Shields v. Barrow
THIS was an appeal from the circuit court of the United States for the eastern district of Louisiana.
The history of the case is given in the opinion of the court.
It was argued by Mr. Benjamin, for the appellants, and by Mr. Janin, for the appellee.
Mr. Benjamin traced the case throughout all its complications, and then made the following points:--
1. The first question which will arrest the attention of the court, on the face of this record, is that of jurisdiction.
The complainant entered into a contract of the 9th November, 1842, which in its opening clause is stated to be tri-partite. The parties are, 1st, the complainant, a citizen of Louisiana. 2d, Thomas R. Shields, a citizen of Louisiana. 3d, Six individuals, indorsers for Shields four of whom are citizens of Louisiana, and two of Mississippi.
This contract was made to annul a sale of a plantation in Louisiana, made by the first party to the second.
In a few weeks after the date of the contract, the complainant abandoning the common domicile of himself, his purchaser, and two thirds of the indorsers, declining the aid of the state tribunals of his own State, appeals to the federal court in New Orleans, to set aside his contract, then changes his demand into a suit to enforce it, and ends by obtaining a decree against his fellow citizens of Louisiana, for a large sum of money.
On what ground is the jurisdiction of the circuit court of the United States, to determine a controversy between citizens of Louisiana, to be maintained?
The only authority cited by complainant's counsel, is Story's Eq. Pl. § 392, and authorities there cited.
This authority is not at all in point. It only refers to a question of pleading in equity, relating to cross-bills, but does not touch the question of jurisdiction. The cross-bill may unquestionably be filed to determine questions arising between the defendants, so as to enable the court to determine the whole matter in controversy. But in the present case, no relief was prayed by the cross-bill against co-defendants, but on the contrary a decree was prayed for against the original complainants; and in the decree itself, no notice whatever is taken of the cross-bill; but the court confines itself to deciding the claims of the original complainant against the original defendants, and the defendants in the cross-bill.
The device used in this case is perfectly transparent, and if successful, converts the federal courts into courts of unlimited jurisdiction, regardless of the citizenship of parties.
It requires no argument to show that the original bill could not possibly be sustained for want of proper parties. A bill to set aside an agreement for cancelling the sale of property, could not be entertained without the presence of the two parties to the sale, and agreement to cancel. But the court was without jurisdiction between these two parties, who were both citizens of Louisiana, and the bill should have been dismissed on its face. Instead of this, the defendants, citizens of Mississippi, having a common interest with these citizens of Louisiana, were forced, in spite of their protest, and under duress of the process of the court, to file a bill against their co-defendants, not for their own benefit, but in order to help the complainant to get a judgment against themselves, and against the co-defendants.
This court has repeatedly had occasion to determine that, where necessary parties to bills could not be brought into the federal courts, by reason of the constitutional limitation on their jurisdiction, the suit must be dismissed. The jurisprudence on this point has never varied, and the decisions are numerous. Where parties are merely formal, the court will dispense with their presence, but will never assume jurisdiction over them. Russell v. Clark's Executors, 7 Cranch, 69; Greenleaf v. Queen, 1 Pet. 148: Wormly v. Wormly, 8 Wheat. 421; Carneal v. Banks, 10 Ib. 181; Harding v. Handy, 11 Ib. 126; Mallon v. Hinde, 12 Ib. 193; Vattier v. Hinde, 7 Pet. 250; Dunn v. Clark, 8 Ib. 3.
The act of congress of 28th February, 1839, so far from authorizing such proceedings as were had in this suit, expressly contemplates the case where parties in interest cannot properly be brought before the court; and provides, that 'the judgment or decree shall not conclude or prejudice such parties.'
The plea to the jurisdiction ought, therefore, to have been sustained, as filed by those defendants who were citizens of Louisiana.
2. The court, being without jurisdiction as to Thomas R. Shields, who purchased the land, cannot decree, as against him, either for the rescission or specific performance of the contract of November 9, 1842. The bill, therefore, must be dismissed, because he is an indispensable party to any cause brought for either of those purposes. This proposition is too clear to require argument or authority.
3. There was error in permitting the complainant to bring an entirely new and different suit against the defendant, under pretext of amending his bill. The original bill was, to set aside a contract. The amendment prayed a specific performance of the same contract. This was not an amendment, nor a supplemental bill, but a new suit.
The allegation in the original bill, brought on the 19th December, 1842, set forth that complainant feared that defendants would refuse to execute their contract of 9th November, 1842, and prayed to have it rescinded. The defendants, by their answer, in March, 1843, denied any intention to violate the contract, and expressed their intention of executing it. This judicial confession of their liability to perform its terms estopped them from any contestation of its validity, and should have sufficed to satisfy complainant; who, however, seemed determined to have a litigation. Although willing to abandon his claim for a rescission of the contract, instead of discontinuing his suit, he engrafted in it an inconsistent demand, by what he calls an amendment.
This is contrary to all the rules of pleading in chancery. Story's Eq. Pl. 332, et seq.; Mitford's Ch. Pl. 385.
So where the original bill prayed that a bond might be delivered up to be cancelled, an amendment not allowed praving an account of what was due on the bond. Cresy v. Beavan, 13 Sim. 354.
4. The amended bill should have been dismissed, as disclosing no ground for equitable relief. The demurrer should have been sustained.
This amended bill sets forth no ground for the interposition of a court of equity; alleges no refusal, by defendants, to perform their contract; and prays for the payment of a sum of money due on promissory notes. This payment could have been obtained by a suit at law. In relation to the claim for a formal conveyance of the property, contained in the amended bill, it is clear that the defendants, Victoire Shields and William Bisland, could not be condemned to make a conveyance of title standing in the name of Thomas R. Shields. The amended bill was, therefore, nothing but a naked demand, in law, for the payment of a debt.
5. The only demands set up in the record against Elis, Guion, and Winder, are contained in the cross-bill, filed at page 54 of record. These defendants filed a plea to the jurisdiction of the court; and set up, in defence, the absence of any averment in the cross-bill, showing any cause of action against them. A reference to the cross-bill will show that, in point of fact, no complaint was made against them; and in no part of the record is there any demand, by Barrow, for a decree against them. There is a judgment against these parties, that they pay a large sum of money to Barrow; although the pleadings disclose no prayer for such a decree, in either the original or cross-bill.
It would be an idle take to pursue any further the examination of proceedings, so completely at war with all the rules of law, and all the principles which guide courts of justice in the discharge of their duties. The investigation is felt to be profitless; for the want of jurisdiction in the court below, over parties in whose absence no decree could be pronounced, must, of necessity, cause the reversal of the decree and dismissal of the suit.
Mr. Janin replied to these points, as follows:--
The counsel for the appellants makes the following points of law:
1. That the original bill ought to have been dismissed, because Thomas R. Shields, the former proprietor of the plantation which was retroceded to the complainant, is a citizen of Louisiana, and could, therefore, not be made a party to that bill.
It is contended that, in the absence of Thomas R. Shields, the rescission of the retrocession to Barrow could not be decreed.
This is precisely the difficulty which is removed by the act of congress of February 28, 1839, the 1st section of which is in the following words:-
'That where, in any suit at law or in equity, commenced in any court of the United States, there shall be several defendants, 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.'
All the authorities quoted by the appellants are anterior to that act.
If there was any thing in this point, it is too late to take advantage of it now. The defendants filed an answer to the bill, then a cross-bill, and afterwards only a demurrer, which does not even name the parties on whose behalf it was filed.
2. The court had no jurisdiction over those of the defendants who are citizens of Louisiana.
This point concedes, at last, the jurisdiction of the court over three of the defendants; namely, William Bisland, Victoire Shields, and William B. Shields, who are citizens of Mississippi.
But the court had, undoubtedly, jurisdiction to decide the corss-bill, filed by William Bisland and Victorie Shields, citizens of Mississippi, against Thomas R. Shields, George S. Guion, Van P. Winder, and Richard G. Ellis, citizens of Louisiana. These cross-bills demanded a specific performance of the contract of November 9, 1842; and that, and nothing else, was decreed by the court.
Can it be asserted that a court of equity, having that contract and all the parties to it once before it, would decree its specific performance so far only as it imposes obligations upon the complainant, and not in all its parts? A party to an indivisible contract must fulfil his contract, if he claim specific performance; 16 Pet. 169. The original and the cross-bill are one cause; 3 Daniels, Ch. Pr. 1743.
Nor did the circuit court err, in making the order of April 24, 1844, directing the filing of a cross-bill by William Bisland and Mrs. Shields. In the Mechanics' Bank of Alexandria v. Louisa and Maria Seton, 1 Pet. 303, this court held, that 'the general rule, as to parties, undoubtedly is, that when a bill is brought for relief, all persons materially interested in the subject of the suit ought to be made parties, either as plaintiffs or defendants, in order to prevent a multiplicity of suits, and that there may be a complete and final decree among all the parties interested. But this is a rule established for the convenient administration of justice, and is subject to many exceptions, and is more or less subject to the discretion of the court, and ought to be restricted to parties whose interest is involved in the issue, and to be affected by the decree.' Field v. Schieffelin, 7 Johns. Ch. R. 250; Story's Eq. Pl. § 393.
3. It is finally said that the complainant should not have been permitted to amend his bill, by joining the plaintiff in his cross-bill, in his demand for the specific performance of the contract of November 9, 1842.
A cross-bill is a defence. How can it be pretended that a plaintiff should not be permitted to admit, in his answer to a cross-bill, that he consents to the claim of the defendant, and to pray that the specific performance, insisted on by the defendant, may be ordered by the court, with such directions as the true nature of the contract requires? This is what Barrow said, in his answer to the cross-bill. He stated the same thing in his petition. That petition may have been, and probably was, superfluous; but it was not that petition, but Bisland's answer and cross-bill, which changed the issue, by averring his readiness to comply with the contract of November 9, 1842. Nay, if Barrow had been entirely silent, the specific performance of that contract would have been ordered under the cross-bill, in the absence of any evidence justifying its rescission.
These proceedings were not only conformable to practice, but imperiously dictated by circumstances, and the only ones which could be had. We shall prove this, and conclude this brief with some remarks showing the true position of the parties.
When the contract of November 9, 1842, was made, the complainant was the holder of the notes of Thomas R. Shields, to the amount of $119,956.35, the whole of which were indorsed by William Bisland, the most responsible of the defendants. Of these notes, $64,000 were then overdue, and Barrow had brought suits on them against Bisland. By the act of November 9, 1842, these notes were to be given up by Barrow, and the two suits against Bisland discontinued. Thomas R. Shields was to return the property, and to be released from all further liability; and Barrow was to receive, besides, $32,000, of which Bisland was to contribute $10,000. Bisland was, moreover, Thomas R. Shields's judgment creditor, in the sum of $47,374.35. Bisland, who might, perhaps, have been able to pay the $10,000 without inconvenience, might have been ruined by a judgment of $119,958.25, with ten per cent. interest, during the extraordinary depreciation of property and prostration of credit then existing in Louisiana. He was, therefore, greatly interested in securing the specific performance of the act of November 9, 1842, which afforded greater relief to him than to any other party.
And when, by his answer and cross-bill, Bisland avowed his willingness to abide by that act, Barrow took him by his word, and in compliance with Bisland's prayer, and without waiting for an order of court, at once dismissed the two suits against him, and deposited in court the notes of Shields, amounting to $119,958.38. It must, also, be observed, that Bisland had obtained an injunction, restraining Barrow from the prosecution of those suits, and from parting with those notes. On the other hand, the notes, amounting to $32,000, at one and two years, which Barrow was to receive under the contract of November 9, 1842, were to remain deposited in the hands of Leufroy Barras, the parish judge and ex officio notary public, before whom that act was passed, until R. R. Barrow should have acquired a title to the property, given up the notes, and released the parties to the act. This title Thomas R. Shields perseveringly and perversely refused to execute, and the aid of the court had to be invoked for it. During the pendency of the suit, Barrow could do no better than to deposit the original notes in court, and discontinue the suits against Bisland. The defendants had flattered themselves that the notes for $32,000 would remain in Terrebonne until after maturity, and without being presented for payment at the Bank of Louisiana, at New Orleans, where they were made payable; a danger which was averted only by the court ordering their removal to the clerk's office, by whose agency they were presented and protested. This was done in opposition to the unreasonable objections of the defendants. An application of the complainant, for the delivery of these notes, was refused by the court, at the instance of the defendants. If he had had possession of these notes, he could have instituted suits on them at law, against the parties thereto. From this he was prevented, by those parties themselves. He was hindered from suing on the original notes, by the injunction of Bisland. With what good grace, with what appearance of equity, do those parties now complain that he did not sue them at law, when they themselves industriously kept him tied up in chancery?
And what, after all, do the appellants contend for, in their elaborate brief? The judgment condemns them, in unequal portions, to pay $32,000 with interest. Of this principal sum, $26,500 are due by the three citizens of Mississippi, who are avowedly properly made parties to the suit: namely, by Mrs. Victoire Shields and William B. Shields, $9,333.33 1/3; and by William Bisland, for himself, $10,000, and as indorser for R. G. Ellis, $6,966.66 2/3. And here we find William Bisland making common cause with the other defendants, when it is clearly his interest that they should be made to abide by the contract which relieves him from his indorsement of $119,918.38, now more than doubled by interest.
Mr. Justice CURTIS delivered the opinion of the court.