Sullivan v. Title Guarantee & Trust Co.

167 F.2d 393, 1948 U.S. App. LEXIS 2447
CourtCourt of Appeals for the Second Circuit
DecidedApril 2, 1948
DocketNo. 204, Docket 20934
StatusPublished
Cited by14 cases

This text of 167 F.2d 393 (Sullivan v. Title Guarantee & Trust Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sullivan v. Title Guarantee & Trust Co., 167 F.2d 393, 1948 U.S. App. LEXIS 2447 (2d Cir. 1948).

Opinion

CLARK, Circuit Judge.

The important issue before us on this appeal is the validity of an injunction granted by the district court restraining the defendants from taking further proceedings to settle their account as testamentary trustees before the Surrogate’s Court of Kings County, State of New York. Thus we are brought to the exceedingly delicate realm of interference by the federal courts with state court action in fields of law normally and historically local. At least since Toucey v. New York Life Ins. Co., 314 U.S. 118, 62 S.Ct. 139, 86 L.Ed. 100, 137 A.L.R. 967, made clear the very narrow limits of such federal power of interference, federal judges have been on notice to avoid such injunctions except in certain narrowly limited and specific cases. The present is asserted to be such a case, for this action, based on the diverse citizenship of the parties, to compel testamentary trustees to account and to deliver over the trust property to the plaintiff as ultimate beneficiary, was instituted before the defendant trustees submitted their accounting to the state Surrogate’s Court. It is claimed, therefore, to come within the exception stated in the Toucey case, 314 U.S. 118, 135, 136, 62 S. Ct. 139, 86 L.Ed. 100, 137 A.L.R. 967, that it is a federal action which is both in rem against property and prior to any [394]*394State action. Both these circumstances must concur to justify the injunction.

Since the Toucey case was decided, there seems not to have been any reported case in the federal courts where an injunction involving proceedings in a state probate court has been sustained.1 This of course is not conclusive that there should be no such action, but it is highly indicative of the hesitancy now shown by the federal courts in entering into this conflict of jurisdiction. In Princess Lida of Thurn and Taxis v. Thompson, 305 U.S. 456, 462, 467, 59 S.Ct. 275, 83 L.Ed. 285, decided only slightly earlier, it was said that an action for an accounting against trustees was to be considered quasi in rem; but this had immediate reference to a state court proceeding against the trustees, involved an analysis of the state statutes of Pennsylvania, and actually resulted in the reversal of a federal court injunction against the state court proceeding. Mandeville v. Canterbury, 318 U.S. 47, 63 S.Ct. 472, 87 L.Ed. 605, was also a reversal of a federal injunction against state procedure, the exact holding being that the prior federal action was only an in personam suit for the recovery of money, even though the original relief prayed for was “that the court, after construing the will, render a decree determining respondent’s rights in the trust property and directing the trustee to account and to turn over to respondent his share in the trust property.” Hence the effect of the decision was to allow the earlier federal and the later state court actions to proceed concurrently. In Markham v. Allen, 326 U.S. 490, 495, 496, 66 S.Ct. 296, 299, 90 L.Ed. 256, while petitioner appears to have sought an extensive judgment, yet the judgment actually rendered in the district court was a direct declaration only of petitioner’s right to receive an estate. The Supreme Court, pointing out that this judgment left undisturbed the orderly administration of the estate, allowed the action to proceed concurrently with the state proceedings, although Mr. Justice Rutledge thought that the district court should merely retain jurisdiction “pending the state court’s decision as to the persons entitled to receive the net estate.”

Obviously the Court is disclosing a substantial reluctance to construe a federal action as “in rem” or so broadly inclusive as to set at naught the normal jurisdiction of the specialized state court. Moreover, it has always declined to exercise jurisdiction which it held purely probate, and has not hesitated to restrict a bill in equity asking for more extensive relief to only those remedies which will not interfere with ordinary probate settlement of an estate. Waterman v. Canal-Louisiana Bank & Trust Co., 215 U.S. 33, 47, 50, 30 S.Ct. 10, 54 L.Ed. 80; Sutton v. English, 246 U.S. 199, 38 S.Ct. 254, 62 L.Ed. 664; Byers v. McAuley, 149 U.S. 608, 13 S.Ct. 906, 37 L.Ed. 867; Markham v. Allen, supra, 326 U.S. 490, 494. Finally, even in the one situation of justifiable interference, namely where the federal action is both prior in point of time to the state proceeding and is in rem, it is now settled that jurisdiction is not compulsory, but may be declined in favor of a more effective state remedy. This was established in cases involving proceedings to wind up corporations, Penn General Casualty Co. v. Pennsylvania, 294 U.S. 189, 55 S.Ct. 386, 79 L.Ed. 850; Pennsylvania v. Williams, 294 U.S. 176, 55 S.Ct. 380, 79 L.Ed. 841, 96 A.L.R. 1166, and continued with reference to receiverships, Kelleam v. Maryland Cas. Co. of Baltimore, Md., 312 U.S. 377, 382, 61 S.Ct. 595, 85 L.Ed. 899. Ultimately, as we have seen, it was considered in Markham v. Allen, supra, as applicable to probate proceedings. See 1 Moore’s Federal Practice, § 3.05, as well as the long discussion in his 1942 Cum.Supp., 302-372, particularly at 322-336, 367, 371.

These views have been followed consistently in the lower federal courts. Thus jurisdiction has been refused altogether where the state law localizes it in one [395]*395court. Kittredge v. Stevens, 1 Cir., 126 F. 2d 263, certiorari denied 317 U.S. 642, 63 S.Ct. 34, 87 L.Ed. 517; Spears v. Spears, 6 Cir., 162 F.2d 345, certiorari denied 332 U.S. 768, 68 S.Ct. 78; Guilfoil v. Hayes, 4 Cir., 86 F.2d 544, certiorari denied 300 U.S. 669, 57 S.Ct. 511, 81 L.Ed. 876; Lathan v. Edwards, 5 Cir., 121 F.2d 183. Concurrent action is permitted, however, where there is not interference with state court proceedings and the local law is not so restricted. Blacker v. Thatcher, 9 Cir., 145 F.2d 255, 158 A.L.R. 1, with extensive annotation 9-76, certiorari denied 324 U.S. 848, 65 S.Ct. 686, 89 L.Ed. 1409; Rosenberg v. Baum, 10 Cir., 153 F.2d 10; Rogers v. Girard Trust Co., 6 Cir., 159 F.2d 239; Garrett v. First Nat. Bank & Trust Co. of Vicksburg, Miss., 5 Cir., 153 F.2d 289; Kimball v. New England Trust Co., D.C.Mass., 68 F.Supp. 95. See also Albanese v. Richter, 3 Cir., 161 F.2d 688, certiorari denied 332 U.S. 782, 68 S.Ct.

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Bluebook (online)
167 F.2d 393, 1948 U.S. App. LEXIS 2447, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sullivan-v-title-guarantee-trust-co-ca2-1948.