A bill filed 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, not being an original suit, but ancillary and dependent,
supplementary merely to an original suit out of which it arose, can
be maintained without reference to the citizenship or residence of
the parties.
Freeman v.
Howe, 24 How. 450, followed, and the language of
NELSON, J., in the opinion of the Court adopted.
The powers both of courts of equity and courts of law over their
own process to prevent abuse, oppression, and injustice are
inherent and equally extensive and efficient, as is also their
power to protect their own jurisdiction and officers in the
possession of property that is in the custody of the law.
When property in the possession of a third person claiming
ownership is attached by a marshal on mesne process issuing out of
a circuit court of the United States as the property of a
defendant, citizen of the same state as the person claiming it,
such person has no adequate remedy against the marshal in the state
court, and may seek redress in the circuit court having custody of
the property by ancillary proceedings; as, for instance, if the
original proceeding is in equity, by a petition
pro interesse
suo, or by ancillary bill, or by summary motion, according to
circumstances; or if it is at common law, by a summary motion or by
a proceeding in the nature of an interpleader; or if proceedings
authorized by statutes of the state in which the cause is pending
afford an adequate remedy, by adopting them as part of the practice
of the court.
In equity. In September, 1882, two of the defendants, partners
as Hyde & Brothers, brought an action at law in the circuit
court against Lewis C. Frey and Jacob C. Maag, partners as Frey
& Maag, to recover an amount alleged to be due for goods and
merchandise sold, and levied a writ of attachment issued therein on
a stock of goods in the City of Indianapolis, as the property of
Frey & Maag, which was in the possession of the appellant, and
of which at the time, as he alleges, he was owner. The property was
appraised as required by the statutes of Indiana, and its value
returned at the sum of $13,165.64. The goods were returned to the
appellant on his
Page 110 U. S. 277
giving to the marshal a delivery bond, conditioned to properly
keep and take care of the property, and deliver the same to the
marshal on demand, of so much thereof as might be required to be
sold on execution to satisfy any judgment which might be recovered
against the defendants in the action, or to pay the appraised value
of the property, not exceeding the amount of the judgment and
costs. The appellant was made on his own motion a party defendant
to the suit in order to assert his title, but on motion of the
plaintiff, his name was stricken from the record without prejudice
to his right to enforce his claim in some other form. Such further
proceedings were then had that, as provided by the statute, a large
number of the creditors of Frey & Maag came into the attachment
suit for the purpose of obtaining judgments and participating in
the distribution of the fund arising from the sale of the attached
property. Judgment was subsequently rendered therein in favor of
the original plaintiffs, and of these several creditors
respectively, and it was ordered that the attached property be sold
by the marshal for the satisfaction thereof. The appellant, as
required by the condition of his bond, not being able to return the
specific property attached, paid to the marshal the full amount of
its appraised value. He thereupon, the money being in the marshal's
hands, undistributed, filed this bill, to which all the parties in
the attachment suit, and the marshal, are made defendants, praying
that the marshal be restrained from paying the said fund, or any
part thereof, to the creditors in the attachment suit, and that the
same be adjudged to belong to the appellant, and paid to him
accordingly.
It is alleged that all the attachment creditors are nonresidents
of the State of Indiana; but it does not appear from the record
what is the citizenship of any of the parties to the bill.
The circuit court dismissed the bill for want of equity on the
ground that the complainant had a plain and adequate remedy at law,
from which decree and appeal was taken.
Page 110 U. S. 279
MR. JUSTICE MATTHEWS delivered the opinion of the Court. After
reciting the facts in the language above stated, he continued:
According to the law of Indiana, the giving of the delivery bond
did not divest the lien of the attachment upon the goods,
Page 110 U. S. 280
which remained, in contemplation of law, in the possession of
the officer,
Gass v. Williams, 46 Ind. 253; so that if the
proceedings had been in the state court, the appellant, while the
goods remained
in specie, on demand and refusal of a
return of the property to him by the officer, might have maintained
an action of replevin on proof of title.
Louthain v.
Fitzer, 78 Ind. 449.
Having disposed of the goods, so that he could not return them
in specie, it would seem that no action of replevin could
thereafter be brought, and, on general principles, be could not set
up his ownership as a defense to an action on the bond. Drake on
Attachment § 340. Under the practice in Indiana he would not be
permitted to become a party to the suit in order to have his title
there determined.
Risher v. Gilpin, 29 Ind. 53. And
accordingly, in the attachment suit of Hyde Brothers against Frey
& Maag, as stated in the bill, the appellant, having been at
first made a party on his own motion, was subsequently dismissed
from it. Payment of the appraised value of the attached property to
the marshal, which, by the terms of the delivery bond, he was bound
to make, it can hardly be insisted deprived him of his title to the
goods and their proceeds. Without giving the delivery bond, it is
true, the owner could have brought suit against the marshal for
trespass, although that would not in all cases furnish an adequate
remedy by giving damages for the value of the property taken.
Watson v.
Sutherland, 5 Wall. 74.
The only legal remedy which can be said to be adequate for the
purpose of protecting and preserving his right to the possession of
his property was an action of replevin. Of this remedy at law in
the state court he was deprived by the fact that the proceedings in
attachment were pending in a court of the United States, because
the property attached, being in the hands of the marshal, is
regarded as in the custody of the court. This was the point decided
in
Freeman v.
Howe, 24 How. 450, the doctrine of which must be
considered as fully and firmly established in this Court. In
meeting the objections made in argument to the conclusion of the
court in that case, Mr. Justice Nelson, delivering his opinion,
used the following language:
Page 110 U. S. 281
"Another misapprehension under which the defendant in error
labors, and in which the court below fell, was in respect to the
appropriate remedy of the plaintiffs in the replevin suit for the
grievance complained of. It was supposed that they were utterly
remediless in the federal courts, inasmuch as both parties were
citizens of Massachusetts. But those familiar with the practice of
the federal courts have found no difficulty in applying a remedy,
and one much more effectual than replevin, and more consistent with
the order and harmony of judicial proceedings, as may be seen by
reference to the following cases:
Pennock v.
Coe, 23 How. 117;
Gue v. Tide Water Canal
Co., 24 How. 257;
37 U. S.
12 Pet. 164;
33 U. S. 8 Pet. 1;
9 U. S.
5 Cranch 288."
"The principle is that a bill filed 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 an original suit
out of which it had arisen, and is maintained without reference to
the citizenship or residence of the parties."
"The case in
33 U. S. 8 Pet. 1, which was among
the first which came before the Court, deserves perhaps a word of
explanation. It would seem from a remark in the opinion that the
power of the court upon the bill was limited to a case between the
parties to the original suit. This was probably not intended, as
any party may file the bill whose interests are affected by the
suit at law."
It has been sometimes said that this statement was
obiter
dictum, and not to be treated as the law of the case; but it
was, in point of fact, a substantial part of the argument in
support of the judgment, and, on consideration, we feel bound to
confirm it in substance as logically necessary to it; for, if we
affirm, as that decision does, the exclusive right of the circuit
court in such a case to maintain the custody of property, seized
and held under its process by its officers, and thus to take from
owners, wrongfully deprived of possession, the ordinary means of
redress by suits for restitution in state courts, where anyone may
sue, without regard to citizenship, it is but common justice to
furnish them with an equal and adequate remedy in the court itself
which maintains control of the property; and, as this may
Page 110 U. S. 282
not be done by original suits, on account of the nature of the
jurisdiction as limited by differences of citizenship, it can only
be accomplished by the exercise of the inherent and equitable
powers of the court in auxiliary and dependent proceedings
incidental to the cause in which the property is held, so as to
give to the claimant from whose possession it has been taken, the
opportunity to assert and enforce his right. And this jurisdiction
is well defined by Mr. Justice Nelson, in the statement quoted, as
arising out of the inherent power of every court of justice to
control its own process so as to prevent and redress wrong.
This principle was illustrated and applied in the case of
Bank v.
Turnbull, 16 Wall. 190. There, under a statute of
Virginia, the claimant of property taken in execution upon a
judgment rendered against another, gave to the sheriff a suspending
and forthcoming bond, which stayed the sale and maintained his
possession of the property until the title could be determined by a
statutory interpleader. This issue having been properly directed in
the state court, between parties who were citizens of different
states, a petition was filed for its removal to the circuit court
of the United States, under the removal Act of March 2, 1867. The
order of removal was reversed by this Court on the ground that the
suit "was merely auxiliary to the original action, a graft upon it,
and not an independent and separate litigation;" that
"it was provided to enable the court to determine whether its
process had, as was claimed, been misapplied, and what right and
justice required should be done touching the property in the hands
of its officers. It was intended to enable the court, the plaintiff
in the original action, and the claimant, to reach the final and
proper result by a process at once speedy, informal, and
inexpensive."
No one, even in equity, is entitled to be made or to become a
party to the suit unless he has an interest in its object, Calvert
on Parties 13; yet it is the common practice of the court to permit
strangers to the litigation, claiming an interest in its subject
matter, to intervene on their own behalf to assert their
titles.
Page 110 U. S. 283
"When any person," says Mr. Daniell, Ch.Pr. c. XXVI, § 7, p.
1057,
"claims to be entitled to an estate or other property
sequestered, whether by mortgage or judgment, lease or otherwise,
or has a title paramount to the sequestration, be should apply to
the court to direct an inquiry whether the applicant has any and
what interest in the property sequestered. This inquiry is called
an examination
pro interesse suo, and an order for such an
examination may be obtained by a party interested, as well where
the property consists of goods and chattels or personalty, as where
it is real estate. Thus, in
Martin v. Willis, 1
Fowl.Ex.Pr. 160, a person claiming title to goods seized under a
sequestration, obtained an order for an examination
pro
interesse suo, and in the meantime that the goods might be
restored to him on his giving security."
The same practice prevails in cases where property is put into
the hands of a receiver. Daniell, Ch.Pr. c. XXXIX, § 4, p. 1744.
The grounds of this procedure are the duty of the court to prevent
its process from being abused to the injury of third persons, and
to protect its officers and its own custody of property in their
possession, so as to defend and preserve its jurisdiction, for no
one is allowed to question or disturb that possession except by
leave of the court.
So the equitable powers of courts of law over their own process
to prevent abuse, oppression, and injustice are inherent and
equally extensive and efficient, as is also their power to protect
their own jurisdiction and officers in the possession of property
that is in the custody of the law,
Buck v.
Colbath, 3 Wall. 334;
Hagan v.
Lucas, 10 Pet. 400; and when in the exercise of
that power it becomes necessary to forbid to strangers to the
action the resort to the ordinary remedies of the law for the
restoration of property in that situation, as happens when
otherwise conflicts of jurisdiction must arise between courts of
the United States and of the several states, the very circumstance
appears which gives the party a title to an equitable remedy,
because he is deprived of a plain and adequate remedy at law, and
the question of citizenship, which might become material as an
element of jurisdiction in a court of the United States when the
proceeding is pending in it, is obviated by
Page 110 U. S. 284
treating the intervention of the stranger to the action in his
own interest, as what Mr. Justice Story calls, in
Clarke v.
Mathewson, 12 Pet. 164,
37 U. S. 172, a
dependent bill.
In the original action of Hyde Brothers against Frey & Maag,
in which the attachment was issued and levied, the jurisdiction of
the circuit court attached by reason of the citizenship of the
parties. But the statute of Indiana, granting and regulating the
process of attachment, provides, § 943, Rev.Stat. 1881, that after
the institution of the suit, and at any time before final judgment,
any creditor of the defendant may file and prove his claim, with
the right to participate in the distribution of the proceeds of the
attached property. In the present case, that actually took place,
and it is shown, on the face of the bill, that a large number of
persons, as to whom it is not stated, that they were citizens of
other states, competent to bring an original action in the circuit
court, and as to whom it does affirmatively appear, that the
judgment upon their claims in their favor are less than the
jurisdictional sum of $500, nevertheless, filed their claims,
obtained judgments, and will be entitled on distribution to divide
with the plaintiff and among themselves the money paid into court
by the appellant. So that unless he is allowed to intervene by his
present bill to stay the distribution of the fund, which, by the
demurrer, is admitted to be his own, the anomaly will be presented,
in judicial proceedings, of an award, dividing property among
claimants, from which the only person excluded is the one whose
sole and paramount title is confessed, and he will be compelled to
stand idly by to witness the dissipation of his property into many
unknown hands, by a court, to whose jurisdiction he has submitted
himself from the beginning, and which now remits him to an action
for damages against its own officer who has simply acted under its
order.
This Court has uniformly resisted the tendency to confuse the
boundaries of law and equity in its procedure, and maintained the
distinction between the two systems, so deeply imbedded in our
jurisprudence, and in the present instance, is not to be considered
as departing from the consistent course of precedents in which that
distinction has been maintained. The
Page 110 U. S. 285
bill in this case is not to be treated as an original bill in
equity, for, as such, it could not be maintained. It is altogether
ancillary to the principal action at law in which the attachment
issued, and should be regarded as merely a petition in that cause,
or dependent upon it and connected with it, as a petition
pro
interesse suo, or of intervention in an equity or an admiralty
suit, asserting a claim to property or a fund in court, the subject
of the litigation, which, owing to the peculiar relations between
the courts of the states and of the United States, is a necessary
resort to prevent a failure of justice, and furnishes in such cases
a certain, adequate, and complete remedy against injurious abuses
of the process of the court, by supplying a means, in the principal
suit, of trying the title to property in the custody of the
law.
The character of the bill as related to the principal case is
well explained in
Minnesota Company v. St. Paul
Company, 2 Wall. 609,
69 U. S. 633,
where it is stated
"that the question is not whether the proceeding is supplemental
and ancillary, or is independent and original in the sense of the
rules of equity pleading, but whether it is supplemental and
ancillary, or is to be considered entirely new and original, in the
sense which this Court has sanctioned, with reference to the line
which divides the jurisdiction of the federal courts from that of
the state courts. No one, for instance, would hesitate to say that,
according to the English chancery practice, a bill to enjoin a
judgment at law is an original bill in the chancery sense of the
word. Yet this Court has decided many times that when a bill is
filed in the circuit court to enjoin a judgment of that court, it
is not to be considered as an original bill, but as a continuation
of the proceeding at law; so much so that the court will proceed in
the injunction suit without actual service of subpoena on the
defendant, and though he be a citizen of another state, if he were
a party to the judgment."
And in speaking of the application of the principle to the case
then before it, the Court, MR. JUSTICE MILLER, delivering its
opinion, continued:
"The case before us is analogous. An unjust advantage has
Page 110 U. S. 286
been obtained by one party over another by a perversion and
abuse of the orders of the court, and the party injured comes now
to the same court to have this abuse corrected, and to carry into
effect the real intention and decree of the court, and that while
the property, which is the subject of the contest, is still within
the control of the court and subject to its order."
The question was discussed in
Van Norden v. Morton,
99 U. S. 378, where
the court pointed out the mode of reconciling the distinction
between original legal and equitable rights and remedies, as
administered in the courts of the United States, and ancillary
proceedings to restrain and control their process. Referring to the
statutory injunction given by the law of Louisiana to restrain "the
sheriff in the execution of a judgment" when
"he has seized property not belonging to the defendant, and
insists on selling the same, disregarding the opposition of him who
alleges that he is the real owner,"
MR. JUSTICE MILLER, delivering the opinion of the Court,
said:
"Now this obviously refers to the control of the court over its
own officer, in the execution of its own writs, and is applicable
to other misconduct of that officer in the execution of his
official duties, as in cases of seizures of property not liable
under an execution in his hands. The remedy needs no formal
chancery proceeding, but a petition or motion, with notice to the
sheriff, is not only all that is required, but is the most speedy
and appropriate mode of obtaining relief. This relief does not
depend upon any inadequacy of an action for damages or by
sequestration. It is a short summary proceeding before the court
under whose authority the officer is acting, gives speedy relief,
and is very analogous to the statutory remedy given in many of the
western states in similar cases to try the right of property at the
instance of the party whose property is wrongfully seized."
It is in this light, we think, that the court below should have
regarded the present bill, not as an original bill invoking the
general jurisdiction of the court in equity, but as an ancillary
and dependent bill, equivalent in effect and purpose to a petition
in the attachment proceeding itself, incident to and dependent upon
it.
Page 110 U. S. 287
The form of proceeding, indeed, must be determined by the
circumstances of the case. If the original cause, in which the
process has issued or the property or fund is held is in equity,
the intervention will be by petition
pro interesse suo, or
by a more formal, but dependent bill in equity, if necessary.
Relief, either in a suit in equity, or an action at law, may
properly be given in some cases in a summary way, by motion merely,
supported by affidavits. In actions at law, where goods have been
taken in execution after judgment or upon attachment before a
proceeding in the nature of an interpleader might be appropriately
ordered by the court, such as was given in the English practice to
the officer by the statute of 1 & 2 Will. 4, c. 58; 2 Lush, Pr.
by Dixon, 777, and in that the respective rights of the claimants
to the property could generally be tried as in an action at law by
a jury, upon a formal issue framed for that purpose, or with the
consent of the parties by the court; or, if the claim was such as
that it could be determined only upon principles of equity, as
administered in courts of that general jurisdiction, it would be
proper to provide relief upon a bill of that nature, filed for that
purpose. If the statutes of the state contained provisions
regulating trials of the right of property in such cases, it might
be most convenient to make them a part of the practice of the
court, as contemplated by §§ 914, 915, 916 of the Revised Statutes.
In whatever form, however, the remedy is administered, whether
according to a procedure in equity, or at law, the rights of the
parties will be preserved and protected against judicial error, and
the final decree or judgment will be reviewable, by appeal or writ
of error, according to the nature of the case.
For the reasons given, we are of opinion that the circuit court
should have overruled the demurrer to the bill, and required the
parties to try the issue tendered to the appellant. The decree
dismissing the bill is accordingly reversed and the cause remanded
with direction to take such further proceeding therein in
conformity with this opinion as justice and equity require.
It is accordingly so ordered.