Eagle, Star & British Dominions v. Tadlock

14 F. Supp. 933, 1936 U.S. Dist. LEXIS 1415
CourtDistrict Court, S.D. California
DecidedApril 30, 1936
Docket886
StatusPublished
Cited by8 cases

This text of 14 F. Supp. 933 (Eagle, Star & British Dominions v. Tadlock) is published on Counsel Stack Legal Research, covering District Court, S.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Eagle, Star & British Dominions v. Tadlock, 14 F. Supp. 933, 1936 U.S. Dist. LEXIS 1415 (S.D. Cal. 1936).

Opinion

YANKWICH, District Judge.

Subdivision 26, § 41, title 28, U.S.C. A. (originally enacted on February 22, 1917, amended on May 8, 1926, and on January 20, 1936), gives district courts original jurisdiction of suits in equity begun by bills of interpleader or bills in the nature of interpleader filed by (among others') any person, firm, corporation, association, or society having issued a policy of insurance of the value of $500 or more if (1) two or more adverse claimants, citizens of different states, are claiming to be entitled to the money and (2) the complainant has deposited it into the registry of the court there to abide the judgment of the court. Such a suit may be brought although the titles or claims of the conflicting claimants do not have a common origin or are not identical but are adverse and independent of one another. The suit may be brought in the district court of the district in which one or more of the claimants reside or resides. The court is given power to issue process for all the claimants and to issue an order of injunction against all claimants *935 enjoining them from “instituting or prosecuting any suit or proceeding in any state court or in any federal court on account of such money.” The court is given power to hear and determine the cause and to discharge the complainant from further liability, to make the injunction permanent, and to enter all orders or decrees which may be suitable and proper, as well as to issue all customary writs as are necessary or convenient to carry it out and enforce it. In an action at law against any person, firm, corporation, association, or society, the defendant may set forth, by way of equitable defense, matters otherwise available by way of interpleader under this enactment, and join as parties claimants not already parties to the action. The statute is merely jurisdictional. It does not change the equitable principles of interpleader. Interpleader under this enactment is still governed by the general rules which govern it in federal courts. Calloway v. Miles (C.C.A.6, 1929) 30 F.(2d) 14; National Fire Insurance Company v. Sanders (D.C.Tex. 1929) 33 F. (2d) 157; Pacific Mutual Life Insurance Company v. Lusk (D.C.La. 1930) 46 F.(2d) 505.

Acting under this section, the complainant, a British corporation, has filed its bill in interpleader. Coincident with its filing it has deposited in the registry of the court the sum of $7,160, the proceeds of a marine insurance policy executed at San Francisco, Cal., on February 13, 1936, upon the Diesel vessel Yellowtail, payable to M. G. Tadlock and/or Security Trust & Savings Bank of San Diego and/or Gar-butt-Walsh, a copartnership, as their respective interests may appear. The Yellow-, tail burned on February 22, 1936, and sank at sea and became a total loss, owing to the perils insured against in the policy. The company admits its liability to the full extent of $8,000, the amount of the policy, from which is deducted, however, 'the sum of $840, the unpaid premium. It disclaims any interest in the amount deposited in the registry except to pay the same to the person or persons lawfully entitled to receive it. Conflicting claims to portions of the amount have been asserted by various defendants. They need not be detailed here, because we are concerned with one only of the claimants, who, in answer to the rule to show cause, has questioned the jurisdiction of the court to determine its • claim. The claimant is Garbutt-Walsh, a copartnership, who prior to the filing of the bill in interpleader filed, in admiralty, in our own court, a libel in personam against the complainant here, the assured and others, claiming a maritime lien upon the Yellow-tail by reason of materials, supplies, and equipment furnished in the sum of $4,358.-06, and asking that the proceeds of the maritime insurance be impressed with a lien in that amount.

Ultimately, the question involved is whether we have the power, under the provisions of the enactment cited, to enjoin the prosecution of the libel in admiralty and to compel the libelant in that case to litigate his right to the fund in this proceeding, in interpleader, on the equity pide of this court.

It would seem to me that the provision of the section giving district courts power to enjoin the claimants from “instituting of prosecuting any suit or proceeding in any State court or in any United States court” is direct authority for this court’s exercising equity jurisdiction to enjoin a litigant from prosecuting any suit now pending before this court in admiralty. The legislative history of the section compelá such conclusion. The direct authorization of injunctions against both state and federal courts was added by the amendment of 1926, and retained, with slight change of wording, by the amendment of 1936. Prior to the amendment of 1926, the courts had held that no power to issue injunctions against proceedings in state courts existed. Essanay Film Manufacturing Company v. Kane (C.C.A.3, 1920) 264 F. 959; Lowther v. New York Life Insurance Co. (C.C.A. 3, 1922) 278 F. 405. In one of the first suits brought under the 1926 amendment, Fidelity & Deposit Company v. A. S. Reid & Co. (D.C.Pa.1926) 16 F.(2d) 502, 504, Thompson, District Judge, thus interpreted the purpose of the enactment:

“Congress has provided in the act an appropriate remedy to bring into one court, where diversity of citizenship exists, the conflicting claims of adverse parties against a fund held by one having no interest in its distribution, in order that the rights of all claimants may be determined in an orderly manner in one proceeding, thus avoiding a multiplicity of suits. The Constitution has given to the court the capacity to take jurisdiction, and the act of Congress has supplied it. Therefore the two things necessary to create jurisdiction have vested in this court the power, not only to enjoin the institution of any suit or proceeding in another court on the bond, but also the prose *936 cution of any such suit or proceeding already begun when the instant suit was brought.” (Italics added.)

The very purpose of interpleader would be defeated if the court given jurisdiction to entertain the bill were not given the power to compel litigants to bring to its forum the adjudication of all the claims to a fund as to which the claimant is a mere stakeholder. The remedy of interpleader would be illusory unless the court had the power upon a rule to show cause to discharge the stakeholder from liability and to compel the claimants to litigate their respective rights to the fund. The complete exercise of such power demands the existence in the court of the power to enjoin the claimants from instituting or prosecuting actions in other courts pertaining to the claim. See 32 Cor.Jur. p. 111. Equity courts are the only ones which can exercise that power by virtue both of their general jurisdiction and of the special jurisdiction given to them in matters relating to insurance. While the jurisdiction of district courts in admiralty, under the Constitution, is broader than the jurisdiction of English admiralty courts, courts of admiralty are yet courts of limited jurisdiction. Benedict on Admiralty (5th Ed.) p. 95. It is sometimes said that, in exercising their jurisdiction, admiralty courts may resort to principles of equity. But this only means that the court construes the instruments with the liberality of a court of equity. See O’Brien v. Miller (1897) 168 U.S.

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208 F. Supp. 464 (W.D. Missouri, 1962)
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161 A.2d 109 (New Jersey Superior Court App Division, 1960)
Hunter v. Federal Life Ins. Co.
111 F.2d 551 (Eighth Circuit, 1940)
Treinies v. Sunshine Mining Co.
308 U.S. 66 (Supreme Court, 1940)
John Hancock Mut. Life Ins. Co. v. Kegan
22 F. Supp. 326 (D. Maryland, 1938)

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Bluebook (online)
14 F. Supp. 933, 1936 U.S. Dist. LEXIS 1415, Counsel Stack Legal Research, https://law.counselstack.com/opinion/eagle-star-british-dominions-v-tadlock-casd-1936.