Musgrove v. National Surety Corp.

191 F. Supp. 1, 1961 U.S. Dist. LEXIS 3163
CourtDistrict Court, N.D. Alabama
DecidedFebruary 2, 1961
DocketCiv. A. No. 1149
StatusPublished
Cited by2 cases

This text of 191 F. Supp. 1 (Musgrove v. National Surety Corp.) is published on Counsel Stack Legal Research, covering District Court, N.D. Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Musgrove v. National Surety Corp., 191 F. Supp. 1, 1961 U.S. Dist. LEXIS 3163 (N.D. Ala. 1961).

Opinion

GROOMS, District Judge.

This case is before the Court on motion to remand.

On February 17, 1958, Mrs. Gladys Leith Holmes filed a suit at law in the Circuit Court of Lauderdale County, Alabama, against W. T. Musgrove and William R. Cadenhead, individually and doing business .as Musgrove Insurance Agency (hereinafter referred to as Mus-grove and Cadenhead), claiming $50,000 as damages for the alleged negligent failure of the defendants therein to secure a binder on a policy of insurance issued by the Continental Casualty Company to Oliver Wendell Holmes, plaintiff’s deceased husband, extending insurance coverage to him while flying as pilot in an airplane. On February 21, 1957, Mr. Holmes was killed while piloting an airplane.

[2]*2On October 7, 1960, Musgrove and Cadenhead filed a bill in equity in the Circuit Court of Lauderdale County, Alabama, against Mrs. Holmes, now Mrs. Southwick, the National Surety Corporation, a New York corporation, and Continental Casualty Company1 an Illinois corporation.

This suit seeks a declaration that National Surety Corporation is obligated to defendant Musgrove and Cadenhead in the suit by Mrs. Southwick and to pay any judgment in excess of $1,000 obtained against them in that case under an Errors and Omissions Policy issued by National Surety Corporation to them. They pray that Mrs. Southwick be temporarily restrained and enjoined from proceeding further in her case against them.

In its removal petition, National Surety Corporation asserts that there is an improper joinder of parties defendant in that the sole controversy involving it is of such nature that the interests of defendant, Mrs. Southwick, are kindred and mutual with the interests of the plaintiffs and opposed to the interest of this defendant. It seeks realignment of parties; and also asserts that a separable controversy exists between it and the plaintiffs which is capable of being determined with complete relief being afforded without the presence of Mrs. Southwick who is neither an indispensable nor a necessary party herein.

The controversy has been presented in oral argument and by extensive briefs. The Court has independently researched the question.

The precise arrangement as to parties was presented in Bonell et al. v. General Accident Fire & Life Assurance Corp. et al.2 Bonell, who had been sued by one Bitts in the Supreme Court of Santa Clara County, California, called upon his insurer, General Accident, to defend. The insurer refused to so defend. Bonell then commenced an action for declaratory relief in the same court naming both Bitts and the insurer as defendants. Upon timely petition, the action was removed to the Federal court. The Court denied the motion to remand holding that proper alignment of the parties would place Bitts alongside Bonell, saying:

“As it appeared from the face of the complaint that both Bitts and Bonell were residents of California, a hearing was had upon the question of jurisdiction. At the hearing it was determined that the interests of Bonell and Bitts were identical with regard to the issue at bar, and that a proper alignment of the parties in this Court would place Bitts alongside Bonell as a party plaintiff.
“The plaintiffs Bonell and Bitts are both residents of the State of California, the defendant is incorporated under the laws of the Empire of Great Britain, and the amount in controversy exceeds the sum or value of $3,000; accordingly, there is the requisite diversity of citizenship, and the jurisdiction of this Court is founded upon 28 U.S.C. § 1332. * * * ”

There was no issue of an injunction in that ease. Does that fact make a material difference?

In First National Bank & Trust Co. of Minneapolis v. York Petroleum Co.,3 the action was against a foreign corporation and three resident defendants who owned all of the corporate defendant’s stock. The claim against the corporation was on a promissory note and certain guaranties executed by it. There was also a prayer for a receivership, and for an injunction against the individual defendants to prevent them from divesting or transferring any of the assets of the corporation. De[3]*3nying a motion to remand, the Court said:

“There can be no doubt but that plaintiff’s petition clearly sets forth a cause of action against the nonresident corporate defendant upon a promissory note; this is a controversy existing between a resident plaintiff and a nonresident defendant, in which the individual resident defendants have no concern. The other portions of plaintiff’s petition pleaded facts upon which they seek injunctive relief and the appointment of a receiver. There are several controversies involved in the suit, but, in my opinion, the main and principal controversy set forth in plaintiff’s petition is its attempt to recover upon the promissory note against the nonresident defendant.
«•**#**
“The right to recover a judgment upon the note against the nonresident corporate defendant contemplates a determination of that controversy between the resident plaintiff and the nonresident defendant, and complete relief of a judgment for the recovery of the sum due may be afforded without the presence of the individual defendants. Plaintiff’s petition is so drawn as to clearly show that the principal relief sought is the recovery of money due it upon the promissory note, and upon written guaranties executed by the nonresident defendant. It seeks incidental relief of injunction and the appointment of a receiver in order to aid in the accomplishment of its primary purpose — the collection of the money due it by the nonresident corporate defendant. By reason of pleading the separable controversy, the cause is removable to this court by the nonresident defendant.” (Italics supplied.)

As will be noted, the Court in the last cited case was referring to an injunction against individual acts and not an injunction to stay proceedings in a State court such as here presented. With certain stated exceptions, this Court is precluded from granting an injunction to stay proceedings in a state court.4 In view of an observation presently to be made, the Court need not decide the impact of that prohibition upon the ultimate solution of the problem at hand. The injunctive relief involves only Mrs. Southwick’s right to proceed in her case against Musgrove and Cadenhead. National Surety Corporation is not a party to that suit.

Musgrove and Cadenhead do not need, nor are they entitled to, an injunction in their suit in the Lauderdale Circuit Court in equity against Mrs. Southwick enjoining the prosecution of her suit in the Lauderdale Circuit Court at law against them.

It is the rule that an injunction will not ordinarily be granted in one action to enjoin proceedings in the sa'me court in another action, whether at law or in equity.5 In Fuentes v. Gaines,6 Justice Bradley, sitting as Circuit Justice, very aptly observed.

“This is a bill for injunction to stay proceedings in this court.

“I have been unable to find any precedent for such a bill; and I cannot see the necessity for it.

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Bluebook (online)
191 F. Supp. 1, 1961 U.S. Dist. LEXIS 3163, Counsel Stack Legal Research, https://law.counselstack.com/opinion/musgrove-v-national-surety-corp-alnd-1961.