Winter v. Ludlow

30 F. Cas. 331, 16 Leg. Int. 332

This text of 30 F. Cas. 331 (Winter v. Ludlow) is published on Counsel Stack Legal Research, covering U.S. Circuit Court for the District of Eastern Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Winter v. Ludlow, 30 F. Cas. 331, 16 Leg. Int. 332 (circtedpa 1859).

Opinion

CADWALADER, District Judge.

S. B. Ludlow is not a person against whom, as a party, an enforcement of any decree by judicial process would be necessary. The question whether he was a necessary party, depended, therefore, upon the species of necessity which is determinable with a sole reference to the right of contestation recognized by courts of equity as belonging to every person who has an interest in the subject of controversy. The act of 28th February, 1839, provides that where, in any suit at law, or in equity, commenced in any court of the United States, there shall be several defendants, any one or more of whom shall not be inhabitants of, or found within, the district where the suit is brought, or shall not voluntarily appear thereto, it shall be lawful for the court to entertain jurisdiction, and proceed to the trial and adjudication of such suit between the parties who may be properly before it; but the judgment or decree rendered therein shall not conclude or prejudice other parties not regularly served with process, or not voluntarily appearing to answer; and the nonjoinder of parties who are not so Inhabitants, or found within the district, shall constitute, no matter of abatement, or other objection to said suit. Under this act, a decree might have been made, without S. B. Ludlow as a party, so far as the amounts for which the original defendants were pecuniarily liable to the draftholders were concerned. But'such a decree, if these defendants were still insolvent, might have been of little avail to the complainants. The question principally considered, therefore, has been whether under the act, or independently of it, the objection could be disregarded as to the fund in the hands of the receiver. Of this fund the resulting ownership is in S. B. Ludlow, who, if the complainants’ case were fully sustained. has an option to redeem the fund by payment of the drafts in question from other sources. Independently of this right, he has an interest entitling him to contest every allegation of the bill on which a decree in favor of the draftholders might be founded, and to avoid, if he can, the effect of the complainants’ allegations, by introducing new matter. The act of 1839 does not sanction a decree that may affect such an interest unless its proprietor is before the court as a party. Shields v. Barrow, 17 How. [58 U. S.] 130, Coiron v. Millaudon, 19 How. [60 U. S.] 115, and Green v. Sisson [Case No. 5,768], show that the present ease, as to the fund in the receiver’s hands, must, therefore. be determined independently of that act.

In the circuit courts of the United States, in consequence of “the peculiar structure of their limited jurisdiction over persons,” the general rule of'equity practice, that all persons interested shall be brought in as parties, has not been applied without some qualification. Its unqualified application, in cases not within the act of 1839, would often divest these courts of their jurisdiction as it is defined in the constitution and acts of congress. Therefore, if a plaintiff has done all that lies in his power to bring every person interested before the court, a decree upon the merits may be made, though an interest exists in some person whom, as the resident of another state, the process of the court cannot reach, if the case may be completely decided as between the parties in court. But this relaxation of the rule has been admitted only where “the right of the party before the court did not depend upon the right of the party not before the court; each of their rights stood upon its own independent basis; and the ground upon which it was necessary, according to the general principle, to have both before the court, was, [332]*332to avoid multiplicity of suits, and to have the whole matter settled at once.” No exception from the rule has ever been allowed where the rights of the parties before the court, are not separable from, and independent of, the rights of the person who is not made a party. In such a case there can be no adjudication affecting the subject. This appears from the case of Mallow v. Hinde, 12 Wheat. [25 U. S.] 197-199, cited in Shields v. Barrow [supra], and in other decisions which might be mentioned.

According to these rules of decision, the •objection of the want of S. B. Ludlow as a party prevented a decree from being entered in favor of the complainants. For any reason other than to facilitate an appeal from a decision in support of this objection, the court was not willing to dismiss the bill hastily upon the objection. As between the complainants and the original defendants, this fund had been rightly taken into the •custody of the court for the purpose of preventing its malappropriation. There was no want of jurisdiction between these original parties; and at the stage of the cause at which the receiver was appointed, the objection of the want of other necessary parties would not have prevented his appointment. See [Mallow v. Hinde] 12 Wheat. [25 U. S.] 198; 2 Buss. 149, 152; 3 Hare, 62, 63. It might then have been expected that S. B. Ludlow, when apprised of the proceeding, would become a co-plaintiff. If, in an ulterior stage of the proceeding, the court found itself unable, without having him before it as a party, to make a decree upon the merits, the suggestion of the difficulty was by parties who did not support the objection upon any equity of their own. Whether a decree of dismissal could have been made at the instance of these defendants, without some provision for the future •security of the fund in court, is a question which it was not necessary immediately to decide. The fund could- not be restored to them, to be handed by them to Beebee & -Company, under the wrongful acts of appropriation which nave been mentioned, without permitting a palpable violation of honesty. Certainly, no decree, other than •one in favor of the draft holders, would have been proper while there was any probability that, if the cause were retained, the impediment in the way of such a decree on the merits might be removed. In the above cited ease of Mallow v. Hinde, an injunction against proceeding under judgments at law had been granted in( an early stage of a suit in equity, in which the objection of want of parties finally prevailed. The necessary parties who could not be served with process were named Taylor and the Beards. The supreme court said: “We have no doubt the circuit court had jurisdiction between the complainants and the defendant Hinde, so far as to entertain the bill, and grant an injunction against the judgments at law, until the matter could be heard in equity. And if it had been shown to the circuit court, that from the incapacity of that court to bring all the necessary parties before it, that court could not decide finally the rights in contest, the court, in the exercise of a sound discretion, might have retained the cause, and the injunction, on the application of the complainants, until they had reasonable time to litigate the matters of controversy between them and Taylor and the Beards in the courts of the state, or such other courts as had jurisdiction over them; and if then it was made to appear, by the judgment of a competent tribunal, that the complainants were equally interested with the rights of Taylor, the trustee, and the cestuis que trust, * * * the circuit court could have proceeded to decree upon the merits. * * * Such a proceeding would seem to be justified by the urgent necessity of the case, in order to prevent a failure of justice.” [Mallow v. Hinde] 12 Wheat. [25 ü. S.] 198, 199.

The court suggested its readiness to dismiss the bill without prejudice, founding the dismissal upon the want of S. B. Ludlow as a party, if such a dismissal would expedite an appeal from such a decision of the point.

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Cite This Page — Counsel Stack

Bluebook (online)
30 F. Cas. 331, 16 Leg. Int. 332, Counsel Stack Legal Research, https://law.counselstack.com/opinion/winter-v-ludlow-circtedpa-1859.