Allen v. Scandinavian National Bank

The subject-matter of this motion is certain moneys now in the custody of the state court, under and by virtue of its writ of attachment, duly issued, in a suit which was pending in that court before the commencement of this action. The motion is to transfer said moneys from said state court to the custody of this court, by appointing a receiver of the same in this action. Two questions arise: 1st. As to the power of this court to make such transfer of said moneys. 2d. If the court has the power, is there any cause shown calling for the exercise of such power. First. This motion is to be determined by the ordinary rules of law and practice in equity. The extraordinary powers conferred by the bankrupt act have no application in this proceeding, because this is not a cause of action or proceeding arising under said bankrupt act. The statute forbidding the United States courts to issue an injunction restraining proceedings in a state court, is applicable and in force (1 Stat. at Large, 334). Also, the well-established rule of law, that when the state court first obtains jurisdiction of a matter where the jurisdiction of the two courts is concurrent, the United States court cannot interfere (Buck agt. Colbath 3 Wallace, 334). [93] “ Where either court is in the possession of the res sought to be reached, the process of the other must pause until that possession has terminated ” (Amy agt. Supervisors, 11 Wallace, 138). The provision of the banking act gives the state courts concurrent jurisdiction of proceedings against banks authorized thereby (Bank act of 1864, § 8). It) therefore, the state court cannot be ousted of its jurisdiction by this court nor enjoined in its action, the subject-matter of the controversy which is in the custody of the state court cannot be taken from it by any order in this action. Second. If the court has the power to appoint a receiver, there is no occasion for exercising such power. The money is safe where it is. The bank, which is the custodian of the fund, is more responsible than a receiver would be, and must respond to any judgment finally rendered against it herein. Third. If the suit in the state court should result in a judgment in favor of the plaintiff therein, the sheriff would be responsible to the said plaintiff, and the Broadway Bank to the sheriff for the said moneys to satisfy said judgment. To take said moneys from the said Broadway Bank without first relieving it from all liability under said attachment, would be" exposing the bank to the contingency of again paying said moneys to the sheriff. On the 2d of September, 1873, judge Blatchfobd denied both motions—for an injunction and a receiver, bio written opinion being given.