Virginia-Carolina Chemical Co. v. Home Ins. Co. of New York

113 F. 1, 51 C.C.A. 21, 1902 U.S. App. LEXIS 3922
CourtCourt of Appeals for the Fourth Circuit
DecidedFebruary 4, 1902
DocketNo. 415
StatusPublished
Cited by20 cases

This text of 113 F. 1 (Virginia-Carolina Chemical Co. v. Home Ins. Co. of New York) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fourth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Virginia-Carolina Chemical Co. v. Home Ins. Co. of New York, 113 F. 1, 51 C.C.A. 21, 1902 U.S. App. LEXIS 3922 (4th Cir. 1902).

Opinion

JACKSON, District Judge.

This case is now heard upon an appeal from the circuit court of the United States for the district of South Carolina. 109 Fed. 681. A bill was filed by the Home Insurance Company of New York and the German-American Insurance Company of New York against the Virginia-Carolina Chemical Company and 14 insurance companies, who were made defendants to the bill. The defendant the Virginia-Carolina Chemical Company had prior to the filing of this bill instituted actions at law in the court of common pleas of Charleston county, S. C., against each and all of its codefendants. Motions were made in each case before that court to transfer the several cases to the circuit court of the United States for the district of South Carolina, which were overruled, and the court retained the cases. Notwithstanding the refusal of the court of common pleas to transfer the several cases, the plaintiffs in this action, under the act of congress, seasonably took out the records in each case and filed them in the clerk's office of the United States court for the district of South Carolina, to be further proceeded therein before the circuit court of the United States. The object and purpose of this bill is to restrain the defendant insurance companies from the prosecution of these suits on the law side of the United States court, as well as elsewhere, to avoid a multiplicity of suits, and to have the cases all heard before the federal tribunal. The validity of these various policies of insurance is assailed for the reason that they were procured by fraud, misrepresentation, and concealment of the true value of the property insured; that the representations of the insured as to the value of the property were largely in excess of its value; that the various insurance companies, relying upon the good faith of the Virginia-Carolina Chemical Company, issued the policies upon'the representation made by the defendant company. Various other grounds of relief are set up in the bill, which we deem it unnecessary to consider at this time, for the reason that the issues raised by the plea and demurrer of the defendants refer largely to so much of the bill as we now have under consideration.

The plea raises the question of jurisdiction, and the right of the plaintiffs in this action to maintain this case in the circuit court of the United States for the district of South Carolina, for the reason [3]*3that the plaintiffs are citizens of New York, and the defendant the Virginia-Carolina Chemical Company is a corporation of the state of New Jersey. If this were an independent and original bill, the ground raised by the plea, possibly, would be fatal to the maintenance of this action; but it is not an original bill. It is an ancillary proceeding to the act Ions at law pending on the law side of the court. It is, however, claimed that, inasmuch as this is an ancillary proceeding, the circuit court of the United States has full jurisdiction, without regard to citizenship, to furnish relief in the controversies on the law side of the court. The supreme court, in the case of Freeman v. Howe, 24 How. 460, 16 L. Ed. 752, held that:

“A Mil on the equity side of the court to restrain or regulate judgments or suits at law in the same court, and thereby prevent injustice or an inequitable advantage under mesne or final process, is not an original suit, but ancillary and dependent, supplementary merely to the original suit out of which it has arisen, and maintained without reference to the citizenship or residence of the parties.”

In this case there are 14 original suits on the law side of this court, which the bill seeks to restrain and regulate, and to prevent any action that might work injustice to these defendants in the law actions. In the case of Dewey v. Coal Co., 123 U. S. 329, 8 Sup. Ct. 148, 31 L. Ed. 179, which was tried before the writer of this opinion, a suit was brought in the state court on the law side thereof, and removed to the United States court. After the removal of the case a cross bill was filed, raising certain questions to be litigated in the chancery proceedings. Objection was made that the court had no jurisdiction of the case, for the want of diverse citizenship, as appeared from the face of the bill. This objection was overruled by the court below, and the supreme court held that the objection was not well taken; the equity suit being the exercise of jurisdiction by the circuit court ancillary to that which it had already acquired in the action at law, which it might well entertain according to the rule in Krippendorf v. Hyde, 110 U. S. 276, 4 Sup. Ct. 27, 28 L. Ed. 145; Pacific R. Co. v. Missouri Pac. Ry. Co., 111 U. S. 505, 4 Sup. Ct. 583, 28 L. Ed. 498; Dewey v. Coal Co., 123 U. S. 329, 8 Sup. Ct. 148, 31 L. Ed. 179. Without further discussing the question of jurisdiction, we are of the opinion that the cases already cited dispose of that question, and that the bill filed in this case is properly an ancillary proceeding to the law actions, and for this reason we overrule the exceptions taken by the appellants to the jurisdiction of the court.

The main object and purpose of this bill is to prevent a multiplicity of suits, all involving the same legal questions, founded upon similar issues of fact; and for this reason in its nature it is ancillary to the actions at law. All the suits brought by the Virginia-Carolina Chemical Company against the various defendants seek to litigate the same legal right, and the legal liability of the defendant companies, if any there be, is the same; the only difference being the amounts involved in the various policies. The plaintiff, the Virginia-Carolina Chemical Company, in the actions at law sets up a common demand against all the defendants. The object and pur[4]*4pose of this bill is to determine the liability of the different defendants in a court of conscience, and, if the court should reach the conclusion that there is a liability on each of the policies mentioned, then the question would be, what is the extent of the liability? It is apparent from the policies in this case that, if there is any liability at all, then under the condition of the various policies the same must be apportioned, and in order to do that a reference should be made to a master to ascertain the amount of liability upon each policy. But, if the court should reach the conclusion that these policies were issued upon a false state of facts as to the value of the property insured, and that the insured could not recover upon them, then, under the terms and conditions of the policies, a court of equity, in the exercise of its powers, would enjoin the plaintiff on the law side of the court from the further prosecution of its demands.

This action might seem to savor of proceedings upon an original bill. Yet it is not an original bill; but, as we have said, it is an ancillary proceeding, founded upon proceedings at law, and, in fact, is but a mere continuation of them. If the cases at law were properly removed and transferred to the federal tribunal, then the bill, being an ancillary proceeding founded upon the pending law cases, derives its jurisdiction from the existence of those cases. It is claimed, however, that the proceedings are still pending in the state court.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Yuba Consolidated Gold Fields v. Kilkeary
206 F.2d 884 (Ninth Circuit, 1953)
Jamerson v. Alliance Ins. Co. of Philadelphia
87 F.2d 253 (Seventh Circuit, 1937)
Alliance Ins. Co. of Philadelphia v. Jamerson
12 F. Supp. 957 (E.D. Illinois, 1935)
Phipps v. Chicago, R. I. & P. Ry. Co.
284 F. 945 (Eighth Circuit, 1922)
Montgomery Light & Water Power Co. v. Charles
258 F. 723 (M.D. Alabama, 1919)
House v. Sterling Fire Ins.
182 P. 361 (Utah Supreme Court, 1919)
Robinson v. Wemmer
253 F. 790 (N.D. Ohio, 1918)
St. Louis-San Francisco Ry. Co. v. McElvain
253 F. 123 (E.D. Missouri, 1918)
Seibert v. Citizens Fire Insurance
12 Ohio N.P. (n.s.) 210 (Court of Common Pleas of Ohio, Franklin County, Civil Division, 1912)
Robertson v. Conway
188 F. 579 (Sixth Circuit, 1911)
Dixie Fire Insurance v. American Confectionery Co.
124 Tenn. 247 (Tennessee Supreme Court, 1910)
Scruggs v. American Cent. Ins. Co. of St. Louis
176 F. 224 (Fifth Circuit, 1910)
Rochester German Ins. Co. of Rochester v. Schmidt
175 F. 720 (Fourth Circuit, 1909)
Chamblee v. Atlanta Brewing & Ice Co.
62 S.E. 1032 (Supreme Court of Georgia, 1908)
Hobbs Mfg. Co. v. Gooding
164 F. 91 (U.S. Circuit Court for the District of Massachusetts, 1908)
Cleveland v. Insurance Co. of North America
44 So. 37 (Supreme Court of Alabama, 1907)
Fegelson v. Niagara Fire Insurance
103 N.W. 495 (Supreme Court of Minnesota, 1905)
Tisdale v. Three Insurance Companies
84 Miss. 709 (Mississippi Supreme Court, 1904)
Rochester German Ins. v. Schmidt
126 F. 998 (U.S. Circuit Court for the District of South Carolina, 1904)

Cite This Page — Counsel Stack

Bluebook (online)
113 F. 1, 51 C.C.A. 21, 1902 U.S. App. LEXIS 3922, Counsel Stack Legal Research, https://law.counselstack.com/opinion/virginia-carolina-chemical-co-v-home-ins-co-of-new-york-ca4-1902.