Dugas v. American Surety Co. - 300 U.S. 414 (1937)
U.S. Supreme Court
Dugas v. American Surety Co., 300 U.S. 414 (1937)
Dugas v. American Surety Co.
Argued January 13, 14, 1937
Decided March 29, 1937
300 U.S. 414
In a proceeding brought in the District Court by a surety company under the Interpleader Act of May 8, 1926, to interplead the several claimants upon a qualifying bond, the amount of the bond was paid by the surety into the registry of the court, and two decrees were entered, the first discharging the surety from further liability on the bond and enjoining the several claimants from prosecuting any suit against the surety on account of any claim or right arising out of the bond, and a later determining the rights of the several claimants in the deposited fund and directing its distribution among them on a pro rata basis. No appeal was taken from either decree. In an earlier proceeding in a state court, one of the claimants had obtained a judgment against the surety under the qualifying bond, from which judgment an appeal by the surety was pending, an appeal bond suspending execution having been filed. He objected to being brought into the interpleader, but agreed to the second decree in it and took his share of the distribution.
1. The District Court in the interpleader suit had jurisdiction of both the subject matter and the parties. P. 300 U. S. 425.
2. The decrees in the interpleader suit completely terminated the liability of the surety on the qualifying bond and fixed the full measure of the claimant's right under that bond. P. 300 U. S. 425.
3. Rulings of the district court in the interpleader suit on the objection of the claimant to being brought into the suit, on the bearing and effect of the prior judgment and proceedings in the state court, and on the right of the surety to be discharged from further liability in respect of his claim were all made in
the exercise of the court's jurisdiction, were subject to challenge and reexamination only on appeal, and became conclusive on the claimant in the absence of an appeal. P. 300 U. S. 425.
4. Though the payment was into the court's registry, and not directly to the claimants, it nevertheless was a lawful and effective payment under the Interpleader Act. P. 300 U. S. 425.
5. As the judgment in the state court was based solely on the qualifying bond, the payment of the bond and discharge of the surety, as effected in the interpleader suit, operated, under recognized principles of law and equity, to extinguish the claimant's right under the judgment. P. 300 U. S. 425.
6. In subsequently bringing suit in the state court on the appeal bond and attempting to realize on the prior judgment, the claimant contravened the fair intendment of the decrees in the interpleader suit. P. 300 U. S. 426.
7. As the claimant's right under the state court judgment was extinguished, he was no more entitled to realize on the judgment by suing the surety on the appeal bond than by suing the principal. P. 300 U. S. 428.
8. And as the surety on the appeal bond would be entitled to reimbursement from the principal were judgment to go against the former, the principal may be heard to complain. P. 300 U. S. 428.
9. The District Court has jurisdiction to entertain a supplemental bill in aid of and to effectuate its prior decrees. P. 300 U. S. 428.
10. Such a bill is ancillary and dependent, and the jurisdiction follows that of the original suit, regardless of the citizenship of the parties to the bill or the amount in controversy. P. 300 U. S. 428.
11. The power of the District Court to enjoin the claimant from further prosecution of his suit in the state court on the appeal bond finds support in §§ 2 and 3 of the Interpleader Act, as well as in settled adjudications respecting the power of a federal court to protect its jurisdiction and decrees. P. 300 U. S. 428.
82 F. 2d 953, affirmed.