Source: https://supreme.justia.com/cases/federal/us/173/443/
Timestamp: 2019-04-19 00:59:27+00:00

Document:
On the facts stated in the opinion, the Court holds that the plaintiff in error, a New York corporation, having, of its own motion, sought to litigate its rights to a state court of Louisiana and having been given the opportunity to do so, no federal question arises out of the fact that the litigation then resulted unsuccessfully and without the decision of a federal question which might give this court jurisdiction, following Eustis v. Bolles, 150 U. S. 370, in holding that when a state court has based its decision on a local or state question, the logical course here is to dismiss the writ of error.
It is objected that the record presents no federal question.
In an action brought in the Civil District Court for the Parish of Orleans, State of Louisiana, John Watson, one of the defendants in error, was appointed on the 17th day of May, 1893, receiver of the property and assets of the Louisiana Printing & Publishing Company, a corporation created under the laws of the State of Louisiana. As such receiver, he took possession of such assets and property. There was no appeal taken from the order of appointment.
authority of which, on the 29th day of May, 1893, the United States marshal seized certain property of the company and took the same from the possession of Watson.
"Let this rule be filed, and let the Remington Paper Company, through their attorneys, Merrick & Merrick, show cause on Thursday, June 1, at 11 a.m., why the above motion should not be granted."
"The plaintiff in this case, for the purpose only of objection to the regularity of the rule taken by John W. Watson, calling himself receiver, by way of exception, says:"
"That said mover, as a pretended receiver, cannot interfere in the progress of this suit in the informal and summary manner attempted by him in his said rule; nor has he any right to be heard to demand by the judgment of this court anything of this court, without coming into court by regular process and proceedings, and in the mode allowed by law, wherein the plaintiff will be entitled to a trial of questions of law and fact in the mode and manner guarantied by the Constitution and prescribed by law."
"Wherefore this plaintiff says that this rule taken by said John W. Watson should and ought to be dismissed at the cost of said mover."
hinder or delay your petitioner from collecting its just debt against said defendant."
The plaintiff prayed the court to decide the exception to said rule before proceeding further or hearing any testimony on the rule taken.
"This cause having been heard and submitted upon a rule taken by john W. Watson, appointed a receiver of the defendant by the Civil District Court for the Parish of Orleans, to set aside the writs of attachment and sequestration issued in this cause, and upon the exception thereto filed by the plaintiff, and the same having been considered by the court, it is now ordered, for the reasons assigned in the written opinion on file, that the marshal restore the property seized in this cause under the writs of attachment and sequestration to John W. Watson, receiver, unless within five days the plaintiff applies for and ultimately receives authority from the civil district court which appointed Watson, or from the appellate court, to hold same under said writs."
"appointed receiver upon a petition of a creditor, and in the intervention of the Attorney General, which original and intervening petitions averred that all the officers of the defendant corporation had resigned, and that in fact it was a vacant corporation."
has jurisdiction of a cause and property, and through its proper officer is in possession, it is the duty of all other courts to refrain altogether from the attempt to take that property into possession except by permission of the court in possession. It is not a question of the validity of process, but a question of public order, and the rule of comity is based upon the duty of courts to abstain from anything that might lead to violence. There having been a receiver appointed by a court of competent jurisdiction, and he being in possession of the property attempted to be seized by the marshal, and which was in fact seized, I think the duty of this court is to restore the property practically to the situation in which it was when the property was interfered with by the marshal."
The bill of exceptions signed by the circuit judge shows that Watson was in possession of the property, engaged in making an inventory of it when it was seized by the marshal, and had taken the oath of office, but had filed no bond.
On the 9th day of June, 1893, three days after the order of the circuit court, the Remington Company filed in the Civil District Court for the Parish of Orleans a petition and action of nullity, and for damages, under the laws of the state, against Watson, receiver, Pope, petitioning creditor, and the Louisiana Printing & Publishing Company.
screen the property from payment of debts was collusive and a constructive fraud upon petitioner, and a violation of its rights under the laws and Constitution of the United States of America;"
that the order appointing him was null and void, because obtained "upon the collusive petition of Frank J. Pope, without citation to anyone, without oath or affidavit, or any proof, and without contest."
It was further alleged that the so-called intervention of the Attorney General did not cure the nullity of the proceedings of Pope and Watson, and that the state was without authority to intrude itself in that manner into the controversies of private persons. There was a prayer for citation, and that the order appointing Watson receiver be declared, as against petitioner, null and void and of no effect, and the same be ineffectual as a bar to said attachment or sequestration or other proceedings on the part of the petitioner in the circuit court of the United States, and that said Watson and Pope be condemned, as in solido or otherwise, to pay petitioner the sum of $3,863.55, damages caused it by the obstruction of its proceedings in the circuit court, and for general relief.
writs from said circuit court of the United States, and said defendants seek through said void ex parte order of 17th day of May, 1893, to effect the transfer and _____ of the possession and property of said Louisiana Printing & Publishing Company under the seizure of petitioner under its writs to said John W. Watson, thereby screening the same from ordinary and legal pursuits of creditors in the modes pointed out by law, in violation of the Fifth and said Fourteenth Amendments of the Constitution of the United States."
"unlawful and unwarranted seizure of the property of said Louisiana Printing & Publishing Company, Limited, which seizure has been released, said Remington Paper Company has damaged the creditors of said Louisiana Printing & Publishing Company, Limited, for whose benefit, ut universi, this reconventional demand is now prosecuted."
The damages were itemized, and alleged to have amounted to $3,847.15.
"Wherefore said John W. Watson prays that said plaintiff's petition be dismissed, that he be quieted in his position as receiver, that his appointment be ratified and confirmed as prayed for by said Louisiana Printing & Publishing Company, and by a large majority of its stockholders and its board of directors, and that, as the representative of the creditors of said company, he have judgment on his reconventional demand against plaintiff in the sum of $3,847.15 and all costs of this suit."
"1st. In favor of John W. Watson and Frank H. Pope, rejecting and dismissing the suit of the Remington Paper Company for damages."
"2d. That the demand of the Remington Paper Company against John W. Watson, Frank H. Pope, and the Louisiana Printing & Publishing Company, represented by John W.
Watson, receiver, of the nullity of the order appointing said Watson receiver, etc., be also rejected and dismissed, and that said appointment and order be maintained."
"3d. That the reconventional demand for money claimed by Watson as receiver herein be dismissed as of nonsuit, and that the Remington Paper Company be condemned to pay all costs of this suit."
The supreme court affirmed the judgment (49 La.Ann. 1296), and the case was brought here.
"In the first place, addressing ourselves to the question of damages, we are of opinion that the plaintiff was plainly at fault in not employing the proper means to protect its own rights, (1) first, because it used no effort to avail itself of the permission granted by the circuit court whereby the seizure might have been retained on the property, (2) second, because it took no means or proceedings looking to the protection and preservation of its alleged vendors' lien upon the property after it had passed into the custody and control of the receiver, either by injunction against a sale by the receiver or a third opposition claiming the proceeds of sale under a separate appraisement and sale."
"In our view, such measures could have been easily resorted to on the part of the plaintiff without prejudice to this or its circuit court suit, and, failing in this, an insurmountable obstacle has been raised to its claim for damages."
"For surely the plaintiff cannot be heard to say that Watson and Pope have perpetrated upon it damages resulting from a loss and injury it has occasioned through its own fault."
lien was just as efficacious against it in the hands of the receiver as it was in that of the marshal, and, had it made proper and seasonable application to the judge a quo, possibly he might have permitted the marshal to retain in his possession the property seized under the writ of attachment in the circuit court. However vain and nugatory such an effort may have proven, it was nonetheless its duty to have made the effort, at least."
"Surely the receiver cannot be said to have committed a wrong or trespass upon the plaintiff's rights by advertising and making a sale of corporate assets in pursuance of an order of court to pay debts, especially when such sale was neither enjoined or opposed by it."
"Presumably the proceeds of the sale are yet in the hands of the receiver for distribution according to law, and plaintiff can exercise its rights thereon."
"In our opinion, this is not a case in which we are called upon to examine and scrutinize the legality of the appointment of a receiver, for the reason that the complaining creditor has not suffered any injury thereby, and is itself seeking a preference."
"We think the ends of justice would be best subserved by preserving and maintaining the status quo."
The assignments of error are somewhat involved in statement, but they are based on the ground that the order appointing Watson receiver was null and void because the ownership of property of the Louisiana Printing & Publishing Company, the debtor of plaintiff, "could not be divested, to the prejudice of creditors, on an arbitrary order without due process of law," and the use of such order to obtain the ruling of the United States circuit court, which directed the United States marshal to restore to him the property attached, deprived the plaintiff in error of a right without due process of law, and that therefore the judgment of the lower court was erroneous.
the invalidity of the order of appointment is asserted because it was made ex parte, and because Watson had not fully qualified. It is hence argued that the appointment was a nullity -- constituted "no legal obstacle" to the proceedings in the United States circuit court.
"that the marshal restore the property seized in this court under the writs of attachment and sequestration to John W. Watson, receiver, unless within five days the plaintiff applies for, and ultimately receives, authority from the civil district court which appointed Watson, or from the appellate court, to hold same under said writs."
If this was error, its review cannot be had on this record.
The plaintiff did not apply to "the civil district court which appointed Watson," the supreme court, in its opinion, says, but brought an action for nullity of the order of appointment under the Code of the state (Code of Practice of Louisiana, Art. 604 et seq.), and for damages.
The action was regularly proceeded with, and was determined against plaintiff in error on grounds which did not involve federal questions, and therefore it is not within our power to review the judgment of the supreme court of the state.
The plaintiff in error thus sought in the state court, and was given, opportunity to litigate the rights claimed by it, and it cannot complain that the guaranties of the Constitution of the United States were denied because the litigation did not result successfully. Central Land Co. v. Laidley, 159 U. S. 112; Walker v. Sauvinet, 92 U. S. 90; Head v. Amoskeag Manufacturing Co., 113 U. S. 9, 113 U. S. 26; Morley v. Lake Shore &c. Railway Co., 146 U. S. 162, 146 U. S. 171; Bergemann v. Backer, 157 U. S. 655.
It follows that this writ of error cannot be maintained.
question, and when the state court has based its decision on a local or state question, our logical course is to dismiss the writ of error."
See also Fort Smith Railway v. Missouri, 156 U. S. 478; Hamblin v. Western Land Co., 147 U. S. 531; Castillo v. McConnico, 168 U. S. 674.
MR. JUSTICE WHITE took no part in this decision.

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