State Trust Co. v. Kansas City, P. & G. R.

110 F. 10, 1901 U.S. App. LEXIS 4831
CourtU.S. Circuit Court for the District of Western Missouri
DecidedApril 15, 1901
DocketNo. 2,331
StatusPublished
Cited by13 cases

This text of 110 F. 10 (State Trust Co. v. Kansas City, P. & G. R.) is published on Counsel Stack Legal Research, covering U.S. Circuit Court for the District of Western Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Trust Co. v. Kansas City, P. & G. R., 110 F. 10, 1901 U.S. App. LEXIS 4831 (circtwdmo 1901).

Opinion

PHILIPS, District Judge

(orally). This cause has been submitted to the court on two questions: First, on the motion of the plaintiff to remand the cause to the state court; and, second, in case said motion be sustained, as to the right of the Kansas City Southern Railway Company, on a bill in the nature of a supplemental bill in the original foreclosure proceeding, to enjoin the Guardian Trust Company from the further prosecution of the suit in the state court.

Without entering into a discussion of the first question, it is sufficient for the court to say that as the suit instituted in the state court by the Guardian Trust Company against the Kansas City, Pittsburg & Gulf Railroad Company and the Kansas City Southern Railway Company is an independent suit at law, and both the defendants are Missouri corporations, the right of the defendant the Kansas City Southern Railway Company to remove the whole cause into this court cannot be sustained. The controversy is not separable as to the defendants. An examination of the more re-, cent decisions of the supreme court of the United States is against the right of such removal. The motion to remand, therefore, will be sustained.

[12]*12The remaining question, then, is whether the Kansas City Southern Railway Company has a right, by a supplemental bill filed in the original foreclosure proceedings in this court, .to enjoin the suit instituted by the Guardian Trust Company in the state court. This question is answered by a review of the adjudicated cases and the provisions of the decree of foreclosure and confirmation of sale in the receivership case. In Sharon v. Terry (C. C.) 36 Fed. 337, Mr. Justice Field, on the circuit, delivered an instructive opinion on the question of the right of the court which first obtains jurisdiction of the subject-matter and the parties in a procéeding in equity to retain jurisdiction to the end, to the exclusion of any. other court. He said:

“This court, having the power to hear and determine the subject-matter in ■ controversy, and having first obtained possession of the controversy, is fully at liberty to retain it until it shall have disposed of it. The general rule is that, as between courts of concurrent and co-ordinate jurisdiction, the court ■ that first obtains possession of the controversy must be allowed to dispose ■ of it without interference from the co-ordinate court. * * * Where a .party is within the jurisdiction of this court, so that on a bill properly filed • here this court has jurisdiction of his person, although the subject-matter ■ of the suit may be situated elsewhere, it may, by the ordinary process of injunction and attachment for contempt, compel him to desist from commencing a suit at law, either in this state or any foreign jurisdiction, and, of course, from prosecuting one. commenced after the bringing of the suit in this court.”

Proceeding then to a discussion of the applicability of section 720 of the United States Revised Statutes, which provides that the writ of injunction shall not be granted by any court of the United States to stay proceedings in any court of' the state, except in cases where • such injunction may be authorized by law relating to proceedings in bankruptcy, he observed that:

“Notwithstanding the very general terms of the prohibition, with the single exception mentioned, it has been settled that it does not apply where '•the federal court has first obtained jurisdiction, or where, the state court having first obtained jurisdiction, the case has been removed to the federal court. In such cases the federal court may restrain all proceedings in a state court which would have the effect of defeating or impairing its jurisdiction. It extends only to cases in which the jurisdiction of the state court 'has first attached. With its proceedings, then, no federal court can interfere by injunction.”

In Fisk v. Railroad Co., 10 Blatchf. 520, Fed. Cas. No. 4,830, the circuit court of the United States for the Southern district of New York issued an injunction restraining that corporation from taking any steps in the state court to procure its own dissolution, ■ and the effect of the statute in question was considered. Judge Blatchford, in deciding the case, said:

“The provision of section 5 of the act of March 2, 1793 (1 Stat. 334), that a writ of injunction shall not be granted to stay proceedings in any court of a state, has never been held to have, and cannot properly be construed to have, any application except to proceedings commenced in a court of a state before the proceedings are commenced in the federal court. Otherwise, after suit brought in a federal court, a party defendant could, by resorting to a suit in a State court, defeat in many ways the effective jurisdiction of per-ison and subjeét-matter. Moreover, the provision of the act of 1793 must be construed in connection with the provision of section 14 of the act of Sep[13]*13tember 24, 1789 (1 Stat. 81), that the federal courts shall have power to Issue all writs which may be necessary for the exercise of their respective jurisdictions. It may properly be considered as necessary for the exercise of the jurisdiction of this court over the corporation in question that it should bo restrained from taking steps in a state court to put itself out of existence.”

Speaking of the case of Dietzsch v. Huidekoper, 103 U. S. 494, 26 L. Ed. 497, in which an action of replevin had been commenced in the state court of Illinois and removed to the circuit court of the United States, he said:

“An injunction was issued, and the supreme court held that it was properly granted, observing that ‘a court of the United States is not prevented from enforcing its own judgments by the statute which forbids it to grant a writ of injunction to stay proceedings in a state court’ It is essentia] to the due administration of justice in the federal courts that they have full power to issue all process necessary for the exercise of their jurisdiction, and such poSver is in explicit terms conferred by the statute upon them.”

In Jesup v. Railroad Co. (C. C.) 44 Fed. 663, it was held that where a railroad under a receivership is sold, and the purchaser assumes the payment of existing debts and liabilities of the receivership, it was the duty of the court to protect the purchaser against all such demands which arc not just and proper against the receiver, and, to that end, to require all such demands to be presented to it for allowance; that where, on the strength of such covenant to the purchaser, a person brings an action in the state court against him to recover for a tort to his realty committed by the receivers, such demand being primarily chargeable on the finid in the hands of the federal court arising from the sale, such court would restrain the prosecution of the action, and require the claimant to present his claim to it, for the reason that a judgment thereon in the state court would entitle him to satisfy it out of any property subject to levy in the hands of the purchaser. The provisions of the decree in that case were, in respect of the question under discussion, much like the provisions of the decree in the foreclosure proceedings herein. In that case it was provided both in the

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Bluebook (online)
110 F. 10, 1901 U.S. App. LEXIS 4831, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-trust-co-v-kansas-city-p-g-r-circtwdmo-1901.