185 F. 309 | E.D. La. | 1911
In this case complainant, the trastee of Steele, Miller & Co., bankrupts, brings his bill against the Companie
Complainant contends the Bank of Mullhouse bought the drafts, and a preference was attempted by substituting valid securities for those wholly bad. The bank contends it was the actual purchaser of cotton, and that by the marking of the 900 bales to correspond with the fraudulent documents, and shipping it, Steele, Miller & Co. appropriated it to them; that they had no notice, actual or constructive, of the insolvency of Steele, Miller & Co., and did not know, and had no reason to believe, that the substitution of the bills of lading was intended as a preference, and therefore, if a preference, it is not voidable.
The matter is now before me solely on an application for a preliminary injunction to prevent the removal of the cotton out of the United States. The Bank of Mullhouse has appeared by counsel, but has filed only what it terms a “limited appearance.” Both sides have submitted certain affidavits and exhibits, tending to prove their respective contentions. It is urged by the bank that an injunction pendente lite in thjs case would be equivalent to a seizure of their property, and that it is entitled to the delivery of the cotton, no matter what may be the ultimate outcome of the suit.
I fully appreciate it is the rule that a preliminary injunction will not issue unless it is probable the complainant will ultimately be granted the'relief prayed for, but I must consider all aspects of the case. If the trustee has any right at all, it is to recover the property itself. I also understand it to be the rule that, whenever equity will enforce
The cotton is still in the custody of the carriers at the port at which they received it, and the bank is not entitled to it if the complainant makes out his case. Instead of coming into court to assert its rights, the bank has endeavored to avoid submitting itself to the jurisdiction of this court while attempting to receive the greatest possible benefit. The case here presented by the affidavits is a close one, and it may be that the bank will prevail on final determination. But I cannot bring myself to decide this important question oh ex parte affidavits, more especially when there are no pleadings of the bank before me. I consider that, as to the question of whether the preference is voidable or not, complainant is entitled to have issue joined, and to search the conscience of the defendants, conformably to the principles of equity.
If the property goes out of the jurisdiction of this court, pending-the determination of the merits, the trustee, if he prevails, will have an empty victory, and will have to pursue the defendants to Trance. While I have no doubt of the learning and probity of the Trench courts, I may be pardoned for indulging the presumption that the courts of the United States are as competent and will as surely deal justly between the parties. Had there been a full and complete appearance by the defendants, I would still consider the interests of justice to be best subserved by detaining the property within the jurisdiction of this court, as I must take notice that the Trench courts accord no conclusiveness to the judgments of the courts of the United States. Kven after a full and complete trial on the merits in this court, the trustee, if successful, would be obliged to try his case anew and again offer all his evidence in the Trench court. If the property is detained within its jurisdiction, it is evident this court can fully enforce any decree that it may make.
It will be easy to minimize any damage the bank is liable to suffer by selling the cotton and depositing the proceeds. In fact, it would seem the transportation company is entitled to relief of this kind. So, too, the property may be released to the bank on its furnishing an adequate bond, or, if the security already given by the trustee is not sufficient to protect all parties, it can be increased.
I will entertain motions for relief in conformity with the above views at any time. In the meanwhile, and to preserve the status quo, an injunction pendente lite will issue.