135 F.2d 983 | 5th Cir. | 1943
Lead Opinion
The questions necessary to be decided are 1. Is there a final judgment which this court has jurisdiction to review? 2. Was that judgment, given against appellant, correct? 3. Was the cause properly removed from the State Court to the District Court?
The case concerns the assets of American Life Insurance Company, a corporation of Michigan, which became insolvent, and whose affairs went into the hands of John G. Emery as Commissioner of Insurance
On September 28, 1939, Lydick as receiver, without any special authority from his Court, filed in the court of his appointment the petition here involved. It is entitled in the receivership cause, is addressed to the Court, recites his appointment as receiver and his taking possession of the assets and annexes his inventory “Marked Exhibit A, and hereto attached and made a part hereof for all purposes”. It alleges that the Michigan and Iowa receivers each are claiming some character of right, title or interest in some or all of the assets described in Exhibit A; that it would be to the best interest of the estate and all persons at interest to have these claims defined and established by order of the Court. The prayer is for a citation against the Michigan and Iowa receivers, and in their official capacities as Commissioners of Insurance, requiring each to appear and assert whatever right, title or interests he claims, and that the petitioner be decreed to hold all the assets in his possession free of all such claims. The clerk thereupon issued citations as prayed, and they were personally served in Michigan and Iowa by a disinterested person pursuant to Articles 2037 and 2038, Revised Civil Statutes of Texas, relating to the service of nonresident defendants. The two defendants joined in a petition to remove the suit brought by Lydick as receiver, on the ground of diversity of citizenship with a sum of more than $3,000 involved. Thereupon the State court judge on Nov. 24, 1939, approved the tendered bond, ordered “the suit filed in this cause by Dan E. Lydick, Receiver, against Charles R. Fischer, Commissioner, and John G. Emery, Commissioner * * * to be removed to the District Court of the United States * * * and that all other proceedings of this Court be stayed”. The district judge denied a motion to remand. The Michigan receiver then answered, claiming title as statutory successor to the American Life Insurance Company to all its assets. Fischer, the Iowa Receiver, appeared specially to plead that neither the State nor district court had acquired any jurisdiction over his person in Texas, and that specified notes and securities claimed by Lydick, Receiver, had, long before any of the receiverships and at all times since, been in the State of Iowa deposited with the Insurance Commissioner under the laws of Iowa and there was no possession of or jurisdiction over them in the courts in Texas; and he moved that as to said deposited securities the suit of Lydick, Receiver, and the cross claim of Emery, Commissioner, be dismissed for want of jurisdiction. The district judge heard evidence on this motion and sustained it_ Lydick, Receiver, then appealed.
2. It is correct. As a result of litigation in Iowa between Lydick, Receiver, and Fischer, Commissioner, touching these same Iowa assets, it has been held that Fischer has statutory title to them and may retain them as against the Texas receivership, subject to legal consequences if hereafter Fischer has to ask aid in Texas. Fischer, Commissioner, v. American United Life Ins. Co., 314 U.S. 549, 62 S.Ct. 380, 76 L.Ed. 444; American United Life Ins. Co. v. Fischer, Com’r, 8 Cir., 130 F.2d 643. The Texas receivership is not entitled to possess the securities deposited in Iowa.
3. What was removed to the district court was properly removable. The original creditors’ bill, with its receivership, was not sought to be removed, nor was it ordered removed. The State judge’s order specifically states that it was the suit against the Iowa and Michigan parties brought by his receiver that he ordered removed. It is not the removal of a separable controversy. The controversies with the Iowa receiver and with the Michigan receiver were possibly separate, but they were not attempted to be separated but were all removed, for diversity of citizenship. Lydick entitled his suit in the receivership cause, but it might better have been entitled as a new case. He asked no order to make new parties, and sought no relief against the parties to the receivership case; but he prayed and got independent original citations to answer his self-sufficient petition against two persons who were not parties to any cause pending in the court. He was asserting only his rights as receiver, which he was competent to represent. No other parties were necessary. It was in form and substance an independent suit. It might have been brought in the district court by direction of the State judge. In so far as it involved property actually in the custody of the State court, there might have been a question how far a federal court ought to interfere, under the rules of comity, but those rules do not forbid the trial in the federal courts of the title to particular assets in a State court receivership, if possession and final administration is left to the State court which first took possession. See Fischer, Com. v. American United Life Ins. Co., 314 U.S. 549, 62 S.Ct. 380, 86 L.Ed. 444 and cases cited. But after all the comity is between courts, and is not a rule of law fixing the rights of litigants. The court entitled to deference may claim or may waive it. This State court did nothing to assert any right of comity, gave its receiver no instruction to resist interference by the federal court, but expressly acquiesced in the proposed removal and directed that no further proceedings be had in the State court. In this respect the case differs wholly from Mullendore v. American Surety Co., 9 Cir., 27 F.2d 572. We think there was no undue interference with the State court, and that Lydick’s suit was a separate one of which the district court could take jurisdiction by removal.
Judgment affirmed.
Dissenting Opinion
(dissenting).
I agree with the decision of the majority upon the first of ihe three questions decided that the judgment was a final one and that this court has jurisdiction of the appeal. Upon the second question whether the judgment given against appellant was correct, I express no opinion because I disagree with the decision of the third question that the petition appellant filed in the receivership cause to require the appellees to come in and assert their claims was a removable suit. I think it was not and that the judgment should be reversed for the error of not rtmanding it on appellant’s motion. I, therefore, dissent from the affirmance.