Adams v. Mercantile Trust Co.

PARDEE, Circuit Judge (after stating the facts as above). The suit instituted by Broughton in the state court against the Jacksonville, Mayport & Pablo Railway & Navigation Company brought under the’ direct control of the court all the property of said railway company, to be administered for all entitled to share the fruits of the litigation. The possession and control of the railroad were absolutely necessary to the exercise of the jurisdiction of- the court. The filing of the bill, and the service of process thereunder, was an equitable levy upon the property. Miller v. Sherry, 2 Wall. 237; Railroad Co. v. Pettus, 113 U. S. 116-124, 5 Sup. Ct. 387. Pending the proceedings in that court under the said bill the said railroad and property may properly be said to be in gremio legis. Union Trust Co. v. Rockford, R. I. & St. L. R. Co., 6 Biss. 197, Fed. Cas. No. 14,401; Railroad Co. v. Gomila, 132 U. S. 478, 10 Sup. Ct. 155. The Mercantile Trust Company was made a party to the suit, and, so far as the record goes, is bound by the proceedings had therein. Upon the face of the record, the subsequent institution of the suit to foreclose, in the interest of local bondholders, was for the purpose of evading, and practically ousting, the state court. While state and national tribunals are independent and separate, neither can impede or arrest any action, the other may take, within the limits of its jurisdiction, for the satisfaction of its judgments and decrees. Amy v. Supervisors, 11 Wall. 136; Williams v. Benedict, 8 How. 107-112. The appellee relies upon the decision of Mr. Justice Bradley in the case of Wilmer v. Railway Co., 2 Woods, 409-427, Fed. Cas. No. 17,775, in which Mr. Justice. Bradley says: “The test, I think, is this: Not which action was first commenced, nor which cause of action had priority or superiority, but which court first acquired jurisdiction over the property. If the Fulton county court had the power to take possession when it did so, and did not invade the possession or jurisdiction of this court, its possession will not be interfered with by this court. The parties must either go to that court, and pray for the removal of its hand, or, having procured an adjudication of their rights in this court,, must wait until the action of that court has been brought to a close, and judicial possession has ceased. Service of process gives jurisdiction over the person. Seizure gives jurisdiction over the property, and, until it is seized, no matter when the suit was commenced, the court does not have1 jurisdiction.” [621] We hare examined thus case with care, and And that the question before Mr. Justice Bradley was whether the court could— and, if it could, whether it would — take property out of the possession of a. receiver appointed by a state court; and in concluding his opinion he says: “In differing from Judge Woods, we do so with much respect for his opinion. The question must he admitted to be one of some nicety, hut we prefer that course which avoids collision with a state court, when it coincides with our own convictions as to the la w.” The same case shows that, at a preliminary stage, Judge Woods iafterwards Mr. Justice Woods, of the supreme court), having before him the question of jurisdiction to appoint a receiver in a case where, after bill of foreclosure filed and injunction issued in the federal court, a receiver had been appointed in a state court for part of the property, reviewed the authorities, and said: “Is actual seizure of the property necessary to the jurisdiction of the court? In my judgment, it is not. Tn this case 1 think the jurisdiction of the United States circuit court for the Northern district of Georgia, first attached io tin: property, because the suit in that court was first commenced, and service of subpoena made, and because (1) one oi' the main objects of the suit was to obtain possession of the property, and sneli possession was necessary to the full relief prayed by the bill, and (2) because, by the service of the restraining order enjoining the defendant company from delivering possession of the trust i>roperty to any person except a receiver appointed by this court in this cause, the, court acquired constructive possession, and from the moment of the service of the restraining order the property was in gremio legis. I think these positions are sustained by the authorities. I subjoin a reference to a number of cases, in all of which the. subject under consideration is discussed, and in some of which the precise point is decided, and the views above expressed are sustained: Smith v. McIner, 9 Wheat. 532; Wallace v. McConnell, 13 Pet. 151; Peck v. Jenness, 7 How. 624; Williams v. Benedict, 8 How. 107; Wiswell v. Sampson, 14 How. 52; Taylor v. Carryl, 20 How. 583; Green v. Creighton, 23 How. 90; Freeman v. Howe, 24 How. 457; Chittenden v. Brewster, 2 Wall. 191; Memphis v. Dean, 8 Wall. 64; Taylor v. Taintor, 16 Wall. 370; New Orleans v. Steamship Co., 20 Wall. 392, 393; Atlas Bank v. Nahant Bank, 23 Pick. 489; Wadleigh v. Veazie, 3 Sumn. 165, Fed. Cas. No. 17,031; Ex parte Robinson, 6 McLean, 355, Fed. Cas. No. 11,935; Bell v. Trust Co., 1 Biss. 260, Fed. Cas. No. 1,260; Bell v. Railroad Co., 2 Biss. 390, Fed. Cas. No. 1,407; Parsons v. Lyman, 5 Blatchf. 170, Fed. Cas. No. 10,780; Stearns v. Stearns, 16 Mass. 171; Conover v. Mayor, etc., 25 Barb. 513; Clepper v. State, 4 Tex. 242; Thompson v. Hill, 3 Yerg. 167; Bank of Bellows Falls v. Rutland R. Co., 28 Vt. 478; Merrill v. Lake, 16 Ohio, 405; Ex parte Bushnel, 8 Ohio St. 601; State v. Yarbrough,, 1 Hawks, 78; Gould v. Hayes, 19 Ala. 448; High, Rec. 38-41, and note. Especial attention is called to the cases of Wiswell v. Sampson, Chittenden v. Brewster, and Bell v. Railroad Co., supra. An examination of the eases cited will show that actual seizure of property has not been considered necessary to the jurisdiction of the court in a case where the possession of the property is necessary to the relief sought Tlie commencement of tlie action and service of process, or, according to some of the cases, the simple commencement of the suit by the filing of the bill, is sufficient to give the court jurisdiction, to the exclusion of all other courts.” The views expressed by Judge Woods have been accepted and followed, in this circuit, at least, and we fully concur therein, as it, correct exposition of the law, and one particularly applicable to the present case; while the decision of Mr. Justice Bradley, doubted by himself, is open to the objection that thereby jurisdiction is frequently made to depend upon a race between marshals and sher [622] iffs, likely to result in unseemly controversies between the state and federal courts. Considering the present case, however, as one in which neither the appointment nor the ousting of a receiver of any court is involved, but as presenting a question of comity between state and federal courts, we are of opinion that the court below erred in not granting the application of the receiver of the state court for the possession of the property which is so clearly necessary for the further exercise of that court’s jurisdiction, and to which possession we think it so clearly entitled. The decree appealed from is reversed, and the ‘ cause remanded to the court below, with directions to enter an order and decree in favor of the intervener, restoring to his possession, and to the possession óf the state court, the property of the Jacksonville, Mayport & Pablo Railway & Navigation Company.