On December 23, 1930, pursuant to the. provisions of section 56 of the Judicial Code (28 USCA § 117)> L. R. Powell, Jr., and E. W. Smith were appointed receivers of the properties and franchises of Seaboard Air Line Railway Company by the District Court of the United States for the Eastern District of Virginia. On the same date in ancillary proceedings in the Fifth Judicial Circuit, the same receivers were appointed for said properties and franchises by the District Court of the United States for the Southern District of Florida. No other ancillary proceedings were had or applied for, but under the provisions of the act, certified copies of the hill and order were filed in every federal district in which the railway company owned fixed properties, including the Western .District of South Carolina. Like certified copies of subsequent proceedings and orders in the cause have been from time to time filed with the clerk of this court, in accordance with the provisions of the act. Acting under authority of the order of their appointment, the said receivers entered into possession of all properties of the railway company lying within the Fourth Judicial Circuit, including the properties within the Western District of South Carolina, through which the lines of said railway extend, and have ever since been and are now operating the entire system of the said railway company.
Some time prior to the institution of the receivership proceedings, the "petitioner, E. B. Link, in a suit at law had obtained a judgment against the railway company in the court of common pleas for Abbeville county, S. C., within this district; an appeal had been had to the Supreme Court of the state, which affirmed the judgment, 159 S. C. 538,
The statute under which the receivers were appointed was enacted on March 3, 1911, 36 Stat. 1102, Judicial Code, § 56, 28 USCA § 117. The material portions of said act provide as follows: “Where in any suit in which a receiver shall be appointed the land or other property of a fixed character, the subject of the suit, lies within different States in the same judicial circuit, the receiver so appointed shall * * * immediately be vested with full jurisdiction and control over all the property, the subject of the suit, lying or being within such circuit;
Prior to the passage of this aet and subsequent to the elimination of the Circuit Courts of: the United States, objections had been voiced to the law as it then stood because of the territorial limitations upon the powers of district judges in the appointment of receivers for railroads whose systems extended over more than one district. The purpose of the legislation was thus stated by Representative Moon of Pennsylvania, as follows: “It applies only to the appointment of a receiver to take physical possession of property lying in a territory covering- more than one district. In other words, it is to core tho only objection that I have ever heard urged against the elimination of the circuit courts. It applies to a case where a receiver is to he appointed by a district judge covering property that runs across an entire circuit and includes a great number of districts, and it provides that tho action of the district judge sitting in one circumscribed district shall be conclusive in the appointment of a receiver only to preserve the status quo, and that shall he subject to confirmation of the circuit court of appeals or a circuit judge within thirty days.” See note 28 USCA § 117, pp. 140, 141.
In construing the amendment it is important to bear in mind the purpose of its enactment and to consider whether the language used is appropriate to carry out such purpose. Where receivers are appointed pursuant to this aet, they are immediately vested with full jurisdiction and control over all the property, the subject of the suit, lying- or being within such circuit. No general limitations are placed upon the authority and jurisdiction of the district judge over any of the. property within the circuit, other than the right of a circuit judge to disapprove said order within thirty days, and the further requirement; that a certified copy of the hill and order of appointment shall be filed and entered in the District Court for each district within the circuit within ten days. The concluding sentence of this section does not, in my judgment, in any way limit the power of the district judge granting the receivership, but on the other hand is intended to enlarge his jurisdiction so as to permit him to control the issue of process in other districts within the circuit than his own. In such cases, all that is required is that the orders affecting such properly shall be entered of record in each district in which the property affected may lie or be. Prior to the passage of this act each district judge was limited in jurisdiction, both as to persons and as to property, to such as resided or was embraced in his district. The effect of the act was to enlarge his jurisdiction and make it complete over not only the receivers who mig*ht or might not reside in his district but who might reside in the circuit, but also over the res or property lying within other dis tricts within the circuit as well as his own.
It must be remembered that the creation of judicial districts and tho extent of the authority and jurisdiction of the district judges are both subject entirely to the control of Congress, and within constitutional limitations may bo enlarged or curtailed as Congress may determine. Congress has created the District Courts as courts in bankruptcy. Section 70b of the Bankruptcy Act, 11 USCA § 110 (b), provides that all real and persona] property belonging to bankrupt estates shall be appraised by three- disinterested appraisers, who shall be appointed by, and report to, the court; and that real and personal property shall be sold subject to the approval of the court. Construing this provision, the Supreme Court, in the case of Robertson v. Howard,
The general proposition is well settled that in the absence of special legislative authority, a receiver’s right to sue in a foreign jurisdiction is not recognized upon principles of comity, as every jurisdiction in which it is sought by means of a receivership to subject the property to the control of the court, has the right and power to determine for .itself who the receiver shall be and to control the distribution of the funds realized within its own jurisdiction. Great Western Mining & Manufacturing Co. v. Harris,
Counsel herein have brought to my attention only one ease in which is discussed the effect of filing copies of the bill and order in each district within the circuit under the act in question. This is the ease of Guaranty Trust Co. of New York v. Chicago, M. & St. P. R. Co. (D. C.)
It must be borne in mind that the exact question at issue here is not the determination of whether the petitioner is entitled to sue the receivers or to establish some right or to procure the adjudication of a claim against the property to be administered. In that respect, his rights had been finally determined by judicial proceedings before the receivership was granted. The question here extends further; that is, to the actual administration of the receivership properties, the adjustment of priorities among claimants, and the manner in which the funds in the hands of the court shall be applied to receivership obligations. No law is more firmly settled than that the court having jurisdiction, both of the receivers and of the subject-matter, has exclusive power to administer the entire estate and property. Under the act permitting suit against the receivers without previous leave of the court, a litigant may pursue his claim to judgment, but no authority can be found which would permit him to go further and levy that judgment upon the property whieh has already been sequestered by order of the court. See In re Tyler,