44 App. D.C. 408 | D.C. Cir. | 1916
delivered the opinion of the Court:
This is a special appeal, and involves an interlocutory order restraining the appellants, Hyattsville Building Association, of Hyattsville, Maryland, and C. Erancis Owens, from selling in Maryland, under the terms of their mortgage, Maryland real estate, for failure to fulfil conditions of the mortgage, the appellee, Harry Y. Bouic, being the mortgagor.
After the alleged default of the appellee, the appellants instituted in the circuit court for Montgomery county, Maryland, a statutory proceeding for the foreclosure of the mortgage, and advertised the property for sale in accordance with the statutes of Maryland. Before the sale could take place, appellee filed his bill in the court below, and obtained a temporary restraining order, which, upon a later hearing, was continued, and this appeal granted. The view we take of the case renders it unnecessary to set forth the averments of the bill.
Sec. 265 of the Judicial Code of the United States [36 Stat. at L. 1162, chap. 231, Comp. Stat. 1913, § 1242] ordains that “the writ of injunction shall not be granted by any court of the United States to stay proceedings in any court of a State, except in cases where such injunction may be authorized by any law relating-to proceedings in bankruptcy.” The. supreme court of
The question remains whether what the court restrained was a “proceeding” in a court of Maryland. Appellants were moving under article 66 of volume 2 of the Maryland Code, which, it is conceded, marks the procedure to be followed in foreclosing such a mortgage. Sec. 6 of article 66 authorizes the insertion, in a mortgage, of a power of sale such as is to be found in the present mortgage. Under sec. 7, when such a sale is to be made, the person so authorized is required to give bond to the State, in such penalty and with such security “'as shall be approved by the judge or clerk of a court of equity of the city or county in which the mortgaged premises lie, * * * to abide by and fulfil any order or decree which shall be made by any court of equity in relation to the sale of such mortgaged property or the proceeds thereof.” Sec. 8 provides for the giving of notice. Sec. 9 reads as follows: “All such sales shall be reported under oath to the court having chancery jurisdiction where the sale is made, and there shall be the same proceedings on such report as if the same were made by a trustee under a decree of said court, and the court shall have full power to hear and determine
We now will turn to a decision of the court of appeals of Maryland interpreting this statute. In Albert v. Hamilton, 76 Md. 304, 25 Atl. 341, a sale of land under a mortgage had taken place, and in due course had been confirmed by the court, agreeably to the provisions of the statute. Subsequently a bill in equity was filed in which it was sought to challenge the validity of the mortgage. The court ruled that this question might have been raised by the mortgagor in objecting to the ratification of the sale, and that not having been raised at that time, the bill in equity could not be sustained. In the course of its opinion the court said: “The purpose of this legislation was to provide a more expeditious and less expensive method of enforcing mortgages than the former proceeding by formal bill in equity, but not, by any means, to impair or defeat the right of the mortgagor to be heard in defense of his property. And in enabling , him to make any objections against a sale, which would take away his title, the statute has preserved to him his unquestionable right to show that the mortgage was invalid, and therefore did not justify a sale of his property. Under a formal bill in equity, the court in a proper case decrees that a sale shall be made, and appoints a trustee to execute its decree; and after the sale is made, it hears objections to the mode in which it has been conducted; but in the proceedings under the statute, the question of sale comes before the court for the first time when the sale is reported for ratification, and then all objections against the sale are to.be heard and determined. The difference is that in the one case the propriety of making
Generally speaking, the term “proceeding” means a prescribed course of action for enforcing a legal right, and hence it necessarily embraces the requisite steps by which judicial action is invoked. It is a very comprehensive term. State ex rel. Carlton v. District Ct. 33 Mont. 138, 82 Pac. 789, 8 Ann. Cas. 752; Kittridge v. Kinne, 80 Mich. 200, 44 N. W. 1051; United States v. Collins, 4 Blatchf. 142, Fed. Cas. No. 14,834. Moreover, the purpose of sec. 265 of the Judicial Code [36 Stat. at L. 1162, chap. 231, Comp. Stat. 1913, § 1242], here involved, being to prevent unseemly conflict between State and Federal courts, the statute should be given such an interpretation as will effectuate its obvious purpose. American Asso. v. Hurst, 7 C. C. A. 598, 16 U. S. App. 325, 59 Fed. 1; American Shipbuilding Co. v. Whitney, 190 Fed. 109.
Appellants had taken the initial steps provided by the Maryland statutes for the foreclosure of their mortgage, thereby setting in motion the machinery of the law in that jurisdiction. Inasmuch as the statute requires report of a sale to a court, it is not material that proceedings ar*e ex parte up to that point. The court then has sole jurisdiction to determine the rights of the parties, and affirmative action by the court is necessary to give validity to the sale. Viewing the statute as a whole, in the light of its interpretation by the court of appeals of Maryland, we are unable to escape the conclusion that proceedings thereunder may not be stayed by a court of the United States except under the bankruptcy act. It follows that the judgment must be reversed, with costs, and the cause remanded, with directions to dismiss the bill. lieversed and remanded.
A petition for the allowance of an appeal to the Supreme Court of the United States, or the issuance of a writ of error to remove the cause to that Court was denied February 24, 1916.
