Refior v. Lansing Drop Forge Co.

134 F.2d 894, 1943 U.S. App. LEXIS 3712
CourtCourt of Appeals for the Sixth Circuit
DecidedApril 6, 1943
DocketNo. 9280
StatusPublished
Cited by10 cases

This text of 134 F.2d 894 (Refior v. Lansing Drop Forge Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Refior v. Lansing Drop Forge Co., 134 F.2d 894, 1943 U.S. App. LEXIS 3712 (6th Cir. 1943).

Opinion

SIMONS, Circuit Judge.

The appellant filed his bill of complaint in the Circuit Court for Ingham County, Michigan, for the purpose of obtaining equitable relief as a minority stockholder of the defendant corporation, charging the majority stockholders with fraud and mismanagement, and seeking equitable relief in respect to certain preferred stock held by the defendant Edward H. Refior. He alleged that in 1935 he filed suit for equitable relief in the District Court of the United States for the Eastern District of Michigan, where it was dismissed without hearing on the merits, but that he never had a purpose to discontinue his attempt to get relief and after the dismissal he caused an appeal to be taken to this court. He now files his bill in the State Court for the purpose of protecting his own rights and the interests of the corporation. Upon the filing of the bill an ex parte order was obtained temporarily restraining the appellees from voting preferred stock and from voting bonuses, salary increases, or dividends.

Upon petition of the defendants the cause was removed to the United States District Court for the Eastern District of [896]*896Michigan. The ground for such removal was that the bill of complaint and restraining order “hinder, delay and impede or tend to hinder, delay or impede the decree of the District Court of the United States,” and so a federal question is involved under the statutes and laws of the United States. In the District Court a motion by the appellant to remand was overruled, and after hearing upon motion of the appellees for summary judgment, the appellant’s bill of complaint was dismissed and the restraining order theretofore entered, dissolved. Although no findings of. fact, conclusions of law, or opinion were announced by the District Judge, the motion’ for judgment alleged that the appellant’s bill was founded upon the same allegations as were set forth in the prior proceeding, that the prayers for relief were substantially the same, and that the defendants are entitled to summary judgment under the Rules of Civil Procedure for the District Courts of the United States, specifically Rule 56, 28 U.S. C.A. following section 723c.

The circumstances which led to the dismissal of the bill filed in the District Court in 1935, are fully disclosed in Refior v. Lansing Drop Forge Co., 6 Cir., 124 F.2d 440, and need not here be reviewed. It is sufficient to say that we there affirmed the degree of dismissal based upon the failure of the appellant to prosecute his cause and to comply with the orders of the court, and overruled as unsound, all claims of error therein. A petition ” to the Supreme Court for certiorari was denied, 316 U.S. 671, 62 S.Ct. 1047, 86 L.Ed. 1746. The decree of dismissal had been “with prejudice”. Rule 41(b) of the Federal Rules of Civil Procedure, provides that “unless the court in its order for dismissal otherwise specifies * * * under this subdivision and any dismissal not provided for in this rule * * * operates as an adjudication upon the merits.” In affirming the decree we recognized it as such not only under the terms of the rule but under the settled practices of courts of equity.

Primarily, consideration must be given to the question of removability. The right to remove the cause from the Ingham County Circuit Court to the District Court, was not grounded upon diversity of citizenship since the individual defendants are residents of Michigan, and the Drop Forge Company a Michigan corporation, but upon the presence in the suit of a federal question. Section 71 of the Judicial Code, Title 28, reads in part as follows:

“Any suit of a civil nature, at law or in equity, arising under the ’Constitution or laws of the United States, or treaties made, or which shall be made, under their authority, of which the district courts of the United States are given original jurisdiction, in any State court, may be removed by the defendant or defendants therein to the district court of the United States for the proper district.”

Our problem is to determine whether the suit brought in the State Court arises under the Constitution or laws of the United States. The appellees contend that it is such a suit because it is a collateral attack upon a decree of a court of the United States since all of the allegations of the bill and the legal issues resulting therefrom were involved in the prior proceeding and the decree was final as to such issues; that such collateral attack would -inevitably result in conflict between the State and Federal Courts, if the State Court were to arrive at a different result than had been arrived at in the Federal Court; and that, the appellant, in filing his bill, was in con-tempt of the Federal Court which had already effectually disposed of all of the is-. sues raised by his bill of complaint in the. State Court. We give no consideration' to the appellant’s contention that the District Court decree lacked finality at the time his bill was filed in the State Court, because there was still pending before us a petition for rehearing, and upon its denial a petition to the Supreme Court for certiorari was still available to him. It is a well-settled rule of the Federal Courts, that a judgment or decree will operate ás res judicata or as estoppel, notwithstanding an appeal, unless the proceeding on review is a trial de novo. Kansas Pacific Railway Company v. Twombly, 100 U.S. 78, 25 L.Ed. 550; Straus v. American Publishers’ Association, 2 Cir., 201 F. 306; Roberts v. Anderson, 10 Cir., 66 F.2d 874; E. I. Du Pont de Nemours & Co. v. Richmond Guano Co., 4 Cir., 297 F. 580.

In support of removability the appellees rely upon Cornue v. Ingersoll, 1 Cir., 176 F. 194; South Dakota Central Railway Co. v. Continental & Commercial Trust & Savings Bank, 8 Cir., 255 F. 941; Torquay Corp. v. Radio Corp. of America, D.C.S.D.N.Y., 2 F.Supp. 841-843. In the Cornue case there was involved a lien upon the de[897]*897fendant’s property, established by a decision of the United States Supreme Court, Ingersoll v. Coram, 211 U.S. 335, 29 S.Ct. 92, 53 L.Ed. 208, and it was held that the earlier suit was quasi in rem, hence the plaintiff’s remedy was limited to an application to the court which assumed to decide the question, and that for him to sue in the State Court was to be in contempt of the Federal Court, and the decision in the Torquay case was in reliance upon that in Cornue v. Ingersoll, supra. Straus v. American Publishers’ Association, supra, did not involve removal proceedings, and Julian v. Central Trust Co., 193 U.S. 93, 24 S.Ct. 399, 48 L.Ed. 629; Wabash Railroad v. Adelbert College, 208 U.S. 38, 28 S.Ct. 182, 52 L.Ed. 379, and Smith v. Missouri Pacific R. R. Co., 8 Cir., 266 F. 653, all involved collateral attacks upon title to the property of a bankrupt under the control of the Federal Court. McClelland v. Rose, 5 Cir., 247 F. 721, involved a similar question with regard to the estate of a deceased testator.

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Bluebook (online)
134 F.2d 894, 1943 U.S. App. LEXIS 3712, Counsel Stack Legal Research, https://law.counselstack.com/opinion/refior-v-lansing-drop-forge-co-ca6-1943.