delaware, L. & W. R. Company v. Jersey City (C. C.) 168 Fed. 128. Appellants’ second assignment of error is based upon the proposition that the Circuit Court was without jurisdiction to enjoin proceedings in the action at law which Patton and Evans had brought against T. Marcellus Marshall in the state court. It will be observed that, when Marshall filed his cross-bill in the Fulton suit, the action at law brought by Patton and Evans against him in the state court had been pending nearly three years. Marshall had entered his plea of nonassumpsit, and had thereby raised an issue which the plaintiffs were entitled to have tried by a jury. It is also a fact, as appears in the record, that in the Fulton suit in the Circuit Court, which had also been pending for the same length of time, Marshall had filed his answer, to which Fulton had on the 28th day of June, 1904, made replication. This case was, therefore, at issue, and a decree for the parties to take testimony had been entered. In this situation, Marshall, by his cross-bill, was permitted to bring in Patton and Evans as parties defendant to the Fulton bill in the Circuit Court, and by a decree of that court to enjoin them from proceeding with- their action at law in the state court. The decree of the Circuit Court, therefore, had not only the effect to deprive Patton and Evans of their right to have the issue of fact raised by the pleadings in their suit against Marshall tried by jury, but at the same time the injunction issued by a court of the United States stayed a proceeding properly instituted and pending in a state court of West Virginia. • We do not deem it necessary to discuss the right of trial by jurv, but will pass on to the second proposition; that is, that by the injunction issued in this case the suit of Patton and Evans against Marshall, pending in a state court, was stayed. There can be no doubt of the power of the courts of the United States in the exercise of their 'equity jurisdiction to issue the writ of injunction. This power is inherent in the courts themselves, and is also amply secured by statutes which authorize them to issue all writs necessary for the exercise of their respective jurisdictions. Upon this general power, however, there is one important limitation, and that is by virtue of section 720 of the Revised Statutes, which declares: [357] “The writ of injunction shall not be granted by any court of the United States to stay proceedings in any court of a state, except in cases where such injunction may bo authorized by any law relating to proceedings in bankruptcy.” The Supreme Court of the United States has passed upon this statute in a number of cases, notably in the case of Peck et al. v. Jenness et al., 48 U. S. 612, 12 L. Ed. 841. In that case the Supreme Court, speaking through Mr. Justice Grier, says: “Act Cong. March 2, 1793, c. 66, § 5, declares that a writ of injunction shall not be granted ‘to stay proceedings in any court of a state.’ In the case of Diggs v. Wolcott, 4 Cranch, 179, 2 D. Ed. 587, the decree of the Circuit Court had enjoined the defendant from proceeding in a suit pending in a state court, and this court reversed the decree, because it had no jurisdiction to enjoin proceedings in a state court.” Following in line with this decision, the Supreme Court again, through Mr. Justice Bradley, in Haines et al. v. Carpenter et al., 91 U. S. 254, 23 L. Ed. 345, says: “In the first place, the great object of the suit is to enjoin and stop litigation in the state courts, and to bring all the litigated questions before the Circuit Court. This is one of the things which the federal courts are expressly prohibited from doing. By the act of March 2, 1793, it was declared that a writ of injunction shall not be granted to stay proceedings in a state court. This prohibition is repeated in section 720 of the Revised Statutes, and extends to all cases except where otherwise provided by the bankrupt law. This objection alone is sufficient ground for sustaining the demurrer to the bill.” There are other decisions of the Supreme Court in point upon this question, but we will not pursue the discussion further than to say that there are, it is true, some cases constituting exception to the general doctrine announced in the authorities we have cited. See Deizsch v. Huidekoper, 103 U. S. 494, 26 L. Ed. 497, in which Kern v. Huidekoper, 103 U. S. 485, 26 L. Ed. 354, is cited and approved, and French v. Hay, 22 Wall. 250, 22 L. Ed. 854, reaffirmed. Our case, however, is not within the exception, as a perusal of the opinions of the Supreme Court in the cases named will abundantly show. It is our conclusion, therefore, that there was error in the decree of the Circuit Court, and that it should be reversed. The case is remanded, to the end that Marshall’s cross-bill, so far as it concerns Patton and Evans, may be dismissed, and the injunction against them dissolved. Reversed.