286 F. 818 | 6th Cir. | 1923
This appeal presents, at the threshold, a question of conflict of jurisdiction between state and federal courts. Appellant Sturgeon purchased at bankruptcy sale certain real estate in Tuscarawas county, Ohio, subject to certain purported liens thereon, which included a mortgage given by the bankrupt to appellee Prescott and the predecessor of appellee Chicago Trust Company, as trustees. Sturgeon entered into possession of the premises by virtue of this purchase, and thereafter began in the court of common pleas for Tuscarawas county an action under the Ohio statute (G. C. § 11,901), the pertinent provision of which we quote in the margin,
“in an action which relates to or (the subject of which is real or personal property in this state, when the defendant has or claims a lien thereon, or an actual or contingent interest therein, or the relief demanded consists wholly or partly in excluding him from any interest therein, and such defendant is not a resident of this state, or is a foreign corporation.”
The mortgage trustees appeared, demurred, and answered, asserting the validity of the trust mortgage, also default in payment of interest and of a matured portion of the principal, declaring the entire of the principal due, and asking decree establishing the validity of the mortgage as a first mortgage lien on the premises, and for judgment against Sturgeon for the amount thereof, as well as for general relief. Certain beneficiaries under the mortgage were permitted to appear, and made answer, praying relief similar to that asked by the trustees.
During the pendency of this suit to quiet title, and after the appearance of the mortgage trustees therein but before answer .was filed, the trustees and beneficiaries began suit in the District Court below, in equity, for a foreclosure of the mortgage, making defendants (so far as here important) not only the bankrupt corporation and Sturgeon, but the appellant brick and tile company,
In Kline v. Burke Construction Co., 43 Sup. Ct. 79, 67 D. Ed. -, lately decided by the Supreme Court (and since the" instant case was brought into this court), the distinction between actions in personam and actions in rem, as regards the effect of prior assertion of jurisdiction by state or federal courts is plainly pointed out, viz. that the pendency in a federal court of an action in personam is not ground for abating a subsequent action in a state court, or vice versa — each court being at liberty to proceed to final judgment, such
In our opinion the state court acquired exclusive jurisdiction of the subject-matter of this litigation. While the rule that priority of jurisdiction over the res ¿ives exclusive jurisdiction is limited to actions which, speaking broadly, deal either actually or potentially with specific property or objects, yet the res, the subject-matter, is not necessarily a tangible thing; it may be merely a status, such as marriage, affected by a suit for divorce, or a proceeding to probate a will. The rule that the tribunal, state or federal, whose jurisdiction first attaches, holds it to the exclusion of the other until its duty is fully performed, and the jurisdiction involved is exhausted, applies'to enforcement of liens against specific property, including the foreclosure of mortgages, and is not limited to cases where property has been actually seized under judicial processes before the second suit is instituted in another court. The test is jurisdiction over the res, not possession of the property. B. & O. R. R. Co. v. Wabash Ry. Co. (C. C. A. 7) 119 Fed. at page 680, 57 C. C. A. 322, cited and. quoted from, with apparent approval, in Kline v. Burke Co., supra; Farmers’ Loan & Trust Co. v. Lake St. R. R. Co., 177 U. S. 51, 61, 20 Sup. Ct. 564, 44 L. Ed. 667; Roller v. Holly, 176 U. S. at page 405, 20 Sup. Ct. 410, 44 L. Ed. 520. Nor are proceedings in rem limited to suits directly against property. As said in Pennoyer v. Neff, 95 U. S. 714, 734 (24 L. Ed. 565):
“In a larger and more general sense, the terms [proceedings 4m rem] are applied to actions between parties, where the direct object is to reach and dispose of property owned by them, or of some interest therein.5 Such are cases * * * instituted to * * * foreclose a mortgage, or enforce a lien. So far as they affect property in the state, they are substantially proceedings in rem in the broader sense which we have mentioned.”
In respect of classification as to proceedings in rem we can see no valid distinction in principle, on the one hand, between a proceeding to enforce a lien or foreclose a mortgage, and, on the other hand, to remove a lien or set aside a mortgage. Statutes of the latter character, equally with those of the former, act directly upon the res, the status of the title. Nor do we find any distinction upon authority. In Roller v. Holly, supra, a suit to enforce a vendor’s lien, under a statute providing for substituted service on nonresident defendants, was impliedly held to be in rem. It was there said (176 U. S. 405, 20 Sup. Ct. 412, 44 L. Ed. 520) that the substance of certain decisions of the Supreme Court therein discussed is that “if the plaintiff be in possession, or have a lien upon land within a certain state, he may institute proceedings against nonresidents to foreclose such lien or to remove a cloud from his title to the land, and may call them in by personal service outside the jurisdiction of the court, or by publication, if this method be sanctioned by the local law.” As said in Boswell’s Lessee v. Otis, 9 How. 348 (13 L. Ed. 164):
“A bill for the specific execution of a contract to convey real estate is not strictly a proceeding in rem, in ordinary cases; but where such a procedure is authorized by statute, on publication vdihont personal service of process, it is, substantially, of that character.”
In Parker v. Overman (18 How. 137, 140, 15 L. Ed. 318), a proceeding under a statutory provision for service by publication, characterized by the court as “to quiet the title” and as “in substance a bill of peace,” was likened to a proceeding in rem.
The in rem nature of a decree rendered under the Ohio practice is further indicated by G. C. Ohio, §■ 11590, declaring that:
“When the party against whom a judgment for a conveyance, release, or acquittance is rendered, does not comply therewith by the time appointed, such judgment shall have the same operation and effect, and be as available as if the conveyance, release, or acquittance had been executed conformably thereto.” ,
The decree of the court is thus made a muniment of title, as distinguished from a decree merely operating upon the person of a defendant, when the property is in another jurisdiction.
Our conclusion that the state court had exclusive jurisdiction to determine the validity of the mortgage renders a discussion of the merits of the controversy not only unnecessary, but improper.
The judgment of the District Court is reversed, and the record remanded to that court, with directions to take further proceedings therein not inconsistent, with this opinion.
An action may be brought by a person in possession of real property, by himself or tenant, against any person who claims an estate or interest therein, adverse to him, for the purpose of determining such adverse estate or interest.
The liens other than .the mortgage lien are not involved here.
The brick and tile company was substituted as petitioner in the suit in the state court in Sturgeon’s stead, apparently after commencement of suit in the federal court.
See, also, Ponzi v. Fessenden, 258 U. S. at page 261, 42 Sup. Ct 309, 66 L. Ed. -, also cited in Kline v. Burke Co. See, also, Palmer v. Texas, 212 U. S. 118, 125, 29 Sup. Ct. 230, 53 L. Ed. 435.
All italics in this opinion are ours.
As expressed in Pennoyer v. Neff, supra, at page 473: “Where the action is in the nature of a proceeding in rem.”
The instant case falls directly within the Ohio statute. G. O. § 11292 (9).
In the instant ease it is not material whether the state court proceeding was in rem, or of the nature of a proceeding in rem. Both terms are equally opposed to a proceeding in personam, requiring personal service of notice.