71 F. 556 | U.S. Circuit Court for the District of Western Missouri | 1896
The complainant in the original hill in this case is a New York corporation, and the defendant therein is a Missouri corporation, located at Kansas City, in this district. The chief business of the latter company was to loan money upon real-estate security, issuing what are known as “debenture bonds,” secured by real-estate mortgages, which it negotiated, guarantying payment thereof. These loans were principally secured on lands in Missouri hnd adjoining Western states. While the company had an. office in the city of- New York, where its president and other of.ficers had a situs, its actual business, within the contemplation of its charter, was conducted here, through its agents and representatives. Yet, as is quite customary with such concerns, when its of
The Kansas City Safe Deposit & Savings Bank is a Missouri corporation, which conducted its business at Kansas City, in this disiriet. Becoming insolvent, Howard M. Holden, of said city, was made assignee, under the statutes of the state, of said hank, whose affairs are being administered by him under the supervision of one of tht* state courts. He presents, by way of intervention, to this court, his petition, showing that, out of transactions had between said bank and the Equitable Mortgage Company at Kansas City, while they were going concerns, a large indebtedness arose in favor of the bank against the Equitable Mortgage Company, the amount of which is controverted by the receivers, and praying that the existence and amount of said claim be adjudicated by this court against the receivers. The receivers and the complainant in the foreclosure proceedings move to dismiss this petition, on the ground that the New York court has exclusive jurisdiction over the subjectmatier of this controversy. No contention is made here by the intervener but that, in the matter of adjusting the priorities among the creditors of the insolvent estate, and in determining the order, manner, and time of the distribution thereof, the court in which the receivership first attached should have exclusive jurisdiction. But it is insisted that the intervener should be permitted to litigate here the question of the existence and amount of the claim against the insolvent corporation.
The rule of procedure invoked by the complainant and the respondent receivers, which draws to the court initiating the receivership jurisdiction over claims against the estate, lias its foundation in the necessities of the situation growing out of ancillary
“It is further ordered that said receivers designate, in due form, some person having an office in the place in which the office of the cleric of the circuit court of this district is located, on whom service of notices, writs, and other-process may be made, and that said receivers execute and file in said cleric’s office a notice, stating the name and residence of such agent, and that he is authorized, in behalf of the receivers, to receive and accept service of notices and writs and other process, as herein designated, and that service of notices and writs on said agent shall be equivalent to personal service on said receivers, whether said notices or writs are issued out of this or any state court.”
In conformity therewith, the receivers, in due form, designated, in writing, filed in the clerk’s office of this court, the clerk of this court such "person.” It was competent for the court, in appointing such receivers, to impose such conditions and obligations. Central Trust Co. v. Texas & St. L. Ry. Co., 22 Fed. 137; Trust Co. v.
"It is unnecessary to discuss or decide here whether the circuit court sitting in Colorado or Wyoming is a court oí ancillary jurisdiction in the matter of this receivership. Tlieso receivers were first appointed in this court, silting in Nebraska. So far as the general management of the trust imposed upon them, the general operation of the railroad system in their charge in tills circuit, and their general accounting, is concerned', they must report to and be governed by this court, sitting in Nebraska. The impracticability of properly administering this great trust under any other practice, and the intolerable confusion which would result from contradictory orders, regarding these subjects, made in the different districts in the circuit, will commend This rule of practice to every judge within the jurisdiction, and prevent any interference or modification of the orders issued in these matters by Uk> circuit court for the district of Nebraska, except by appeal or upon rehearing: bul the circuit courts in the districts of Colorado and Wyoming have jurisdiction To hear and determine the claims of the citizens of those districts against the insolvent corporation and the receivers of it, and their determination of those matters will be equally respected by the court sitting in Nebraska. Citizens of one district wiil not be required to go to another district to assert their claims against receivers appointed by the courts of both districts.”
I cannot accept the suggestion of the learned counsel, in trying to get away from the broad language of this declaration, that it should be restrained to the instance of the facts of a case where the ancillary receivership supervenes in the same circuit. The federal judicial department is divided into circuits and districts. This is rather for convenience in administration than for the unification of the districts within the particular circuit. When a justice of the supreme court or the judge of the circuit court sits to transact business nisi, it is in one of these courts in a given district. His judgments and decrees are entered of record in the court where he sits. When he makes a decree appointing a receiver, it is entered up in a specified court of the district; and the court in which the proceedings are initiated becomes the court of primary administration, although a like order may be entered in the other district courts of the circuit. Each district court, under the existing system, retains its separate autonomy; so that the respective district: courts of the circuit are as independent of each other as from those of another circuit. Precisely what Judge Sanborn meant to say, and did say, was that citizens of the state of Colorado would not be required to forego the hearing and adjudication of their claims against the receivers in the Colorado court, and be coerced to go to Omaha, where the receivership originated. ‘‘Citizens of one district will not be required to go to another district to assert their claims against receivers appointed by the courts of both districts.”
These receivers, having come into this court for assistance in conducting the administration of the estate, and having accepted the conditions imposed upon them by the concluding paragraph of Judge Caldwell’s decree affirming their office as receivers, cannot now escape their obligation to litigate this claim here on the ground that an order has been obtained from the New York court for a reference to a master, and by reason of his giving notice to creditors, fixing a time and place, which, of course, is the city of New York, for the hearing of claims before him. This claim, in one form or another, came before this court, with notice to the receivers, before the reference to said master, and the receivers ought not to be required to make, and they ought not to consent to, a distribution of the funds in their hands until the case here pending has been determined. What the result of a final distribution of the assets by the court in New York may be, pending this controversy here, is a question not before this court. But, having voluntarily come into this court, and submitted themselves to its jurisdiction as such receivers, they will not be discharged herefrom without the leave of this court. The motion is denied.