244 F. 20 | 8th Cir. | 1917
George M. Swift appeals to this court from an interlocutory decree of the United States District Court for the Eastern District of Oklahoma which enjoins him from enforcing— against the three-fourths working interest, or the proceeds thereof derived, or to be derived, during the receivership in the suit of United States v. Bessie Wildcat and others in that court by the Black Panther Oil & Gas Company, a corporation, hereafter called the Panther, from the operation for oil and gas on the northwest quarter of section 9, township 18 north, of range 7 east, in Creek county, Okl., under the lease thereof to the Panther made by the receiver by order of the federal court on April 20, 1914 — the judgment or decree of the state district court of Creek county, (Okl., in the suit of Swift, Trustee, v. Panther, rendered January 15, 1916, for Swift’s recovery of the Panther out of the said three-fourths working interest of $113,330.56 and one-eighth of the oil derived from the land subsequent to December 15, 1915, either by writs of execution, or garnishments, or injunctions in or issued out of the state court.
Before the issue of the injunction of the federal court challenged, Mr. Swift, for the purpose of enforcing his decree, had caused the state court to issue a writ of execution, and had caused the sheriff to levy it upon and to advertise for sale thereunder the interest of the Panther in the land and in the, oil and gas produced therefrom, had caused certain third parties to be garnish eed as creditors of the Panther, and had obtained an order from the state court on March 29, 1916, forbidding the Panther from paying out any money or doing anything of any kind that might prevent it from paying over all the money it then had, or might thereafter obtain, from any banks, or from the sale
“The writ of injunction shall not he granted by any court of the United States to stay proceedings in any court of a state, except in cases where such injunction may he authorized by any law relating to proceedings in bankruptcy.”
In support of this contention counsel cite Diggs & Keith v. Wolcott, 4 Cranch, 179, 2 L. Ed. 587, Peck v. Jenness, 7 How. 612, 623, 624, 625, 12 L. Ed. 841, Haines v. Carpenter, 91 U. S. 254, 23 L. Ed. 345, Whitney v. Wilder, 54 Fed. 554, 4 C. C. A. 510, and other cases of like character wherein the state court first acquired jurisdiction of the subject-matter in controversy. In cases of this class this act of Congress undoubtedly controls, and the federal courts may not interfere by injunction or otherwise with the proceedings of the state courts which have first acquired jurisdiction of the subject-matter. But it is equally true that in a case in which a federal court first obtains jurisdiction of the subject-matter in controversy, and where it acts in aid of its own jurisdiction to render its orders or decrees, or the title or disposition under them of the property within that' jurisdiction, effectual, it may, notwithstanding section 720, Revised Statutes, now section 265 of the Judicial Code, enjoin or restrain all proceedings in the state court which would have the effect of defeating or impairing its jurisdiction, or the orders, decrees, or titles it has made or is making in the exercise thereof. Sharon v. Terry (C. C.) 36 Fed. 337; French v. Hay, 22 Wall. 250, note, 22 L. Ed. 857; Dietzsch v. Huidekoper, 103 U. S. 494, 26 L. Ed. 497; Julian v. Central Trust Company, 193 U. S. 93, 112, 24 Sup. Ct. 399, 48 L. Ed. 629; Starr v. Chicago, Rock Island & P. Ry. Co. (C. C.) 110 Fed. 3, 6; Prout v. Starr, 188 U. S. 537, 23 Sup. Ct. 398, 47 L. Ed. 584; Lang v. Choc
“The court which first acquires jurisdiction of specific property by the lawful seizure thereof, or by the due commencement of a suit in that court, from which it appears that it is, or will become, necessary to a complete determination of the controversy involved, or to the enforcement of the judgment or decree therein, to seize, charge with a lien, sell, or exercise other like dominion over it, thereby withdraws that property from the jurisdiction of every other court and entitles the former to retain the control of it requisite to effectuate its judgment or decree in the suit free from the interference of every other tribunal. Farmers’ Loan & Trust Company v. Lake Street Railroad Co., 177 U. S. 51, 61, 20 Sup. Ct. 564, 44 L. Ed. 667; Peck v. Jennesss. 7 How. 612, 12 L. Ed. 841; Freeman v. Howe, 24 How. 450. 18 L. Ed. 749; Moran v. Sturges, 154 U. S. 256, 14 Sup. Ct. 1019, 38 L. Ed. 981; Central Bank v. Stevens, 169 U. S. 432, 18 Sup. Ct. 403, 42 L. Ed. 807; Williams v. Neely, 67 C. C. A. 171, 185, 131 Fed. 1, 35. 09 L. R. A. 232; Barber Asphalt Co. v. Morris, 66 C. C. A. 55, 58, 132 Fed. 945, 948, 67 L. R. A. 761; Gates v. Bucki. 53 Fed. 961. 869, 4 C. C. A. 116, 12S, 129. v * ■> The jurisdiction of a court over a subject-matter or a cause once lawfully acquired includes the power to enforce its judgment or decree, and to protect the title of those holding under it from every attempt to avoid or annul it. Chicot Co. v. Sherwood, 148 U. S. 529, 533, 531, 13 Sup. Ct. 695, 37 L. Ed. 546; Julian v. Central Trust Company, 193 U. S. 93, 112, 24 Sup. Ct. 399, 48 L. Ed. 629; Wabash Railroad Company v. Adalbert College, 208 U. S. 38, 28 Sup. Ct. 182 [52 L. Ed. 379]; Barker Asphalt Pav. Co. r. Morris, 132 Fed. 945, 919, 66 C. C. A. 55, 59, 67, 67 L. R. A. 761; Brun v. Mann, 80 C. C. A. 513, 151 Fed. 145 [12 L. R. A. (N. S.) 354].”
The foregoing rales are no longer debatable, and by them the in-junctive order of the federal court must be tested. The exact subject-matter in controversy between the two courts is the three-fourths working interest in the oil and gas and in the proceeds of that interest derived and to be derived by the Panther, during the receivership in the federal court, from the land leased to the Panther by the receiver by order of that court on April 20, 1914, and the first question is: Which court first lawfully obtained jurisdiction of that subject-matter? The answer is found in the claims of the parties and the history of the proceedings in the two courts.
On April 17, 1914, on the petition of the plaintiff in the Wildcat suit and some of the defendants therein, including Martha Jackson and Saber Jackson, as her guardian, and with the consent of all the other defendants, the federal court appointed a receiver to cause and direct the production of oil and gas from this land and ordered and directed him to make a formal agreement with the Panther for the development of the land and the production of oil and gas therefrom on the following terms, among others: That the Panther should deliver or pay to the receiver one-fourth of all the oil and gas produced from the land, that the Panther should give to the receiver for the benefit of the parties to the suit a satisfactory bond to perform the provisions of its agreement, that the receiver was—
“authorized and directed to release to the said Black Panther Oil & Gas Company, and its assigns, free from any claim' of any party to this action, * * * the working interest in the oil and gas produced by the said company from the above described land, that is to say, all the oil and gas so produced in excess of the royalty portion of one-fourth of the gross amount of production.”
Thereafter, pursuant to this order and direction of the court, the receiver and the Panther made a formal written agreement which embodied the terms specified in the order of the court, and thereunder the Panther has ever since been in possession of the property, producing or causing others to produce oil and gas from the land, and has been paying or delivering one-fourth thereof to the receiver or to his order.
On November 23, 1914, Saber Jackson, who had not theretofore been a party to the Wildcat suit, otherwise than as guardian for Martha Jackson, intervened in that case in his own behalf and filed his answer and cross-bill, wherein he set forth his claim to a life estate in the land as tenant by the curtesy,, and prayed that he be decreed to have such life estate and to have such further relief as might be just. His answer and cross-bill opened with these words:
“Gomes now Saber Jackson, and by leave of court first obtained files this his answer and cross-bill in the above-entitled cause, hereby submitting to all of the orders, judgments, and proceedings heretofore had in said cause, as fully as though he had been made a party defendant herein from the institution of the suit.”
On December 4, 1914, Saber Jackson assigned to George M. Swift all his rights to any oil and gas that had been or might be derived
The chronological statement of the proceedings in the two courts, which has now been made, demonstrates the fact that before any action or proceeding was commenced in the state court invoking its jurisdiction of any interest of any party in the Thlocco land, or in any of the oil or gas derived or to be derived therefrom, the federal court, by means of a suit in equity brought by the United States against the parties claiming interests in that land, and the oil and gas to be derived therefrom, had acquired full jurisdiction of the land, of the lease by Saber Jackson now held by Swift, and of the oil and gas produced and to be produced therefrom, had, with the consent of all the parties to that suit, appointed a receiver, who had taken possession of the property by his lessee, the Panther, had caused and directed its receiver to make, and that receiver had made, a written agreement with the Panther to the effect that it should produce oil and gas from the land and pay to the receiver, for the benefit of the parties to that suit, one-fourth of the oil and gas so to be produced and its proceeds, and that the Panther should retain and own three-fourths thereof called the working interest, free
After all these proceedings, and still before the action was brought in the state court, Swift acquired from Saber Jackson, who was then a party defendant in the Wildcat suit, his lessor’s interest in his lease to Johnson, while the . latter’s interest as lessee was vested in the Panther before the Panther received the receiver’s lease. As Swift took his interest from Jackson after the latter had submitted himself to all the orders and proceedings in the Wildcat suit, and after Jackson had become a party to that suit, Swift took that interest with all the privileges and advantages, and subject to all the estoppels and disadvantages, under which Jackson himself held them; and as Jackson was estopped, by his submission to the previous orders of the court when he intervened, from denying or assailing the contract of the receiver and the court with the Panther, to the effect that the Panther should have and own the three-fourths working interest in the oil and gas free and clear of the claims of any of the defendants in the Wildcat suit, and that those defendants should look to the one-fourth interest in the oil and gas alone for their rental or royalty, so also was Swift, taking his interest pendente lite, bound by the same estoppel.
After that estoppel had become complete by virtue of the order and contract of the federal court with the Panther, and by the Panther’s reliance and action upon them, Swift undertook to disregard it, and to collect the royalty or rental on his lease by his action in the state court out of the very three-fourths interest which his representative, the federal court, had assured to the Panther free from Swift’s claim, in consideration that the Panther would pay one-fourth of the oil and gas it produced to the receiver for his benefit and for the benefit of the other parties to the Wildcat suit; and it was against his making this collection from that three-fourths by the use of the writ of execution, the garnishments, and the injunctions of the state court that the federal court issued the injunction from which this appeal was taken.
The unavoidable conclusion is that the federal court, long before Swift’s action in the state court was commenced, acquired jurisdiction and possession of the Thlocco land and the leases thereof, of the oil and gas produced and to be produced from it by the Panther during the pendency of the Wildcat suit, and of the controversies
The next contention is that the injunction of the federal court against the enforcement by Swift of the judgment of the state court by its writs of execution, garnishments, and injunctions was unwarranted, because such enforcement will not deprive the federal court of the possession of the land, or prevent its receipt of the one-fourth of the oil and gas produced by the Panther under the lease made by the receiver. But the record convinces that the only property the Panther had or has had since the receiver’s lease is its interest in this land, in the improvements thereon, and in the oil and gas produced therefrom under its leases from Martha Jackson, Saber Jackson, and the receiver, and the three-fourths working interest in the oil and gas and its proceeds assured to it by the order and agreement of the court made at thp time of the receiver’s appointment. To this three-fourths interest and its proceeds the court, the legal representative for this purpose of the defendant Saber Jackson, and of his successory lessor pendente lite, Swift, assured the title free and clear of their claims as lessors in consideration of the one-fourth of the oil and gas to be produced, which the Panther agreed to pay and pays to the receiver for the benefit of the parties to the Wildcat suit. The enforcement of the execution, the garnishments, or the injunction of the state court will necessarily impair or destroy the Panther’s title to this three-fourths or to its proceeds, and apply some or all of them to the payment of the rent reserved in Jackson’s lease which he assigned to Swift. But the court’s order and contract with the Panther at the time of the appointment of the receiver limited the source, as against the Panther, from which any of the parties to the Wildcat suit and those claiming under them could collect rentals reserved in their leases of this land to the one-fourth of the oil and gas which the Panther agreed to pay and paid to the receiver for their benefit, and it unavoidably estops all the parties to that suit and Swift, claiming under one of them, from collecting or applying any of the three-fourths interest, or any of its proceeds, to the payment of those rentals.
The result is that the federal court not only had the jurisdiction and the power, but it was its duty by its injunction, to protect the title of the Panther to this three-fourths interest and to its proceeds, which that court had assured to it free from the claims of the parties to the Wildcat suit, and of Swill claiming under one of them, against the attempt of any of them, by subsequent proceedings in other courts, or otherwise, to evade the estoppel by which they were bound, or to impair or destroy the title o{ the Panther to the three-fourths interest in the oil and gas and its proceeds. Chicot County v. Sherwood, 148 U. S. 529, 533, 534, 13 Sup. Ct. 695, 37 L. Ed. 546;
The conclusions which have been stated were not reached without a deliberate consideration of the arguments of counsel and the authorities they cite to the effect that Saber Jackson’s agreement to be bound by the prior proceedings in the Wildcat suit when he intervened was merely conventional, and did not estop him or Swift, claiming under him, from collecting of the Panther outside the Wildcat suit the rents reserved in Jackson’s lease. On November 23, 1914, when Jackson made that intervention, he was the lessor in a lease of this land in which the Panther then was, and had been since Eebruary, 1914, the lessee. The Panther was then in possession of the land, producing oil and gas and paying one-fourth of it to the receiver for the benefit of the parties to the Wildcat suit, under the order and agreement of the court of April 17, 1914. That order and contract had been made with Jackson’s consent as guardian of his daughter, Martha Jackson.
Counsel assert again and again that the order and agreement' with the Panther, assuring to it the title to'the three-fourths working interest free from the claims of the parties in the Wildcat suit, did not exempt that three-fourths interest, or its proceeds, from liability to levy and application to the payment of the debts of the Panther, and this is undoubtedly true as to all its creditors who were not parties to or bound by the proceedings in the Wildcat suit. It is conceded that before he intervened in that suit Jackson was at liberty to sue the Panther in any competent court for the rents reserved in his lease, and to collect them by the process of that court out of the three-fourths working interest received by the Panther under its lease from the receiver. But the Panther was in possession, producing oil from the land and paying one-fourth of it to the receiver of the court for the benefit of the parties to the Wildcat suit, under an order of the court the legal effect of which was to estop the parties toi that suit from collecting out of the oil and gas produced by the Panther the rents reserved in their leases from any other source than from the one-fourth which the Panther agreed to pay for a title to the other three-fourths free from their claims.
Jackson, at the time he intervened, had the option to stay out of the Wildcat suit and collect his rent elsewhere, if he could, or to intervene, become a party to that suit, and pursue his just share of "the one-fourth interest which was being collected therein for the benefit of the parties to that suit. He could not do. both. The rental reserved in his lease was one-eighth'of the oil and gas produced and saved.. He could not become a party to that suit, thereby make himself a party to the order and agreement of the court that the source of his recovery of his rents reserved should be limited to his just share-of the one-fourth the Panther was paying in consideration of its title exempt from the claims of the defendants in that suit to the other three-fourths, and at the same time recover his rents from tire three-fourths. He exercised his option, intervened, and became a party
When Jackson intervened he expressly declared in his answer and cross-bill that he submitted to all the orders, judgments, and proceedings theretofore had in the Wildcat suit as fully as though he had been a party defendant from the commencement of the suit. The order and contract of lease between the court and the Panther were a, part of the proceedings theretofore had to which he submitted. Under these circumstances there is no persuasive reason why he, or his as-signee, Swift, should be relieved from the general rule of equity practice, or from Jackson’s express submission to the previous orders and proceedings in the Wildcat suit, while, on the other hand, equity and justice alike demand that they should not he so relieved, and the conclusion is that they are both estopped, by the order and agreement of the court and the intervention of Jackson, from applying any part of the three-fourths working interest, or of the proceeds thereof, thereby assured to the Panther free from the claims of the parties to the Wildcat suit to the payment of the rents reserved in Jackson’s lease of November 13, 1913.
"That, except as otherwise provided in section» 16 o£ this act, no restraining order or interlocutory order of injunction shall issue, except upon tho giving oC security by the applicant in such sum as the court or judge may deem proper, conditioned upon the payment of such costs and damages as may ho incurred or suffered by any party who may be found to have been wrongfully enjoined or restrained thereby.” 38 Stat. 788, c. 323 (Comp. St. 1910, § 1243b).
And the court below ordered and issued its injunction without compelling the Panther to give any bond, although counsel for Mr. Swift moved the court to require it.
But the restraining order and injunction in this case were issued by the court below, in lieu of proceedings for contempt of that court, to prevent the impairment and defeat of the just exercise of its undoubted jurisdiction to protect and enforce its lawful orders and to preserve the title made by it under them. The unlawful interference of Mr. Swift with the enforcement of the just orders and the preservation of the lawful titles made by the court below was a contempt of that court, and, if continued, might well have been punished as such. The issue of the injunction was hut a milder method of protecting its jurisdiction, orders, and titles from unlawful impairment. There is nothing in section 18 to indicate, and, until that intention is clearly expressed, it cannot be presumed that.the Congress intended thereby to limit or condition in any way the power of the federal court by means of its injunction, any more than by means of proceedings for contempt,
The conclusion which has been reached uppn the merits of this case seems to demonstrate the fact that the court below unwittingly fell into an error in denying tire motion of Swift for leave to intervene, to answer, to file a cross-bill, to plead and to prove in the Wildcat suit his claim under his lease, and there to recover his just share of the one-fourth interest secured to the receiver for the benefit of the parties in that case. As we have seen, he is estopped by Jackson’s intervention in that case from enforcing his claim against the three-fourths interest the Panther has secured, and, as the Panther has no other property, and, as Swift claims to have succeeded to' Saber Jackson’s interest, he is entitled to Jackson’s share of the one-fourth interest going to the receiver. As that one-fourth interest is within the exclusive jurisdiction of the court below in the Wildcat suit, and as Swift’s only remedy to collect tire rent reserved in the lease he holds is by an intervention in that suit, the court below cannot justly deny him the right to intervene, and to secure an adjudication of the merits of his claim therein, while at the same time it denies him, as it has in our opinion rightfully done, the right to enforce his claim outside that court by levy upon and application of the three-fourths interest going to the Panther to the payment of his claim.
It may be that the order denying Swift leave to intervene may be reviewed as an intermediate order on an appeal from the final order of decree in the Wildcat suit by Jackson, who perhaps represents Swift’s claim in that suit in his absence (Western Union Telegraph Co. v. United States & Mexican Trust Co., 221 Fed. 545, 551, 137 C. C. A. 113, 119); but it is desirable, in the interest of a speedy and conclusive disposition of the receiver’s one-fourth interest and its proceeds, if it is not already too late; that Swift, if he still desires, should yet have an opportunity to prove and plead his claim and have an adjudication of it upon its merits in the Wildcat suit in the court below, before that court enters its final decree of distribution therein, and although the order denying his intervention is not reviewable on this appeal, the views of this court regarding his right to. intervene have been expressed, in the hope that the court below may yet find a way to permit him so to do.
The injunctive order and decree was just and equitable, and it is affirmed.