Court Opinion

ID: 9302827
Source: CourtListenerOpinion
Date Created: 2022-12-02 17:13:55.194824+00
Date Added: 2024-06-11T17:13:44.841514
License: Public Domain

JONES, District Judge
(after stating the facts as above). It is first insisted that the restraining order by the federal court in Rhode Island ought not to be respected here, because the judgment remains unexecuted in this court, and that it is for this court only, whose process on final judgment, after the expiration of the term, must issue as of course, in the absence of further direction from it, to determine whether equities between the parties to the judgment authorize or require stay of execution. Next, it is contended that the bill in Rhode Island on which the restraining order issued, according to the evidence before this’court as to its contents and purpose, is without equity; and for this reason, also, this court should not recognize, or compel the parties to abide by, the restraining order.
It is the equity of set-off against the judgment, and authority over the subject-matter and person, not the forum in which the judgment remains unexecuted, which determines jurisdiction to enjoin its collection. If the United States court in Rhode Island obtained jurisdiction of the subject-matter and the parties, its restraining order would not *842be void, since the bill on which it issued is not open to collateral assault. The relief sought by the defendant against the plaintiffs in the judgment is undoubtedly of equitable cognizance, and the amount involved is sufficient to give jurisdiction. The defendants to the suit in Rhode Island are citizens and residents of that state. The complainant in that suit, the defendant in the judgment here, is a citizen of New Jersey. The federal court in Rhode Island, finding the plaintiffs in this suit within its territorial jurisdiction, could, at the instance of a citizen of another state, and by decree operating in personam, charge the consciences of the plaintiffs in this suit, who are citizens of Rhode Island, with the duty not to proceed further in the litigation here, and enjoin upon them not to do so, though the act forbidden to be done can be performed only in another jurisdiction, and relates solely to their enforcement of a legal right in the United States court in Alabama. The federal court in Rhode Island and the federal court in Alabama having concurrent jurisdiction to enjoin the issue of execution in aid of the equity asserted by the Water Power Company, the Water Power Company could file its bill, in the first instance, either in this court as an ancillary proceeding, or in the federal court in Rhode Island as an original proceeding. The restraining order made in Rhode Island does not attempt to control the action of this court, or of any of its officers, as to this judgment, or to deal in any degree with the status of any res in the grasp of this court. It operates only in personam on the plaintiffs here. It is inequitable, under the law and policy of both forums, for an insolvent plaintiff to coerce the collection of his debt from a defendant to whom he is indebted in a larger amount.
Decrees in personam made in another forum, when it has jurisdiction of the subject-matter and parties, though offered only as matter of evidence, will, from considerations of comity, be respected in the forum where the judgment remains, when they do not antagonize the laws and policy of the latter forum, or injuriously affect the rights of suitors therein. It would be an unseemly spectacle for a court of justice here, if it has any discretion in the premises, .to permit a suitor to enforce in it a right which another court of co-ordinate authority, having jurisdiction of the subject-matter and person, solemnly forbade him to press here, when such decree violates neither the law nor policy of the domestic forum, nor injuriously affects the rights of suitors therein. This court, even at law, certainly has a discretion, which it ought to exercise, not to lend its own process to such suitor, when he comes before the court here, to enable him to evade and nullify the effect of such a decree in personam rendered against him elsewhere.
The equity powers of this court have not been invoked by any bill filed here. The issues raised on the law side of the docket are: (x) Over the right of the plaintiffs to have execution generally; (2)"tlie right of attorneys in their own behalf to have issue of execution to enforce their lien; (3) the right of the defendant, because of its equitable set-off, to have the law court, on motion on the law side, to stay execution until the termination of the lawsuit between the parties in Rhode Island. The only reason now offered by the defendant why its motion for the stay of execution should be granted by the law court here, and why the separate motions of the plaintiffs and their attorneys *843for the issue of execution should be denied, is that the United States court in Rhode Island, on bill filed there by the defendant against the plaintiffs to enforce an equitable set-off, has restrained the plaintiffs, their attorneys and agents, from taking any steps to collect the judgment here. The motion of the defendant here for stay of execution is therefore, in substance and legal .effect, a motion for a temporary injunction by the law court here, on the bill filed in Rhode Island, in aid of the equitable right of set-off. If the matters now urged by the defendant had been formally set up by bill in equity here, and the equity powers of this court properly invoked, it could not, upon the evidence submitted to the court, order a preliminary injunction. The pivotal fact upon which the equity of the defendant turns is the insolvency of the plaintiffs, and consequent danger, if the judgment in their favor here be enforced, that the defendant will lose the fruit of the judgment it may obtain against the plaintiff in the lawsuit in Rhode Island. No evidence whatever is offered that the plaintiffs are insolvent. It is alleged in the motion before this court, and doubtless in the bill filed in Rhode Island, that they are insolvent. This allegation is formally denied by the plaintiffs here, and the burden of proof as to it certainly rests upon the defendant here. Besides, it is not denied that the defendant has the security of a bond for $50,000, given by a solvent surety company for the faithful performance of the contract, for the breach of which defendant is pursuing the plaintiffs in an action at law in Rhode Island. It is also shown by affidavit, not controverted, that the defendant in the judgment here, in its lawsuit in Rhode Island, has attached property there of the plaintiffs, defendants in that action, whose reasonable market value, exclusive of incumbrances, is over $too,ooo, to answer whatever judgment may be obtained in the lawsuit in Rhode Island. Certainly the defendant owes the plaintiffs the amount of the. judgment recovered here by the plaintiffs. It is not claimed that plaintiffs, on settlement of the account between them and defendant, owe the defendant more than $97,000. If the defendant is coerced to pay the judgment, it still has the security of a $50,000 bond, and attached property worth $100,000, out of which to secure the $97,000 which, on settlement of the transactions between them, would be due the defendant. There is no reasonable probability of the defendant’s losing its debt in any event, even if the insolvency of the plaintiffs were shown. Conceding, as is true in Alabama, that an attorney, having a lien on a judgment for professional services in obtaining it, is treated as an assignee to the. extent of his lien of a nonnegotiable security, and that this lien will be defeated by set-off existing in favor of the defendant prior to the rendition of the judgment, it suffices to say that there is no proof before the court of any such set-off to defeat the lien claimed here.
Again, the attorneys, by their motion at law for the issue of execution, first asserted, as they had a right to do in this court, a legal remedy, on the law side of the docket, for the enforcement of their lien, before the bill was filed in Rhode Island. Of this legal right, which concerns the enforcement of a lien, the law court here first obtained jurisdiction. The law court here had no right to refuse them execution for such a purpose, especially when the plaintiff in the judg*844ment does not interpose objection. If there be equities — and we have seen here on the proof that there were none — which can defeat the .right to coerce satisfaction of the judgment to the extent of the lien, the attorneys, having first commenced legal proceedings here to that end, cannot be deprived of the right to pursue such remedies at law, except by bill on the equity side of the docket here, or in some other .'court which has jurisdiction of the subject-matter and parties, and to which the attorneys are defendants. The judgment not being in ,Rhode Island, the attorneys not being citizens of that state, or found .therein, the court had no jurisdiction over them or their rights, save las it could indirectly affect them by charging the consciences of the ■plaintiffs and restraining their personal action. Doubtless, for that reason, the attorneys were not made parties to the equity suit in Rhode Island. These considerations, however, could not prevent the filing Of such a bill here. Without such a bill filed, either here or elsewhere, the law court here has no right to restrain the attorneys. It is proper -to'add, in this connection, that the high character of the attorneys for the Water Power Company, and the misunderstanding on their part, in consequence of what took place in open court, as to where this court expected the bill to be filed, when it granted delay for that purpose, .■acquits them of any intention or purpose to take advantage of this . court by filing their bill and obtaining the restraining order in Rhode Island.
It is insisted that this court should exercise its legal rights over its process at law out of comity to the federal court in Rhode Island, so as to prevent the attorneys from having the process they asked here at law. If the attorneys had been defendants to that bill, the insistence would have great weight. To extend that measure of comity in this ■ instance would require the law court here so to use its discretion over its process at law as to eject from its portals resident suitors who have rightly invoked its power to enforce a lien, compel them to abandon their proceedings here, and renew them in a distant state, there to abide • the event of litigation, which may be long protracted, and to which they are not parties. The hardship resultant from such, an exercise of discretion is apparent; while on the other hand it would involve no hardship to require the Water Power Company, which, though a legal .entity in New Jersey, is in everything except legal fiction an actual, resident here, to insist upon its equities, as against the attorneys’ lien, by proper bill filed in this court. This it has declined to do. Its ■attitude does not command the favorable ear of the court to its insistence for comity, which, though in form proposed in behalf of the -court in Rhode Island, is, in effect, asked to be extended to defendant. That court will hardly consider this court lacking in comity to it because it refuses, in the exercise of its discretion, to so use its process at law as to enable the defendant here to wage litigation there with the attorneys, which should be carried on here against resident suitors before this court, who are not subject to the jurisdiction of the court in Rhode Island, or made parties to the litigation there. The attorneys were restrained .in that suit only in their representative capacity as attorneys, and not as to the assertion of any independent individual rjght of their own in the judgment.
*845Unlike the attorneys, Chapman & Co. are defendants, and in their own right, to the suit in the United States court in Rhode Island, subject to its jurisdiction, and have been restrained by it. Their legal rights here are not attacked, and are conceded by the bill there. They have all along insisted that this court, on the law side of the docket, had ho jurisdiction to enforce the’equity asserted by the defendant, or to stay its process at law in aid of that equity, which they insisted could he done only under the equity powers of this court, when properly invoked on bill filed here. The attempt of the defendant here to interpose the equitable set-off on the law side of the court was abandoned in consequence of the plaintiffs’ insistence, and the court’s decision that it was well founded. That equity has not again been attempted to be set up here by bill, or otherwise than by putting the proceedings in Rhode Island in evidence. Plaintiffs are hardly in condition to insist that this court should retain jurisdiction of this matter in order to pass upon defendant’s equity. An unsuccessful attempt to enforce a purely equitable set-off against a legal right in a law court is not res ad judicata as to such right of set-off, and does not prevent its subsequent assertion by a bill in equity. It is no hardship upon Chapman & Co. to litigate this matter in their home forum with the Water Power Company. In doing so, they take nothing to that court which really belongs here. For these reasons, but mainly because of the order of the federal court in Rhode Island, this court, in the exercise of its discretion over its legal process, declines, when moved by Chapman & Co., to so use that process as to enable them to defeat or defy the order of a federal court of co-ordinate jurisdiction, which, having jurisdiction of the subject-matter and parties, has solemnly forbidden Chapman & Co. to come here at all to enforce this execution.
Counsel may prepare an order that issue of execution be stayed upon the payment of the amount of the attorneys’ lien into this court within six days, and, if that is not done, execution shall issue; hut all moneys realized, in that event, in excess of the amount of the attorneys’ lien, shall be put in the registry of the court, there to remain until withdrawn upon its further order.