Case Name: ROYAL TRUST COMPANY OF MONTREAL v. GARDINER; TIFFANY v. GARDINER
Court: Court of Appeals of the District of Columbia
Jurisdiction: District of Columbia
Decision Date: 1916-03-13
Citations: 44 App. D.C. 570
Docket Number: Nos. 2852 and 2879
Parties: ROYAL TRUST COMPANY OF MONTREAL v. GARDINER. TIFFANY v. GARDINER.
Judges: 
Reporter: Reports of Cases Adjudged in the Court of Appeals of the District of Columbia
Volume: 44
Pages: 570–586

Head Matter:
ROYAL TRUST COMPANY OF MONTREAL v. GARDINER. TIFFANY v. GARDINER.
Equity; Interpleader; Liee Insurance.
1. Equity has jurisdiction to entertain a suit to determine which of two rival claimants are entitled to the proceeds of a life insurance policy, as thereby circuity of action is avoided.
2. The regulation of a pending suit, where jurisdiction has attached, and to which a foreign corporation is a party, is merely an ancillary proceeding, and not an attempt to give jurisdiction over such party against its will.
3. The fact that a comprehensive and adequate decree may be entered covering the whole controversy between the parties, and a multiplicity of suits thereby avoided, will justify a court of equity taking jurisdiction of the controversy.
4. No principle of equity jurisprudence is violated by permitting a party in interest to file a bill in the nature of a bill of inter-pleader, to ascertain and establish his own rights, where there are conflicting rights between third parties.
5. An insurance company liable on a policy of life insurance filed a bill of interpleader against the beneficiary named in the policy and a foreign executor, whose testator, it was claimed, had made advances to the insured on account of premiums and had received an assignment of the policy. On motion of the executor, who specially appeared, the bill was dismissed against it for want of jurisdiction. Thereupon, the insurance company paid the proceeds of the policy into the registry of the court, and the attorney for the beneficiary, without notice to the insurance company, procured an order of the court directing the payment of the proceeds to himself, received them, and paid a- portion of them to the beneficiary. Thereafter, the executor instituted an action at law on the policy against the insurance company, and the attorney filed a bill in equity praying that he be permitted to pay the proceeds remaining in his hands, or under his control, into the registry of the court; that the beneficiary, his former client, be required to do likewise with the portion of the proceeds he had paid her, that the insurance com pany, the executor, and the beneficiary be required to interplead, and that the action at law be restrained pendente lite. The insurance company filed an answer, which it asked be taken as a cross bill, praying for the same relief and also seeking discovery from the executor and the beneficiary. A plea by the executor to the jurisdiction was overruled, and, through an inadvertence, not brought to the attention of the court, a decree granting the relief asked by the plaintiff and the insurance company was passed before an answer was filed by the executor. On appeals by the executor and the beneficiary, this court affirmed the decree on the grounds that the bill was maintainable as a bill in the nature of a bill of interpleader, and because in the single suit the rights of all of the parties could be determined. (Mr. Chief Justice Shepabd dissenting.)
Nos. 2852 and 2879.
Submitted December 7, 1915.
Decided March 13, 1916.
Hearing on appeals by two of three defendants from a decree of the Supreme Court of the District of Columbia granting the relief prayed for in a bill in the nature of a bill of inter-pleader and restraining the prosecution in an action at law.
Affirmed.
The Court in the opinion stated the facts as follows:
The Pittsburgh Life & Trust Company, a Pennsylvania corporation having an office and doing business in the District of Columbia, was liable on two policies of insurance on the life of Harry B. Tiffany, whose wife, Anna B. Tiffany, was the beneficiary. Mr. Tiffany died May 5, 1913, having assigned and surrendered the policies to J. Try Davies as security for money advanced. Mr. Davies died, leaving the Royal Trust Company of Montreal his executor. Administration was granted on the Davies estate in Canada. Both Mrs. Tiffany and the trust company claimed the proceeds of the two policies, aggregating $1,526.73. The insurance company admitted liability and was ready to pay the rightful claimant.
Thereupon Mrs. Tiffany, through her attorney, the appellee Gardiner, filed a bill in the supreme court of the District against both the insurance company and the trust company. In that bill she alleged, among other things, that all advances made by Davies for the payment of premiums on the above 'policies were fully repaid, and that after their repayment “she failed to receive and record the reassignment of said policies, to which reassignment she became and was entitled.” The insurance company answered that it held the proceeds for the person entitled thereto. Thereupon, the court passed an order directing payment into the registry of the court, and the insurance company complied with the order. The trust company then appeared specially and obtained a dismissal as to it for lack of jurisdiction. Thereafter the court, on the motion of Mr. Gardiner, passed an order directing the proceeds of the policies to be turned over to him, as attorney for Mrs. Tiffany, and this was done. Mr. Gardiner paid Mrs. Tiffany $600 of the sum thus received by him, with the agreement, it is alleged, that she would repay the same to him or the insurance company if it should he found that she was not entitled, thereto.
Subsequently, the trust company filed a suit at law in the supreme court against the insurance company, declaring upon these policies. The insurance company then discovering that the proceeds of the policies no longer were in the registry of the court, demanded of Mr. Gardiner that he turn over to it such proceeds, and he acceded to the demand to the extent of $771. Mrs. Tiffany also claimed the balance not paid her.
Thereupon Mr. Gardiner filed the bill herein, praying that he be permitted to pay into the registry of the court the sum of $926.73, less poundage, under his control, the insurance company acquiescing; that Mrs. Tiffany be required to redeposit the $600 conditionally paid her; that the defendants (that is, the trust company, the insurance company, and Mrs. Tiffany) be required to interplead; and that pending the final determination of the case the trust company be enjoined from prosecuting its suit at law.
The insurance company answered and, among other things, averred that the trust company was not entitled to the proceeds of said policies, save possibly as to a small part thereof, but that vhe insurance company has no means of proving the necessary facts to establish its defense in a law case; that, in order to do so, it is necessary to have discovery from both the trust company and Mrs. Tiffany. Affirmative relief, similar in part to that in Mr. Gardiner’s bill, was prayed, the insurance company tendering “itself ready, able, and willing to respond to any claim against it said defendant (trust company) may establish herein.”
.Mrs. Tiffany answered, admitting the general allegations of the bill and alleging, specially, the substance of the averments in her original bill. She admitted the receipt of the $600, but denied that she ever agreed to repay the same, and claimed the balance of the proceeds of the policies.
The trust company filed a special plea to the jurisdiction. Hearing was had, whereupon the plea was overruled. Five days were allowed in which to answer, but, according to the record entries, a decree in harmony with the prayers of the bill and the answer of the insurance company was entered on the same day. This inadvertence does not appear to have been brought to the attention of the trial justice, although the appeal of the trust company was not noted until almost three weeks thereafter. Under the decree Mr. Gardiner was directed to pay into the registry of the court the sum of $128.22, less the cost of filing the original bill herein; the insurance company to pay into the registry of the court the sum of $771.04, and Mrs. Tiffany the sum of $600: The action at law was restrained, and Mrs. Tiffany and the trust company were required to interplead, — • the trust company as plaintiff and Mrs. Tiffany as defendant. Mrs. Tiffany also noted an appeal from this decree. Thereafter, upon application by the trust company, a special appeal was allowed by this court.
Mr. Jackson H. 'Ralston and Mr. William E. Richardson for the appellant the Boyal Trust Company.
Mr. John Ridout for the appellant Anna B. Tiffany.
Mr. Lucas P. Loving and Mr. Wharton P. Lester for the appellee the Pittsburgh Life & Trust Company.
The appellee, Mr. W. Gwynn Gardiner, appeared in proper person.

Opinion:
Mr. Justice Robb
delivered the opinion of the Court:
It is apparent that this controversy involves the proceeds of the two insurance policies, and that, but for the failure of service on the trust company, it might have been determined under Mrs. Tiffany's bill, the only question then being whether she or the trust company was entitled to those proceeds. Under such conditions, a bill in equity will lie, since thereby circuity, of action is avoided. Pease v. Supreme Assembly Royal Soc. G. F. 176 Mass. 506, 57 N. E. 1003. Before service as to the trust company had been quashed, the insurance company, complying with an order of the court, deposited the proceeds of the two policies in the registry of the court. No one questions that this deposit was made in good faith. After the dismissal of the trust company, the interlocutory order was passed directing payment of the fund to Mr. Gardiner, as attorney for Mrs. Tiffany. By the passage of that order the court did not determine, nor pretend to determine, the merits of the controversy. The order amounted to nothing more than a substitution of Mr. Gardiner as the custodian of the fund. Certain it is that it did not amount to an adjudication that Mrs. Tiffany was entitled thereto. Her bill disclosed that the trust company was a material party, and, in addition, the order was passed without notice to the insurance company. It was at this juncture that the trust company voluntarily came within the jurisdiction and instituted a suit on the law side of the supreme court against the insurance company for the proceeds of the policies, although, as we have seen, it theretofore had refused to have its rights determined in the equity suit. Under such conditions, if the facts warrant, the equity court has ample jurisdiction to restrain or regulate a suit at law without reference to the resi dence of the parties. It would be a singular rule that would deprive a court of control over its own procedure. The regulation of a pending suit, where jurisdiction has attached, is merely an ancillary proceeding. It is not an attempt to gain jurisdiction over a foreign executor against his will, but is an assertion by the court of its right and power to exercise a jurisdiction voluntarily invoked, in such a way that full justice may be done. Freeman v. Howe, 24 How. 450, 460, 16 L. ed. 749, 752; Farwell v. Great Western Teleg. Co. 161 Ill. 522, 44 N. E. 891; Chalmers v. Hack, 19 Me. 124; South Penn Oil Co. v. Calf Creek Oil & Gas Co. 140 Fed. 507.
We come now to the question whether a case has been made for equitable relief. It is not questioned that, had the fund deposited by the insurance company remained in the registry of the court, the company would now be in a position to file a bill of interpleader. To be sure, when it made the deposit the validity of service upon the trust company had not been passed upon, but no negligence can be attributed to the insurance company because of that fact. The fund was not deposited with an attorney for one of the contesting claimants, but with the court; and the depositor might well have assumed that unless the litigation should proceed it would be notified. Certainly it had no reason to suppose that either of the claimants would be permitted to take possession of the fund before his right thereto had been determined. The good faith of this company is still further apparent when its answer is examined. Realizing that, although it may not have been negligent in the strict sense of the term, its failure to watch the proceedings after the deposit of the proceeds may have contributed to the partial dissipation of that deposit, and realizing that the trust company ought not to be prejudiced by reason thereof, it tenders itself ready, able, and willing to respond to any claim the trust company may establish herein. And yet, notwithstanding that it has acted in good faith and notwithstanding that it has restored and reproduced, so far as the trust company is concerned, the situation existing at the time the original deposit was made, the insurance company, unless a court of equity intervenes, must defend the suit of the trust company, and, as set forth in its answer, at a disadvantage. The rights of Mrs. Tiffany, as between her and the trust company, would not be determined in that suit, nor would the responsibility of Mrs. Tiffany and Mr. Gardiner to the insurance company be fixed thereby. It thus appears that vexatious, needless, and unsatisfactory litig'ation is bound to .ensue unless relief is granted herein. The controversy is one which, in its essence, appeals to a court of equity, for through the interposition of that court a comprehensive and adequate decree may be entered covering the whole controversy, and a multiplicity of suits thereby avoided. Such conditions justify the jurisdiction of equity. Oelrichs v. Spain (Oelrichs v. Williams) 15 Wall. 211, 21 L. ed. 43; Smyth v. Ames, 169 U. S. 466, 42 L. ed. 819, 18 Sup. Ct. Rep. 418; Grand Trunk Western R. Co. v. Chicago & E. I. R. Co. 73 C. C. A. 43, 141 Fed. 785; National Life Asso. v. Hopkins, 97 Va. 167, 33 S. E. 539; 16 Cyc. 63. It is immaterial that the insurance company may to some extent be interested in the subject-matter of the controversy, for although it could not have filed a bill of interpleader, it was in a position to ask and receive equitable relief. While the assertion of perfect disinterestedness is an essential ingredient of a bill of interpleader, no principle of equity jurisprudence is violated by permitting a party in interest to file a bill of that nature to ascertain and establish his own rights, where there are conflicting rights between third persons. Groves v. Sentell, 153 U. S. 465, 38 L. ed. 785, 14 Sup. Ct. Rep. 898; Provident Sav. Life Assur. Soc. v. Loeb, 115 Fed. 357; McNamara v. Provident Sav. Life Assur. Soc. 52 C. C. A. 530, 114 Fed. 910; 11 Enc. Pl. & Pr. 479. The answer of the insurance company was in effect a cross bill in which, as we have seen, affirmative relief was prayed; and, as it shows equities in the nature of an interpleader, relief should be granted.
The parties are all before the court. A substantial part of the fund has been redeposited, and, in the event of a decree in favor of the trust company for a sum in excess of that part, it necessarily would follow that Mrs. Tiffany should return that excess. In case of her inability to respond to the order of the court to that effect, Mr. Gardiner should make up the deficiency. Should he be unable to respond, a cpntingency not even suggested, the insurance company would be compelled to do so. In the event of a decree in favor of Mrs. Tiffany, the balance of the fund would be in the registry of the court to satisfy the decree. It thus appears that a single action will determine the rights of all the parties and permit full justice to be done.
To the contention of the trust company that it was error for the court to enter the decree prior to the expiration of the time allowed to file its answer, little need be said, for the matter should have been brought to the attention of. the court below. It would be trifling with justice to permit an advantage to be taken of such an obvious inadvertence. Moreover, it is apparent that the question which the trust company desired to raise was that of jurisdiction, which was made the subject of its special plea.
The decree, as modified by this opinion, is affirmed, with costs. Affirmed.