Rouse v. Hornsby
161 U.S. 588 · 16 S. Ct. 610 · 1896 U.S. LEXIS 2189 · 40 L. Ed. 817
March 23, 1896 · Docket 706
Headnotes
Generated summaries- Headnote 1
Hornsby intervened in the foreclosure suit to recover damages caused by negligent receivers. The Court held that such an intervention is merely an application for the allowance of a claim under the foreclosure, making it ancillary and thus within the equity jurisdiction of the circuit court.
- Headnote 2
Section 3 of the Act of March 8, 1887 (24 Stat. 552) allows a suit against receivers appointed by a circuit court without leave of the appointing court, thereby providing jurisdiction over claims against receivers.
The Court noted that even if Hornsby’s claim were a separate legal action, jurisdiction would exist because the receivers were officers appointed under the 1887 Act, which expressly permits suits against them without further court approval.
- Headnote 3
Supreme Court precedent holds that an ancillary claim against a receiver or a party to an equity suit does not require the jurisdictional prerequisites of a standalone legal action.
Citing Railway Co. v. Cox and related cases, the Court explained that when a claim is ancillary to a receivership or foreclosure, diversity and other jurisdictional requirements for an independent action are immaterial.
- Headnote 4
The Court dismissed Hornsby’s writ of error because the appellate judgment had become final; therefore the Court was not required to address the jurisdictional question that was not finally decided in the writ proceeding.
- Headnote 5
Hornsby filed a petition for damages caused by receivers in a foreclosure. The Court held the petition was merely an application for the allowance of a claim under the foreclosure, making it ancillary to the equity suit and therefore within the circuit court’s equitable jurisdiction.
- Headnote 6
Section 3 of the Act of March 8, 1887 authorizes a suit against receivers appointed by a circuit court without requiring leave of the appointing court.
Even if Hornsby’s claim were a separate legal action, jurisdiction would exist because the receivers were officers appointed under that statute, which expressly permits suit against them.
- Headnote 7
Decisions such as Texas & Pacific Ry. Co. v. Cox, Rouse v. Letcher, Gregory v. Van Ee, and Carey v. Houston & Texas Ry. Co. were cited to support that an ancillary claim remains within equity jurisdiction regardless of the parties’ citizenship.
- Headnote 8
The Court noted that the lower‑court decree affirmed on the writ of error was final under § 6 of the Judiciary Act of 1891, so it was not required to address the underlying jurisdictional question.
- Headnote 9
A jury trial on an ancillary claim does not alter the character of the proceeding; the claim remains within equity jurisdiction.
The Court observed that the reference of factual issues to a jury was within the court’s discretion and did not change the nature of the intervention, which was still an ancillary claim to the foreclosure suit.
- Headnote 10
A petition of intervention that merely seeks the allowance of a sum of money under a foreclosure proceeding is not an independent cause of action at law; it is an ancillary claim within the equity court’s jurisdiction.
In Hornsby, the petition for damages caused by the receivers was held to be nothing more than a request for an allowance of a claim under the underlying foreclosure, so the circuit court could hear it under its equitable jurisdiction despite lack of diversity.
- Headnote 11
Under § 3 of the Act of March 8, 1887 (24 Stat. 552), a suit may be brought against receivers appointed by a circuit court without needing leave of the appointing court.
The Court noted that even if Hornsby’s claim were a separate legal action, jurisdiction existed because the receivers were officers appointed under the 1887 Act, which expressly permits suit against them.
- Headnote 12
The Court relied on Texas & Pacific Ry. Co. v. Cox, Rouse v. Letcher, Gregory v. Van Ee, and Carey v. Houston & Texas Ry. Co. to affirm that ancillary claims are governed by the equity court’s jurisdiction, not diversity limits.
- Headnote 13
Because the Circuit Court of Appeals affirmed the order on the writ of error, the Court held it was not required to address the underlying jurisdictional question and therefore dismissed the writ.
- Headnote 14
Hornsby filed a petition for damages caused by the receivers in the foreclosure of the railway. The Court held the petition was nothing more than an application for the allowance of a claim under the foreclosure, so the circuit court could hear it in equity despite lack of diversity.
- Headnote 15
Under § 3 of the Act of March 8, 1887 (24 Stat. 552), a suit may be brought against receivers appointed by a circuit court without leave of the appointing court.
The Court noted that even if Hornsby’s claim were a separate legal action, jurisdiction existed because the receivers were officers appointed under that statute, which expressly permits suit against them without needing further court permission.
- Headnote 16
Prior Supreme Court decisions hold that a claim ancillary to an equity suit—such as a claim against a receiver—does not require the jurisdictional prerequisites of a stand‑alone legal action.
The Court relied on earlier cases, including Texas & Pacific Ry. Co. v. Cox and Rouse v. Letcher, emphasizing that when a claim is merely ancillary to a foreclosure, diversity or other jurisdictional requirements are irrelevant.
- Headnote 17
The lower‑court’s order was affirmed on the writ of error, making it the final order. Accordingly, the Court was not required to address the jurisdictional question and dismissed the writ of error.
- Headnote 18
A petition of intervention that merely seeks the allowance of a sum of money under a foreclosure proceeding is not an independent cause of action at law; it is an ancillary claim that lies within the equity court’s jurisdiction.
The court held that Hornsby’s intervention was nothing more than an application for the allowance of a claim under the foreclosure, so the circuit court could hear it as part of the equity suit.
- Headnote 19
Section 3 of the Act of March 8, 1887, permits a suit against receivers appointed by a circuit court without obtaining leave of the appointing court.
Even if Hornsby’s claim were a separate legal action, jurisdiction would exist because the receivers were officers appointed under that statute, which expressly authorizes suits against them.
- Headnote 20
Prior Supreme Court decisions hold that an ancillary claim against a receiver or other party to an equity suit does not require the jurisdictional prerequisites of a standalone legal action.
The Court cited Texas & Pacific Ry. Co. v. Cox and other cases to affirm that ancillary claims are within the equity court’s jurisdiction regardless of the parties’ citizenship.
- Headnote 21
The Court noted that the lower‑court order had been affirmed on the writ of error, so it was not required to entertain a jurisdictional issue and dismissed the writ.
- Headnote 22
The opinion explained that the jurisdiction of the circuit court over Hornsby’s petition was referable to its equity jurisdiction, not to any diversity‑based jurisdictional ground.
Opinion
delivered the opinion of the court.
The Mercantile Trust Company, a .corporation of New York, filed its bill against the Missouri, Kansas and Texas Railway Company, a corporation of Kansas, in the Circuit Court of the United States for the District of Kansas, for the foreclosure of certain mortgages, and Eddy and Cross were appointed receivers, upon whose decease Rouse was substituted.
Under a general order, to which he refers but which is not given in the record, Hornsby filed a petition of intervention in that suit seeking damages for injuries inflicted through the negligence of the receivers in the operation of the road. To this petition the defendants interposed a demurrer upon the ground that the petition did not state facts sufficient to constitute a cause of action, which was sustained and the petition dismissed, whereupon the case was carried to the Circuit Court of Appeals for the Eighth Circuit, the judgment reversed and the case remanded; Hornsby v. Eddy, 12 U. S. App. 404. Thereupon defendants answered on the merits and the intervenor replied. Defendants moved the court for a reference to a master, “which motion,” the record states, “ to refer the claim of John E. Hornsby against them as set. forth in the intervening petition of said Hornsby and • the issues joined thereon to a master,” was overruled. A jury was then empanelled on motion of the intervenor, a trial had, and verdict returned, whereupon the court entered .an order in these words, after setting out the verdict: .
“ And thereupon the court doth now approve said verdict and order and adjudge that the said intervenor, John E. Hornsby, have and recover of and from the said defendants, George A. Eddy and Harrison C. Cross, as receivers of.the property of the Missouri, Kansas and Texas Railway Company, the sum of fifteen thousand dollars ($15,000.00), together with interest thereon at the rate of 6 per cent per annum from this date, and also all costs herein expended by him, amounting to $-; and the property of said Missouri, Kansas and Texas Railway Company which was heretofore in the hands of said receivers and over which this court, now holds jurisdiction sh'a\l remain liable for said sum and sums, and said receivers are hereby ordered to allow, audit and pay said sum and sums into the registry of this court .for said ■ intervenor, John E. Hornsby; and if said receivers as such have not sufficient funds in their possession and under their control for that purpose, the property of said railway company remain liable therefor; to which orders .and judgment of the court the said defendants, George A. Eddy and Harrison O. Cross, as such receivers, at the time excepted. It is further ordered that the said defendants, George A. Eddy and Harrison C. Cross, as such receivers, have sixty days from this date in. which to prepare and present a bill of exceptions herein for allowance, and that execution in this case be stayed ten days from this date.”
The petition of intervention, the answer, and the various orders were all entitled in the case of The Mercantile Trust Company of New York v. The Missouri, Kansas and Texas Railway Company et al. From the final order of the court defendants took the case to the Circuit Court of Appeals for the Eighth Circuit by writ of error and also by appeal. The cause was heard in that court and the order of the court below affirmed. 67 Fed. Rep. 219. The Circuit Court of Appeals was of opinion that the appeal should be dismissed, and that the order below should be affirmed on the writ of error, because “ the intervening petition set up a cause of action exclusively cognizable at law, and was tried by a jury as such.”
If, as is said, the intervenor, the railroad company and the receivers were all citizens of Kansas, and this had been an action at law and not a petition of intervention in the equity suit, the jurisdiction of the Circuit Court would nevertheless have been maintainable on the ground that it was one arising under the Constitution and laws of the United States in that the receivers were appointed by the Circuit Court and derived their powers from and discharged their duties subject to those orders, and the right to sue them as such, without leave of the court which appointed them, was conferred by section three of the act of March 8, 1887, c. 373, 24 Stat. 552. Texas and Pacific Railway Co. v. Cox, 145 U. S. 593; Tennessee v. Union and Planters’ Bank, 152 U. S. 454.
In Railway Co. v. Cox, the objection was raised that neither of the defendants was an inhabitant of the district in which the suit was brought, and it was remarked that if the suit was regarded as merely ancillary to the receivership the objection was without force, but that, irrespective of that, the immunity was a personal privilege which might be waived, and which in that case had been waived. In the case before us the question in respect of an independent action at law is not presented, since this intervention was nothing more than an application for the allowance of a claim under the foreclosure proceedings.and as against the property or fund being administered. by the court. Rouse v. Letcher, 156 U S. 47. Defendants raised no objection to the determination of the entire matter on the intervention, and did not ask that an action at law be directed to be brought, and the reference of the questions of fact to a jury was within the discretion of the court and did not change the character of the proceeding.
The jurisdiction of the Circuit Court over the petition was clearly referable to its jurisdiction of the equity suit, which depended wholly upon diverse citizenship, and the case comes directly within recent decisions of this court holding that under such circumstances the decrees and judgments of the Circuit Courts of Appeals are made final by section six of the Judiciary Act of March 3, 1891. Rouse v. Letcher, supra; Gregory v. Van Ee, 160 U. S. 643; Carey v. Houston and Texas Railway Co., 161 U. S. 115. As the final order below, was affirmed by the Circuit Court of Appeals, we are not called upon to entertain jurisdiction simply because that affirmance was entered on the writ of error rather than the appeal.
Writ of error dismissed.