Kelleam v. Maryland Cas. Co.
312 U.S. 377 (1941)

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U.S. Supreme Court

Kelleam v. Maryland Cas. Co., 312 U.S. 377 (1941)

Kelleam v. Maryland Casualty Co of Baltimore, Md.

No. 349

Argued February 5, 1941

Decided February 17, 1941

312 U.S. 377

Syllabus

1. A federal court of equity should not grant a receivership except as ancillary to some primary relief which is sought and which equity may appropriately grant. P. 312 U. S. 380.

2. The reasons for such restraint are reinforced where the rights to the property sought to be conserved by a receivership are being litigated in a state court. P. 312 U. S. 381.

3. A remedial right to proceed in a federal court sitting in equity cannot be enlarged by a state statute. P. 312 U. S. 382.

4. After an estate had been distributed to heirs and the administrator and his surety discharged by a decree of a state probate court, and while an appeal by other heirs from a refusal of that court to set aside the decree for fraud was pending before another state court, the surety company entered a federal court on the ground of diversity of citizenship and sought protection against its contingent liability by a bill which impleaded all of the heirs, alleging that the probate decree was fraudulent and praying that the defendants be required to set up their claims and that a receiver be appointed to preserve the property pending the outcome of their dispute. For ought that appeared, the surety could have obtained protection in the cause pending in the state court.

Held:

(1) That appointment by the federal court of a receiver was an abuse of discretion. P. 312 U. S. 382.

(2) Since the bill should have been dismissed as to the surety, it having no present claim to relief on its own behalf in the federal court, that court had no jurisdiction to adjudicate the claims of the heirs, there not being diversity of citizenship between them. P. 312 U. S. 382.

(3) If the bill were to be construed as presenting a controversy between heirs which the federal court might otherwise have jurisdiction to adjudicate, that court could not properly proceed because the very controversy was before a state court in an action

Page 312 U. S. 378

not simply in personam. but involving adjudication of rights to specific property. P. 312 U. S. 382.

112 F.2d 940 reversed.

Certiorari, 311 U. S. 27, to review the affirmance of a decree appointing a receiver, providing for exoneration of the administrator's surety, adjudicating the rights of heirs in a decedent's estate, establishing a lien, ordering an accounting, etc.

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