Opinion · Court of Appeals for the Second Circuit

Steele v. Guaranty Trust Co. of New York

Steele v. Guar. Tr. Co. of N.Y., 164 F.2d 387 (2d Cir. 1947)

Type
Opinion
Court
Court of Appeals for the Second Circuit
Jurisdiction
Federal
Date
1947-12-08
Topic
bankruptcy

FRANK, Circuit Judge. On the former appeal, we said (143 F.2d at page 528) that, if non-accepting noteholders, other than the original plaintiff, Mrs. York, intervened, the action could be maintained as a class suit under Rule 23(a)(3), Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c. However, in Hackner v. Guaranty Trust Co., 2 Cir., 117 F.2d 95, we had held that a proceeding under 23 (a) (3) is, in effect, but a congeries of separate suits so that each claimant must, as to his own claim, meet the jurisdictional requirements.

Citator

UpLaw has not yet analyzed Steele v. Guaranty Trust Co. of New York. The absence of a flag is not a finding that it is good law.

Authority status
pending
Cited by
19 opinions
STEELE v. GUARANTY TRUST CO. OF NEW YORK,164 F.2d 387(2nd Cir. 1947)
STEELE et al. v. GUARANTY TRUST CO. OF NEW YORK.
No. 34, Docket 20680.
Circuit Court of Appeals, Second Circuit.
December 8, 1947.
Page 388
Appeal from the District Court of the United States for the Southern District of New York.

Action by Emma W. Steele and others against the Guaranty Trust Company of New York for breach of duties as trustee and for an accounting. From a judgment of the United States District Court for the Southern District of New York dismissing the action on the merits, plaintiffs appeal.

Reversed and remanded with directions to dismiss for want of jurisdiction.

The decision of this court on the previous appeal, York v. Guaranty Trust Company, 2 Cir.,143 F.2d 503, was reversed in part by the Supreme Court in York v. Guaranty Trust Company,326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079, 160 A.L.R. 1231. After the filing of the mandate in the district court, an amended complaint was filed, naming as parties plaintiff, in addition to the original plaintiff, Mrs. York, the following: Emma W. Steele, resident of the State of Illinois, owner of $2,000 of the notes; Elva Lamberson, resident of the State of Virginia, owner of one $1,000 note; Gus Stern, resident of the State of Florida, owner of $3,000 of the notes; Leslie M. O'Connor, Secretary and Treasurer of "Baseball," a voluntary association created January 12, 1921, under a written agreement of that date, resident of Illinois, owner of $33,000 of the notes; the First National Bank of Stillwater, Oklahoma, owner of $2,000 of the notes. Defendant moved for summary judgment, as did plaintiffs. The district court denied plaintiffs' motion for summary judgment and granted summary judgment against the plaintiffs, dismissing the suit on the merits. The plaintiffs, other than Mrs. York, have appealed.
Shulman, Shulman Abrams, of Chicago, Ill., and Bennett I. Schlessel, of New York City (Meyer Abrams, of Chicago, Ill., of counsel), for appellants.

Davis, Polk, Wardwell, Sunderland Kiendl, of New York City (Ralph M. Carson and Francis W. Phillips, both of New York City, of counsel), for appellee.
Before L. HAND, AUGUSTUS N. HAND and FRANK, Circuit Judges.
FRANK, Circuit Judge.
On the former appeal, we said (143 F.2d at page 528) that, if non-accepting noteholders, other than the original plaintiff, Mrs. York, intervened, the action could be maintained as a class suit under Rule 23(a)(3), Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c. However, in Hackner v. Guaranty Trust Co., 2 Cir.,117 F.2d 95, we had held that a proceeding under 23(a)(3) is, in effect, but a congeries of separate suits so that each claimant must, as to his own claim, meet the jurisdictional requirements.

The district court lacked jurisdiction as to Stern, Lamberson, Steele and the Bank. This appears from the following: Each has a claim not based upon loss of any part of a trust fund but solely for a loss consisting of the reduction of his recovery from the debtor, due to defendant's alleged wrong. The face amount of the notes and coupons held by each plaintiff is not the measure of his claim, but merely fixes its maximum. The loss, as shown in our former opinion, could not have exceeded the sum of (1) about 38% of the face of his notes,1plus (2) a proportionate amount of what might have been recovered on the open account claim against the debtor's subsidiary,2plus (3) perhaps interest, as damages, on the aggregate of the first two items.3On this record, this total would surely not exceed 100% of the face of the notes. As no one of the four plaintiffs above-named held more than $3,000 face amount of notes, none showed the requisite jurisdictional amount.

The other plaintiff, "Baseball," is an unincorporated association. An undisputed affidavit, forming part of the motion papers, shows that two members of this association are corporations organized under the laws of New York. Defendant is also such a New York corporation. There was therefore an absence, with respect to this plaintiff, of the needed diversity ofPage 389citizenship.4Consequently, the district court lacked jurisdiction of this claim also.

Reversed and remanded with directions to dismiss for lack of jurisdiction as to the plaintiffs other than Mrs. York.
  1. See 143 F.2d at page 510, note 6a. ↩
  2. See 143 F.2d at page 518, first full paragraph. ↩
  3. See 143 F.2d at page 518, note 19 and cases cited. ↩
  4. Levering Garrigues Co. v. Morris, 2 Cir.,61 F.2d 115, 116, 117, affirmed on other grounds289 U.S. 103, 53 S.Ct. 549, 77 L.Ed. 1062; Rosendale v. Phillips, 2 Cir., 87 F.2d 454; Spencer v. Patey, 2 Cir., 243 F. 555. ↩