First Nat. Bank of Alma v. Moore

48 F. 799, 7 Ohio F. Dec. 124, 1892 U.S. App. LEXIS 1577

• Court: U.S. Circuit Court for the District of Southern Ohio
• Decided: January 28, 1892
• Status: Published

Opinion

Sacíe, J.,

(after stating the fads.) Although it appears from the bill that the Athens National Bank and the Pomeroy National Bank are entirely distinct and independent of each other as national banks, it also appears that the defendant Moore is cashier of the Athens bank, and vice-president of the Romeroy bank, and the defendant Norton president of .the Athens bank, and an officer and director of the Pomeroy bank ; and that they acted in concert in the prosecution of the fraudulent scheme set forth in the bill. It is true that the proceeds of the fraud were divided among the defendants. The claims filed with the receiver in favor of Norton, Moore, and the Athens bank aggregate §18,591.58, with interest, and the claim in favor of the Pomeroy hank is $2,500, with interest. The rule stated by Sir John Leach in Salvidge v. Hyde, 5 Madd. 146, applies, — that the test is not whether each defendant is connected with every branch of the case, but whether the bill seeks relief in respect of matters which are in their nature separate and distinct. “If the object of the suit be single, but it happens that different persons have separate interests in distinct questions which arise out of that single object, it necessarily follows that such different persons must be brought before the court, in order that the suit may conclude the whole object.” The relief sought in this case is the cancellation and delivery of all the fraudulent certificates, and the surrender of the securities obtained. The testimony relative to the fraud set forth in the bill will bear alike upon the claims of each of the defendants, and the circumstance that, if the decision be in favor of the complainant, it may be necessary to so shape the decree as to require the surrender by the defendants of the certificates or securities held by them respectively, is not material, as affecting the question of multifariousness. In Turner v. Robinson, 1 Sim. & S. 313, the bill was filed against the personal representatives of two decedents, and a demurrer for multifariousness was interposed. Vice-Chancellor Leach said that, as the complainants’title to their shares of the two estates was derived under the same instrument, they were entitled to unite the accounts of both estates in the same suit; and that, therefore, the bill was not multifarious. In Grant v. Insurance Co., 121 U. S. 105, 7 Sup. Ct. Rep. 841, a cestui que trust under 26 trust-deeds of land, executed to 5 different sets of trustees, to secure the payment of money, filed a bill, for the sale of the land. Some of the deeds covered only a part of the land, and but one of them covered the whole. The bill alleged that the trustees named in 22 of the deeds declined to execute the trusts. The holders of judgments and mechanics’ liens and purchasers of portions of the land were made defendants. Some of the trust-deeds did not specify any length of notice of the time and place of sale by advertisement. It was held that the bill was not multifarious. Counsel for the defendants urge that the test is whether one defense can be made to the entire bill, citing Attorney General v. St. John's College, 7 Sim. 241; and insist that none of the certificates mentioned in the bill of complaint are owned by the defendants jointly. Applying their own test thus suggested, the bill is not multifarious. There is but one defense, and that goes to the entire case. It is to answer the charges of fraud made by the complainant. If they are not sustained, the complainant has no equity, and the decree will be in favor of the defendants. If, therefore, the defendants will apply themselves to meeting and refuting those charges, they will have no occasion for any other or further or separate defense. The objection that the bill is multifarious is not well taken.

The demurrer for insufficiency and for want of equity must also be overruled. The bill sets forth a clear and flagrant case of fraud, which may be also criminal under the provisions of section 5209, Rev. St. U. S. The principles upon which the jurisdiction in equity in such a case is maintained are elementary. • Equity alone can afford adequate and complete relief by a decree for the cancellation and delivery of the fraudulent certificates and the surrender of the securities fraudulently obtained. These propositions are so plain and familiar as to need no verification by the citation of authorities. It is true that there is a remedy at law, as there is in every case of fraud ; but. the jurisdiction in equity and at law in relation to fraud being concurrent,"a defendant has no right to complain if the complainant selects that tribunal where he can obtain the most ample and satisfactory relief.

The demurrer will be overruled, and the defendants allowed 20 days within which to prepare answers, and present them to the court, with application for leave to file.