MR. JUSTICE DAY, after making the foregoing statement, delivered the opinion of the court.
The Circuit Court sustained the plea of the defendants upon two grounds: 1, that the suit could not be maintained for want of the required diversity of citizenship; and, 2, that it could not be maintained as an ancillary or dependent proceeding for want of proper averments to bring the case within that branch of equity jurisdiction.
As the offer to amend and file a supplemental bill was not entertained in the court below, and as the exercise of this discretion is not reviewable here, except in special cases, we are only concerned with the correctness of the conclusion of the Circuit Court in dismissing the original bill.
As the case was brought on for consideration on bill of complaint and plea, the allegations of the plea are taken as admitted as upon demurrer thereto. Farley v. Kittson, 120 U.S. 303, 314.
Looked at as an original bill, it is elementary that all the
But we cannot concede the soundness of this claim. The action is against the firm, and every member of the firm is interested in the result. The proceeding is against them jointly. As between the complainant and the members of the firm who are residents of the State of New York there is no separable controversy. The partners are jointly and equally interested in the fund alleged to be held and in the disposition of the suit commenced by the complainant. This proposition is so plain as to scarcely require the citation of authorities. In Stone v. South Carolina, 117 U.S. 430, the State of South Carolina commenced an action to recover certain money from partners. Stone, one of the partners, sought to remove the case on the ground that he was a citizen of the State of New York. The application was denied, and upon this subject Mr. Chief Justice Waite, speaking for the court, said:
"The cause of action is joint, and only one of the defendants petitions for removal. . . . Neither is there any separable controversy in the case, such as might, if the necessary citizenship existed, allow Stone alone to remove the suit without joining Corbin with him in the petition for removal. The money sued for was received by the defendants as partners, and they are liable jointly for its payment, if they are liable at all."
We have no doubt that the case cannot be sustained as an original suit dependent upon diverse citizenship.
Can the bill be sustained as an ancillary or supplementary bill?
We had occasion to consider the nature of ancillary bills in
In the present case, the original action was begun to foreclose a mortgage upon property in Utah. It had nothing to do with the sale of the stock by the stockholders represented by Spencer Trask & Company. The stockholders were not parties to the Utah bill, nor could any relief be had against them in that suit. The purpose of Spencer Trask & Company in calling upon the vendors of the stock to deposit a certain amount, while having reference to the suit begun in Utah, did not evidence any agreement upon their part to indemnify the complainant because of any obligation or desire to protect him, but was a matter between that firm and the stockholders for whom it was acting. The purpose was to protect the selling firm, because of its guaranty to the purchasers of the stock, in case of any diminution in the value of the property in the event that the complainant prevailed in the suit in the Utah court. There was no privity of contract or trust relation between the complainant and defendants to this suit.
It is true that the affidavit of George Foster Peabody, upon which much reliance is had, gives some support to the claim that the advertisement embodied an agreement for the indemnification of the complainant. At most this is but the construction that Mr. Peabody placed upon the advertisement, and could not enlarge the rights of the complainant nor in any way change the true nature of the proceeding. Nor does it appear that this fund, had the complainant stood in such relation
Nor can the bill be maintained as one to stay waste. There is no estate of complainants in the hands of Spencer Trask & Company which is likely to be wasted pending the suit. As the complainant shows no legal or equitable right to the fund furnished by the stockholders, neither the method of its management nor its protection from diminution can concern him.
We are of opinion that the Circuit Court was right, and that the bill cannot be maintained either as an original or ancillary proceeding.