130 F. 820 | 6th Cir. | 1904
having stated the case as above, delivered the opinion of the court.
The ground on which the Circuit Court refused the petition of the receiver of the state court for the surrender to him of the assets of the Evening Post Company was that the state court had not the possession or control of the property of the company at the time when the receiver of the Circuit Court of the United States took possession thereof under the order of the latter court. The learned judge conceded what has so often been decided — that, the suit in the state court having been first commenced, if that court had taken actual possession of the property, it could not lawfully have been dispossessed by the order of the federal court. It is unnecessary to fortify the ground conceded. It has long since ceased to be debatable. The question is whether, upon the facts as they were presented to the court below, it was essential that the state coúrt should have actually exercised its dominion over the property, in order to render the seizure thereof by
“Nor is this rule restricted, in its application to cases where property has been actually seized under judicial process before a second suit is instituted in another court, but it often applies as well where suits are brought to enforce liens against specific property, to marshal assets, administer trusts, or liquidate insolvent estates, and in suits of a similar nature, where, in the progress of the litigation, the court may be compelled to assume the possession and control of the property to be affected. The rule has been declared to be of especial importance in its application to federal and state courts.”
This subject has been much discussed in two cases in this circuit, which are canvassed in the briefs of counsel here (Powers v. Blue Grass Building & Loan Association [C. C.] 86 Fed. 705, and Phelps v. Mutual Reserve Fund Life Association, 112 Fed. 453, 50 C. C. A. 339, 61 L. R. A. 717), in both of which cases Judge Eurton delivered the opinion, in the first at the circuit, and in the latter for this court. The facts in neither of these cases presented the very question we now have before us, for in the Powers Case the state court was acting as an adviser of an assignee, and was not proceeding for the purpose of affording relief to a plaintiff. The assignee was not an officer of the court, and the possession of the res by the court was not necessary to the object of the application. It was held there was no impediment to the proceeding which the Circuit Court of the United States proposed to take with reference to the assigned property. In the Phelps Case a receiver had actually been appointed by the state court in proceedings supplementary to the judgment, and for the satisfaction thereof. The order appointing the receiver impounded the debts due to the association, and directed him to collect them. Upon a bill in equity filed in the United States Circuit Court, denying the jurisdiction of the state court to render the judgment mentioned or to appoint the receiver, the federal court granted an injunction restraining the
The following cases in other Circuit Courts of Appeals are directly in point: Merritt v. American Steel Barge Co., 79 Fed. 228, 24 C. C. A. 530, 49 U. S. App. 85; Adams v. Mercantile Trust Co., 66 Fed. 617, 15 C. C. A. 1, 30 U. S. App. 204; Zimmerman v. So Relle, 80 Fed. 417, 25 C. C. A. 518; Memphis Sav. Bank v. Houchens, 115 Fed. 110, 52 C. C. A. 176; Baltimore & O. R. Co. v. Wabash R. Co., 119 Fed. 678, 57 C. C. A. 322, certiorari denied 187 U. S. 650, 23 Sup. Ct. 848, 47 L. Ed. 349. And see 2 Bates, Fed. Procedure, § 613.
In harmony with it, and designed to give it full operation, is another rule, which is that whenever in such case a third party claims some interest in the property which has been subjected to the control of the court, he may intervene in the pending case, and become a party thereto, for the protection of his interest, as explained in Krippendorf v. Hyde, 110 U. S. 276, 4 Sup. Ct. 27, 28 L. Ed. 145; Gumbel v. Pitken, 124 U. S. 143, 5 Sup. Ct. 616, 28 L. Ed. 1128, and numerous other cases of like character decided by the Supreme Court, or, if that interest be such that it survives the exercise of the jurisdiction in the pending case, he may stand aloof and pursue his remedies after the property has been discharged by the court which has had it under its control. We are not now concerned with suits in personam, in regard to which other reasons may prevail to a different result. The case of Moran v. Sturges, 154 U. S. 256, 14 Sup. Ct. 1019, 38 L. Ed. 981, though at first blush it might seem to the contrary, is not in conflict with the current of modern decisions. In that case the claim of the plaintiff was of a maritime nature, of which the federal court alone had jurisdiction. The state court did not have power to deal with it. The two courts were not of concurrent jurisdiction. The plaintiff could not by intervention confer upon the state court a jurisdiction which it did not by law possess. The authority of the federal court was paramount and exclusive.
It does not matter that the plaintiff in the present case was not a party to the case in the state court, or that by reason of his citizenship he had a constitutional right to bring his suit in the federal court. Perhaps he might have maintained it there for the purpose of establishing his claim. He .could then go into the state court which had the control of the assets of his debtor, and secure the recognition of his right thus established. Byers v. McAuley, 149 U. S. 608, 13 Sup. Ct. 906, 37 L. Ed. 867. The presumption must be that such recognition would be given by the state court, and his lawful rights duly accorded to him. It is not even charged in his bill that any one is
The state court took the proper course when it directed its receiver to apply to the court below for the surrender to it of the assets of the company, and we think there was error in refusing the application when the facts were made known to the latter court.
The order appealed from must be reversed, with costs, and the cause remanded, with a direction to grant the petition of the receiver of the circuit court for Jefferson county.