Court Opinion

ID: 8822688
Source: CourtListenerOpinion
Date Created: 2022-11-26 15:38:13.599834+00
Date Added: 2024-06-11T17:04:41.203621
License: Public Domain

On Petition for Rehearing.
PER CURIAM.
We dismissed the original bill in this case because the plaintiff had no lien upon or claim to the securities mentioned under section 57 of the Judicial Code, and also because the defendant Bright was not an inhabitant of the Southern district of New York or served therein. Following the general rule that a cross.-bill falls with the original bill, we also dismissed the counterclaims which under equity rules 30 (201 Fed. v, 118 C. C. A. v) and 31 (198 Fed. xxvii, 115 C. C. A. xxvii), are substituted for cross-bills of the defendant Pan-American Transcontinental' Company and of defendant National Railway Construction Company against defendant Charles Bright and defendant South American Securities Company. The Securities Company only has appealed.
[13,14] As the counterclaims set up causes of action within the jurisdiction of the court as a court of equity, and within its jurisdiction as a federal court because of the citizenship of the parties, except in the case of the defendant Bright, they should not have been dis*875missed, but should Have been treated as original hills upon the dismissal of the original bill. Bates on Federal Equity Procedure, § 386; Markell v. Kasson (C. C.) 31 Fed. 104; Jesup v. Illinois Central R. R. Co. (C. C.) 43 Fed. Rep. 483; San Diego Flume Co. v. Souther, 90 Fed. 164, 32 C. C., A. 548. The defendant Bright, however, although a citizen of the United States, not being a citizen of any state, because he has been domiciled and engaged in business at Buenos Aires, Argentina, for many years, the counterclaims were properly dismissed as to him; the jurisdiction of the court being limited to controversies between citizens of different states.
[15] We agree with the court below that the contracts between the Securities Company and the Railway Company and the Construction Company should be canceled and rescinded, and all securities delivered thereunder to the Securities Company, in its possession or in possession of the receiver, be returned to those companies, respectively, and that the counterclaim of the Securities Company against John J. McKelvey and Alpheus H. Favour, individually and as co-partners, for $500,000 damages, should be dismissed, and that the amended bill of complaint be dismissed as to the defendants Frederick R. Bright, William F. Piper, Charles R. Dcmarest, Edward I. Thompson, Ralph H. McKelvey, and Warren G. Thompson. But the decree must be reversed because the original hill should have been dismissed, with costs to defendant Charles Bright against Vidal, and the counterclaims of the Railway Company and Construction Company against defendant Charles Bright should also have been dismissed, with cosía of both courts, payable one-hall by the Railway Company and one-half by the Construction Company, and the affirmative relief before mentioned on the counterclaims should have been given to the Railway Company and the Construction Company, with costs of both courts against the Securities Company, and, finally, the rights of persons not parties or persons not within the jurisdiction of the court should not have been determined.
Decree reversed, and the court below is directed to enter a decree in accordance with this opinion, making such provisions for payment of the fees of the special masler, receiver, and stenographers as to it shall seem proper.