Messrs. Marion Smith, John D. Little, Arthur G. Powell, and Max F. Goldstein, all of Atlanta, Ga., for petitioner. [267 U.S. 276, 277] Mr. Arthur Heyman, of Atlanta, Ga., for respondents.
Mr. Justice McREYNOLDS delivered the opinion of the Court.
This cause arises from an intervention petition filed by respondent Hozier in a proceeding to administer the assets of Imbrie & Co., a partnership, pending in the United States District Court, Northern District of Georgia. The following statement from the opinion of that court (287 F. 158, 159) sufficiently indicates the material issues:
The trial court held that it had jurisdiction to entertain the intervention petition as a dependent controversy, and decreed:
The Circuit Court of Appeals affirmed this judgment. The cause is here by certiorari. It is insisted that the trial court erred (1) in assuming jurisdiction of the intervention petition; and (2) in holding the bank liable for the amount of the deposited check.
We are of opinion that in no proper sense was the petition dependent or ancillary to the cause instituted for the purpose of administering the assets of Imbrie & Co. Consequently, the trial court could not entertain it.
The general rule is that, when a federal court has properly acquired jurisdiction over a cause, it may entertain, by intervention, dependent or ancillary controversies; but no controversy can be regarded as dependent or ancillary unless it has direct relation to property or assets actually or constructively drawn into the court's possession or control by the principal suit. Hoffman v. McClelland, 264 U.S. 552, 558 , 44 S. Ct. 407, and authorities there cited. And see Simkins' Federal Practice, pp. 740, 741. All parties seem to recognize this doctrine; they differ concerning its application to the facts presented by the present record.
The proceeding under consideration cannot properly be called a suit by a receiver, on authority of the appointing court, to collect assets or to defend property rights. It was begun to recover property, claimed by a customer of the insolvent firm, which had passed into the hands of a third person.
Hozier might have proceeded against the bank by an original proceeding and demanded adjudication of his claim to the alleged trust fund-pursued thus something which he insisted belonged to him and was unjustly withheld by the bank. This course was successfully taken in Union Stockyards Bank v. Gillespie, 137 U.S. 411 , 11 S. Ct. 118.
As between Imbrie & Co., or the receivers appointed to administer their assets, and the bank, the [267 U.S. 276, 281] latter had the superior claim to the deposit or credit here involved; whether it could be required to account to the customer as for his money was a question between them. Bank of Metropolis v. New England Bank, 1 How. 234; 6 How. 212; Wilson & Co. v. Smith, 3 How. 763; National Bank v. Insurance Co., 104 U.S. 54 ; Union Stockyards Bank v. Gillespie, supra. There were no funds in the receivers' possession and none subject to their demand as to which Hozier asserted any right; his claim was against something in the bank's possession and beyond the receivers' reach. His petition sought to compel them to litigate with the bank for his sole interest and without possibility of benefit to the estate. As shown by the decree quoted above, the expected fruit of the litigation was for petitioner alone. He had no right to bring the bank, which for jurisdictional purposes was to be deemed a citizen of Georgia (Judicial Code, 24, subd. 16 [Comp. St. 991]), into the federal court, or to interfere with the affairs of the estate by injecting this controversy concerning which the receivers had no material interest-wherein the estate might lose much, but could gain nothing.
The decree is reversed. The cause will be remanded to the District Court. The costs in all the courts will be taxed against the intervener, respondent here.