Court Opinion

ID: 6863584
Source: CourtListenerOpinion
Date Created: 2022-07-23 20:51:44.057306+00
Date Added: 2024-06-11T08:50:05.897515
License: Public Domain

BUFFINGTON, Circuit Judge
(dissenting).
In the present case the bank, as a part of its own business and for its own profit, undertook the administration of a mortgage trust which it created and, in pursuance thereof, segregated mortgages for the protection of the cestuis que trustent, to whom it sold, for its own profit, participation in said trust. In the administration of this trust, the deposited mortgages proved unsufficient to meet the interest requirements of the trust certificates and the bank, voluntarily, and to preserve its own credit, paid some $40,000 to meet the interest shortage. At this point we note the receiver had the right thereafter to invoke the jurisdiction of the local District Court to aid in the liquidation of its affairs. Instead of itself proceeding to liquidate and invoking the jurisdiction of the District Court if required, and desiring to be wholly relieved of the mortgage trusts, the receiver, presumably — if not indeed certainly — with the consent of the Comptroller, voluntarily assigned and handed over all the mortgages it held to secure the cestuis que trustent, to the orphans’ court of Allegheny county, which is qualified to administer trusts, and, as stated in the receiver’s brief (the italics mine) “thereupon, with the consent of plaintiff’’ (the receiver) “the orphans’ court removed the bank as trustee of the mortgage pool and appointed the Commonwealth Trust Company of Pittsburgh as trustee, as successor to the Bank of Pittsburgh, and the assets of the mortgage pool were then delivered to the Commonwealth Trust Company.” In my view, the receiver, by joining in such application, became a party to the cause in the orphans’ court and his rights to the res or any part thereof were submitted to the adjudication of that court, for, as was held by the Supreme Court in Farmers’ Loan & Trust Co. v. Lake St. Elevated R. Co., 177 U. S. 51, 20 S. Ct. 564, 568, 44 L. Ed. 667:
“The possession of the res vests the court which has first acquired jurisdiction with the power to hear and determine all controversies relating thereto, and for the time being disables other courts'of co-ordinate jurisdiction from exercising a like power. This rule is essential to the orderly administration of justice, and to prevent unseemly conflicts between courts whose jurisdiction embraces the same subjects and persons.” And, as said in Covell v. Heyman, 111 U. S. 176, 4 S. Ct. 355, 358, 28 L. Ed. 390: “When one takes into its jurisdiction a specific thing, that res is as much withdrawn from the judicial power of the other as if it had been carried physically into a different territorial sovereignty. * * * The regulation of process, and the decision of questions relating to it, are part of the jurisdiction of the court from which it issues.”
In administering the trust, the orphans’ court ordered no payment of interest or principal to the bank, both of the excess mortgages the bank had deposited in the pool and also of the cash which it had voluntarily advanced. In the face of these times of depression, and especially of real estate mortgages, this was a precautionary measure wisely exercised by the orphans’ court in its primary duty to the cestuis que trustent who held certificates, issued by the bank, in this mortgage pool, for, as correctly stated by this court in its opinion, “To insure that the pool shall have a safe head at all times, more mortgages are placed in it than certificates issued, making an excess of mortgage values such as the one in question in this case.” If the receiver was aggrieved by this nonaction of the orphans’ court, his remedy in due course was apparent, namely, to apply to the orphans’ court for payment, and if this was denied then to appeal to the higher courts of the state from the orphans’ court’s decision, and if his rights were federal ones — he states in his bill he is “receiver of a national bank and is therefore a federal officer” — and those rights were denied him, he could ultimately find relief in the Supreme Court of the United States. Instead of resorting to such course, the receiver invoked the jurisdiction of the District Court below and filed his bill praying, inter alia,
*97“(b) That the right of plaintiff to receive out of the assets comprising the Mortgage Pool the sum of $291,020.45, with interest, and the sum of $40,213.58 with interest, be ascertained and adjudicated by the Court and that the Commonwealth Trust Company of Pittsburgh, Trustee, be directed to pay to plaintiff out of the first funds received by it in connection with the liquidation of the Mortgage Pool, the amounts so adjudicated to be due and payable to it as aforesaid.
“(c) That the Commonwealth Trust Company of Pittsburgh, as Trustee, of said Mortgage Pool, be required to account for all its receipts and disbursements as such Trustee and for all property now in its hands or under its control or held in connection with the Mortgage Pool.”
In view of the facts, it would seem clear that every element of comity, consent to the orphans’ court jurisdiction, surrender of the res, and possession thereof by the orphans’ court, all united to constrain the court below to dismiss the belated bill of the receiver, which in reality was not a bill to ascertain the amount of the bank’s claims — -for as to the amount thereof there was no dispute — but was filed, as quoted above from its prayers, to oust the jurisdiction of (he orphans’ court. In my judgment, the bill should have been dismissed, and I am constrained to record my dissent to this court’s action in not so doing.