25 F. 737 | U.S. Cir. Ct. | 1885
This bill was filed originally in the court of common pleas of Franklin county to foreclose a mortgage. That court is the one of general jurisdiction in that county for such purposes under the laws of the state of Ohio. A demurrer was filed denying its jurisdiction, because it appeared by the bill that subsequently to the mortgage the mortgagor had made a general assignment of all his property for the benefit of his creditors; that the assignee had duly filed the assignment, given bond, and qualified as required by law in the probate court of the proper county. Pending that demurrer the cause was removed to this court by the plaintiff, where the demurrer upon the pleadings as they then stood was overruled by our Brother Sage, and the parties were required to answer. The answer of the assignee shows that he was proceeding with all reasonable speed to administer his trust according to the requirements of the law in that behalf. The case is set down for hearing on the bill and answer.
There is some force in the argument that when the parties stand face to face in a court of competent jurisdiction to settle the controversy, it is not of material importance to inquire how they got there, nor whether some othér court in another dominion would have had the power to try the case, and that our own jurisdiction over the subject-matter is that which concerns us, and not that of the court of common pleas. There is also force in the position that congress intended, by the removal acts, as well as by the judiciary act conferring original jurisdiction over controversies between citizens of different states, to put in force in the most plenary manner the judicial power of the United States over such controversies, and to transfer them bodily at the request of either party into its own courts. But this line of argument overlooks certain essential features of every jurisprudence, and subordinates to a general principle of undoubted soundness important rights of the parties connected with the details of every litigation concerning their controversies. Not only must there be a controversy, but as well always a form of procedure of some kind, possessing all the nécessary elements of a “suit” or “case” in court, the most important of which is, no doubt, that there shall be a tribunal authorized to issue that indispensable notice which we call a writ or process, to bring the parties together in the court; and this must be not only sufficient in form and in fact, but in legal and technical effect,'to constitute a “suit” or “case,” which can only be when the tribunal undertaking the initiatory steps is duly authorized to do that thing and proceed with the matter of adjudging between the parties, either for itself or by transferring that function to some other tribunal, likewise duly authorized to proceed to judgment. Whatever may be said as to the proper definition of the term “suit” or “case” in other respects, in this process of inaugurating the procedure by which the controversy is to be judicially determined there must be, ex necessitate rei, a court having power to set in motion the machinery of the law, and this we call its jurisdiction over the subject-matter; while that effectual service of its notice which is legally potential to
Now, if a citizen of Pennsylvania, holding a promissory note made by a citizen of Ohio, on which he desired to bring suit, should go into a state court of exclusive criminal jurisdiction, file his complaint, sue out his writ of summons, have it served in the usual way, and then remove the controversy into this court, could it be pretended that we should retain the jurisdiction on the grounds urged here ? I think not. All the forms of a suit would exist in appearance; a court, process executed, and pleadings adapted to the purpose, but there would be no “suit” in court any more than if the proceeding had been commenced in a moot court, such as are organized in law-schools to teach practice. I do not mean to say that we measure our jurisdiction wholly by that of the state court, and.that nothing can be adjudged here which could not have been adjudged there; for cases can be well imagined where this ruling should be subject to qualification, but not in its essential requirements. It may be that over the controversy embodied in the suit we should have here a' fuller power of judgment than was possessed by the state court; or, on the other hand, that court may have had a more enlarged power than has been given to ns; and it maybe that we should, as the case required, extend or restrict our adjudication, as by our own rule of judgment we should be compelled to do; but, still, the fundamental principle would co-exist with that state of circumstances, and we should have “a suit” pending in the state court in some other sense than that of mere form, and which could be removed here in some other sense than that of having a controversy over which our own jurisdiction was plenary, although the state court could have had none at all. The opinion I wish to express is confined to this: that wherever there is a total absence of jurisdiction over the subject-matter in the state court, so that it had no power to entertain the suit in which the controversy was sought to be litigated in its then existing or any other form, there can be no jurisdiction in the federal court to entertain it on removal, although in some other form it would have plenary jurisdiction over the case made between the parties. This is not a mere technical necessity of the situation, but a matter of substantial right, which demands that before a defendant can be required to submit his case to any court the legal methods of procedure appointed by law
The case of Kelly v. Virginia Ins. Co., 3 Hughes, 449, does not establish a contrary doctrine, however broad its expressions may be. There the question was one of mere locality of jurisdiction, or, to speak perhaps without entire accuracy, of venue only. The federal court had jurisdiction of the particular territory in which the suit was brought, while the corporation court from which it was removed did not have jurisdiction of the place where the defendant was located, and the plea was that the state court did not have jurisdiction because neither the plaintiff nor defendant resided in the city, nor did the cause of action arise there. Perhaps this was an entire absence of jurisdiction over the subject-matter and would invoke the ruling 1 make; but I doubt if the court intended in that case to go as far as counsel would press it here. Section 6 of the act of 1875, above cited, provides that all suits removed shall proceed in this court as if the suit had been originally commenced here; but this presupposes “a suit” in the sense I have defined it, and I think the court understood the Virginia case to be such a suit, defective only as to the locality, which defect had in itself no application to the federal court. It is quite another thing to apply that principle to an entire absence of jurisdiction of the subject-matter of the litigation, and I do not believe that court would so apply it. It would be a mere literalism to construe that section and the case there decided as counsel here construe it, and would render nugatory the important right of the defendant which I have endeavored to point out as lying at the basé of this contention. Neither does the fact that the federal court may in some cases, through a removal, acquire a jurisdiction it did not originally possess, strengthen the plaintiff’s contention, but rather the contrary; for it is the jurisdiction of the state court at last that supports, in such cases, the federal jurisdiction, and very much in the same way I have indicated that our jurisdiction in this case must be supported. Bushnell v. Kennedy, 9 Wall. 387; Gaines v. Fuentes, 92 U. S. 10; Kern v. Huidekoper, 103 U. S. 485; Claflin v. Com. Ins. Co., 110 U. S. 81; S. G. 3 Sup. Ct. Rep. 507; Southworth v. Adams, 4 Fed. Rep. 1; Barney v. Globe Bank, 5 Blatchf. 107.
Again, under the old removal act, where the defendant alone could remove, it was held that after he appeared- for that purpose, he appeared for all purposes, and could no longer object to the jurisdiction. But I think in every case it will be found that this was only as to that class of objections which relates to the service of process by
“If the plaintiff be a non-resident, as the answer asserts, the action would have failed in the state court for want of jurisdiction, and must therefore fail here, notwithstanding the plaintiff, if a non-resident, may also bo an alien, and the action for that reason one which this court is competent to entertain. For, it is tho cause instituted in the state court which is to be determined by this court, and the plaintiff’s residence, if fatal to the action in case it had remained in the state court, must he fatal here.”
And the court retained the case for the trial of that issue. Also the word “suit” in the removal act is construed by the court very much as I construe it here, in Re Iowa, etc., Construction Co., 2 McCrary,
' This conclusion makes necessary a determination in this case of the far more troublesome question whether or not the court of common pleas had any jurisdiction of the subject-matter of this suit. The argument that it had general jurisdiction of such suits does not meet' the exigencies of the case above suggested; for that court must have had jurisdiction of the subject-matter of this particular suit, and under its own circumstances. If its general powers have been restricted by legislative act so that it was deprived of the jurisdiction of the subject-matter of this controversy, the case is the same in principle as if- the general jurisdiction did not exist, so far as this suit is concerned. The existence of that general jurisdiction is a strong-argument against any legislative intent to take it away in cases like this; but, within itself, it cannot prevail to support this suit if the legislative intent be manifest. , Independently, on my own judgment, I should not hesitate to hold that the legislature did not intend by these insolvent assignment laws to deprive creditors of their ordinary remedies against their debtors, but only to provide through the probate court a speedy method for the administration of that trust created by the assignment, auxiliary to the ordinary powers of such trustees. Rev. St. Ohio, §§ 6335 et seq.
In the first place, there is nothing in the act which in express terms says that creditors shall be so deprived, and I do not understand that it is claimed otherwise than by implication, and this upon the application of the familiar rule that a court with concurrent jurisdiction is ousted if, by a proper proceeding, another court of like jurisdiction first acquires control of the suit or subject-matter.
■' 'In the next place, there is nothing in the act which seems to be aimed at the ordinary remedies of creditors in the courts having general jurisdiction to enforce their rights; there are no statutory injunctions provided for, no especial mode of bringing in the creditors to inaugurate in that court their respective suits, no methods of procedure or The like', and no machinery provided as a substitute for that ordinarily ‘belonging to them. All this is left also to implication. It is -true, a ■publication in a newspaper of the county is provided for; but that is
That general purpose, in the features we are now considering, I should say is one of regulation by the court, rather than one of,adjudication, as upon a plenary creditors’ bill in equity in a court possessing the ample powers of such courts, with all parties in interest before it and engaged in a general settlement of any and all of their rights, respectively. This probate court lays hold of the assignment and of the assignee, and regulates, supervises, and controls him in the administration of the trust wherewith he is charged, and, incidentally as if were, 'deals with all questions and persons who come within the operation of that administration in the fullest manner as long, but only so long, as the assignee acts in harmony with the parties interested and no adverse or hostile contention arises. For which general purpose the court may examine the debtor or other persons, make orders and decrees of control in the premises, and generally direct and regulate the administration of the trust under the assignment. And this power of regulation and control is exclusive in that court, except where the assignee is vested with a discretion to go elsewhere. But the moment an adverse, formal, and plenary adjudication at law or in equity is required, even as between the assignee and “claimants,” the statute especially directs “suit” to be brought (section 6352) to settle it, which precludes the idea that the proceeding in the probate court is a “suit” for that purpose. But I think the statute shows on its face that the legislature confined itself to making a provision for the auxiliary regulation of the assignee and the administration of his trust, and did not by implication intend to sweep out of existence all remedies by or against the creditors in other courts. ,yIt left them entirely free to pursue any remedy at law or in equity that they might
But we must not fall into a confusion of ideas here, and must carefully separate this question of the jurisdiction of the courts over the remedies of the creditors fr.om another and distinct branch of the statute, namely, its effect upon the liens, titles, and interests of the creditors in the property involved. That is an entirely different matter, and is material here to show, not only the harmony of the construction that has been suggested, but also the character of the decree to which the plaintiff may be entitled if the jurisdiction be maintained, —a matter that has not been at all discussed at the bar in this case. This distinction has been pointed out by the late Judge Willson in reference to the.effect of these very Ohio statutes on our federal jurisprudence, and likewise acted upon by our Brother Welker, of the Northern district of Ohio. Burt v. Keyes, 1 Flip. 61; Clafflin v. Robbins, Id. 603. If the creditor who brings his suit at law against the debtor issue an execution on the judgment, it would be an independent question as to the relative rights of himself as a judgment creditor and the assignee over the property, as any one can readily see; and it may be necessary for either to resort to the courts of law in suits of trespass, trover, detinue, and the like, or to the court of equity for injunctions or other equitable relief to protect the respective rights of either. So, if the creditor has a mortgage, it may be also necessary to resort to such suits to test the relative rights of the creditor and the assignee; but in all those cases this statute would operate to show that the legislature had provided a means by which the assignee may have' sold, or may, pending any suit, proceed to sell, the property in controversy, unless restrained in a proper case by the
■ But it seems to me plain that whatever the courts of general cognizance may or may not adjudge in a particular ease as to all this •mass of rights arising out of the assignment and other contracts of the parties, this in no way affects the question whether, proprio vigore, this statute transfers the exclusive jurisdiction of all controversies over that mass of contract rights to the probate court, and •that Jhat question depends on the language of the act and its necessary implications, and not in any sense on the effect of the assignment upon the rights of the creditors. If, for example, a creditor should sue the assignee for a conversion arising out of a sale made 'under the powers conferred by this statute, it is not a question of the jurisdiction of the probate court, exclusive or concurrent, but one concerning the title of the assignee, and his power over the property under the assignment, as regulated by this statute. If that power be not (exceeded, but properly exercised, the assignee is protected, not because the probate 'court has jurisdiction to direct the sale, concurrent ■or exclusive,—certainly not because no other court can acquire jurisdiction over the property,—but simply for the reason that, by virtue 'of the assignment and sale made under this statute, the assignee has (passed the title properly discharged of the liens or claims of creditors,
The case of Dwyer v. Garlough, 31 Ohio St. 158, was a suit to foreclose a mortgage in the equity court, and the very contention made here by defendants’ counsel was made there, and the court intimates, undoubtedly, that the point was well taken but for the fact that in that case extraordinary relief was required to foreclose the wife’s dower, which the probate court then had no power to do, but has by subsequent legislation acquired, no doubt, because of the suggestions of that case; and it is argued here that this amendatory legislation is a legislative construction in favor of the principle intimated by the supreme court and so earnestly urged at this bar. If we were satisfied that the supreme court of Ohio intended to so construe this statute, we should unhesitatingly yield any judgment of our own with great cheerfulness to theirs; but I am informed by counsel here and others at the bar that neither the other state courts, nor the profession generally, have any uniform opinion on this subject, and that the practice and rulings are in much conflict because the point is not considered as at all settled by either of these two adjudications, which are the only cases pertinent to the question. Technically, the last cited case is no more than the other an adjudication of the point; for it was held that the jurisdiction of the common pleas had not been ousted as long
The doctrine of legislative construction is a delicate one. It is an argument frequently of great force, as here, and often a controlling principle in the construction of statutes, not- because the legislature has any power even in terms to declare the interpretation of a previous statute, but because, if the courts have called attention to a defect or an omission, and it be supplied by the legislature, there is a fact in the history of the legislation from which the courts may reasonably infer the intent of the law-making power, which is, after all, the ultimate object of all construction. Potter’s Dwar. St. 68, and notes; Sedg. St. & Const. Law, 252. But the legislature no more than the courts should be held to have adopted either obiter dicta of judge’s opinions or their reasoning not within that designation, nor 'to have legislated with reference thereto, without at least more evidence than exists from the mere inferences drawn from the relation of the two events in the matter of time. I do not much doubt that the decision under consideration called attention to the want of power in the probate court -to foreclose a wife’s dower in the matter of the 'administration of assignments,—a power that was as much needed to complete the system adopted on the construction I have suggested, as it would be on the construction that is urged by the defendants here,—but it would be pressing the force of the fact beyond its legitimate effect to hold that it was the intention of the legislature, by conferring that power, to adopt the suggestion that with that power the jurisdiction of the probate court would become exclusive, even 'though the suggestion be a part of the judicial opinion calling attention to the omission. Altogether, and in a word, I am not at all satisfied that the legislature or the supreme court of Ohio intended, either by the amendatory legislation or these two decisions, to establish the probate court into a tribunal of such enormous jurisdiction as that insisted on by the defendants’ counsel, and think it more reasonable to construe the insolvent laws as establishing a special tribunal of regulation for the administration of the assignee’s trust, and
It is a familiar feature in the history of our late bankruptcy acts that in the beginning precisely the same enormous and exclusive jurisdiction was persistently claimed by the bankruptcy courts, was as persistently denied, and finally settled against the claim of jurisdiction ; the supreme court having “steadily sot its face against that view.” Eyster v. Gaff, 91 U. S. 521, 525. The claim was far more reasonable under the bankrupt law than under these insolvent laws of- Ohio, as will be seen by a critical comparison of the two acts, and I have only applied the reasoning of our courts on the one to the other. So, too, it is a general rule of law that in all these cases of special tribunals their jurisdiction is strictly confined and never excludes the courts of ordinary jurisdiction, except upon the clearest direction of the legislative will. Comegys v. Vasse, 1 Pet. 193, 212; Garland v. Wynn, 20 How. 6, 8; Judson v. Corcoran, 17 How. 612, 614; Frevall v. Bache, 14 Pet. 95, 97; Lindsey v. Hawes, 2 Black, 554, 558.
I have reached my conclusions with great diffidence, and, being a stranger to the laws of Ohio, have reserved my own opinion until it could be submitted to the better judgment of our Brother Sage, who heard these questions on demurrer, and who, I feel relieved to say, concurs with me in these conclusions. Let the plaintiff take a decree, with leave to apply to the court for the particulars thefeof if the parties cannot agree, inasmuch as the questions which may arise on that subject have not been sufficiently argued to enable us to determine how far these insolvency statutes shall govern the terms of the decree, if at all.