Where a bill in chancery was filed in a state court by a citizen
of that state against parties some of whom resided in that state
and some in another state, and the latter removed the cause into
the circuit court of the United States and that court, after
Page 59 U. S. 468
answer filed, remanded it to the state court, this order was,
under the circumstances of the case, erroneous.
The real parties in interest were those who resided out of the
state. The circumstance that other and formal parties were joined
with them in the bill cannot oust the federal courts of
jurisdiction.
The case is stated in the opinion of the Court.
MR. JUSTICE NELSON delivered the opinion of the Court.
Davis, a citizen resident of Illinois, filed a bill in the 14th
Judicial Circuit of that state, in chancery, against the
appellants, citizens and residents of Pennsylvania, and four other
persons who will be more particularly noticed hereafter, setting
out various dealings and business transactions between the
complainant and the appellants, under the firm of Wood, Abbott, and
Co., from the year 1843 down to the year 1849. That in October of
the latter year, the firm, claiming to be largely in advance to the
complainant, sent one of the partners to his place of business for
the purpose of procuring a settlement of the accounts, and security
for the balance of indebtedness. The balance was ascertained to be
some $29,000, the payment of which was eventually secured by the
conveyance of certain parcels of real estate; the firm at the same
time entering into an agreement to resell and reconvey the same for
the amount of the debt and interest in one, two, three, and four
years. The complainant also gave his notes for the amount for the
purchase money. All the notes have been paid, and parcels of the
land reconveyed from time to time, except the last note of $6,000,
and the parcels of land retained as security for its payment.
This note having become due, the firm of Wood, Abbott, and Co.,
the appellants, transmitted it and a deed of the land to Foster and
Stohl, with directions to collect the money and on receipt of the
same to deliver the deed to the complainant. The note having been
presented for payment, it was refused, upon which they placed it in
the hands of Hooper and Campbell, attorneys at law, for collection.
The bill in this case was filed
Page 59 U. S. 469
against Wood, Abbott, and Co., the appellants, Stohl and Foster
the agents, and Hooper and Campbell the attorneys, setting out the
facts substantially as above stated, together with the additional
charges that the account presented by the firm of Wood, Abbott, and
Co., was overcharged and fraudulently made up, and that a much less
balance was due to them than the amount secured upon a fair and
equitable adjustment. The bill avers that Stohl and Foster had no
interest in the transaction except to receive the money on the
note, and to deliver the deed as agents of Wood, Abbott, and Co.,
and that Hooper and Campbell have no interest, except as attorneys
for the collection of the note. There is a prayer for subpoena
against all the defendants, and for answers; also that an account
be taken between the complainant and Wood, Abbott, and Co.; and the
note be given up, and the deed be delivered to complainant; that an
injunction be issued, enjoining Stohl and Foster and Hooper and
Campbell from delivering over the note to the appellants.
The firm of Wood, Abbott, and Co. entered their appearance at
November term, 1853, and petitioned the court, under the 12th
section of the Judiciary Act, for a removal of the cause to the
circuit court of the United States on the ground that they were
citizens and residents of the State of Pennsylvania, which
application was granted.
The appellants afterwards, in April, 1854, filed an answer to
the bill in the circuit court of the United States; and on the 29th
of June, 1855, that court ordered the cause to be remanded back to
the state court from which it was sent.
The case is now here on an appeal from that order.
The ground upon which the cause was remanded is that four of the
defendants were citizens of the State of Illinois -- namely Stohl
and Foster and Hooper and Campbell -- the same state of which the
complainant was a citizen. And this presents the question whether
or not these defendants were parties in interest in the subject of
litigation -- or in other words were proper or necessary parties in
the suit. It has been repeatedly decided by this Court that formal
parties or nominal parties or parties without interest united with
the real parties to the litigation cannot oust the federal courts
of jurisdiction if the citizenship or character of the real parties
be such as to confer it within the 11th section of the Judiciary
Act.
11 U. S. 7 Cranch
98;
7 U. S. 3 Cranch
267;
21 U. S. 8 Wheat.
421;
9 U.S. 5 Cranch
303.
It would be difficult to state a case of parties more destitute
of interest or in which they were used merely as formal parties
than in the case of these defendants. Stohl and Foster were simply
agents of Wood Abbott, and Co., with special instructions in which
the complainant had no participation and which could
Page 59 U. S. 470
be recalled at any time before carried into execution, and until
carried into execution, the complainant certainly could set up no
right under them, much less a right in disregard and defiance of
them. Even if the state court had gone on and decreed against these
defendants and compelled a surrender of the note or a delivery of
the deed in the absence of the principals, it could not have
extinguished the note or have transferred the title to the land, as
the decree could have had no binding effect upon them. Before the
surrender could extinguish the note or the delivery could have the
effect to pass the estate in the land, the decree must operate upon
the principals, the real parties in interest, and coerce them to
make such surrender or delivery. The agents had no authority to
represent them in the litigation. Nor had they any interest of
their own in the subject in controversy. This is not the case of a
stakeholder or holder of a deed as an escrow where a trust has been
created by the parties which is sought to be enforced by one of
them. In all such cases, the trustee may be a proper party, as he
has a duty to perform and which the court may enforce if improperly
neglected or refused.
The above view applies with equal if not greater force to the
case of the attorneys.
Even if there could be any doubt about the correctness of the
view above taken after the real parties in interest appeared and
took upon themselves the defense, the defendants, Stohl and Foster
and Hooper and Campbell, were no longer parties in interest or
necessary parties, as the possession of the note and of the deed by
the agents and the attorneys was, in judgment of law, the
possession of the principals and clients, and any decree or
injunction against them would bind the agents or attorneys. 6 Ves.
143; 1 Mer. 123; 1 Daniel's Pr. 343; 7 Hare 428; Story Eq.Pl. ยงยง
229, 231, 232.
We are satisfied that the decision of the court below was
erroneous, and that the order remanding the cause to the state
court must be
Reversed and the cause restored to its place in the circuit
court of the United States.