Court Opinion

ID: 8852878
Source: CourtListenerOpinion
Date Created: 2022-11-26 17:19:50.13548+00
Date Added: 2024-06-11T17:05:33.532192
License: Public Domain

PAUL, District Judge
(after stating the facts). The demurrer filed on the ground that the complainants are simple contract creditors, and therefore cannot maintain a suit in equity, cannot be sustained. The deed of trust made by the Bank of Abingdon on the 5th of August, 1S93, is for the benefit of all the creditors of the bank, and gives to all its creditors alike a lien on the assets, real and personal, of the bank. The property convetyed constitutes a trust fund for the payment of all creditors, and under its provisions all creditors of the bank are lienors of the trust property, and any of them can maintain a suit in equity, touching the subject-matter of the trust, as if they were specially mentioned in the trust. I think this position in harmony with the principles laid down in Hollins v. Iron Co., 150 U. S. 371, 14 Sup. Ct. 127; Case v. Beauregard, 101 U. S. 688. Talley v. Curtain, 4 C. C. A. 177, 54 Fed. 43, is a case decided by the circuit court of appeals of this circuit, and the *725facts are in many resjiects similar to the facts in this case. The debts of the complainants are not disputed, but are admitted in the pleadings, but are claimed to be simple contract debts. The demurrer will be over ruled.
To the plea filed in this cause there is no replication, and in such case all the facts well pleaded are considered as admitted. See rule 33, Equity Rules, and notes thereto; Desty, Fed. Proc. 696; rule 38, Equity Rules and notes thereto; Desty, Fed. Proc. 698; Fost. Fed. Prac. (2d Ed.) p. 270, § 157; Rhode Island v. Massachusetts, 14 Pet. 210. The plea shows that at the time this suit was instituted there was pending in the circuit court of Washington county, Va., a chancery suit instituted on the 25th day of January, 1891, by the trustees in the deed of trust of August 5, 1893, against the Rank of Abing-don and all of its stockholders and creditors, including the complainants, for the purpose of administering the assets of said bank, under the direction and with the aid of said state court. It shows that the state circuit court of Washington county, Ya., is a court of concurrent jurisdiction with this court, and that said suit is still pending therein; that, by the institution of that suit, the issuance and execution of process, the jurisdiction of the state court had attached to the parties and to the subject-matter of that suit; and that this court is without jurisdiction as to the matters involved in the stare court, because of the prior existence of a suit in the state court involving the same matters. The question, raised by the plea is one that has been so often determined by the courts, federal and state, that we should have no difficulty in deciding it in the present case.
In Taylor v. Taintor, 16 Wall. 370, the supreme court, speaking by Justice Hwayne, said:
“Where a state court and a court of the United States may each take jurisdiction, the tribunal which first gets it holds it to the exclusion of the other-, until its duty is fully performed, and the jurisdiction invoked is exhausted: and this rule applies alike in both civil and criminal cases. It is, .indeed, a principle of universal jurisprudence that, whore jurisdiction has attached to person or thing, it is, unless there is some provision to the contrary. exclusive in effect until it has wrought its functions.”
Tn Gaylord v. Railroad Co., 6 Biss. 286, Fed. Cas. No. 5,284, the court said:
“We think that there is no other safe rule to adopt in our mixed system of state and federal jurisprudence than to hold that the court which first obtains jurisdiction of the controversy, and thereby of the res, is .entitled to retain it until the litigation is settled.”
The supreme court of Illinois has said:
“As a general principle, in all cases of concurrent jurisdiction, the tribunal which first obtains jurisdiction, of the subject-matter must proceed and finally dispose of it” Mason v. Piggott, 11 Ill. 88.
Case iu Vermont:
“We hold it to he a sound rule of law, based upon the most; salutary principle, that in all cases of concurrent jurisdiction the court that has first possession of the matter should be left to decide it, unless there exists some peculiar equitable ground for withdrawing a controversy from a court of law to a court of chancery, and which disenables the party having the law in *726his favor from bringing his case fairly and fully before a court of law. This principle is founded upon the courtesy which courts of concurrent jurisdiction should exercise towards each other, and may be necessary, as matter of policy, to prevent a conflict in the action of different courts.” Bank of Bellows Falls v. Rutland & B. R. Co., 28 Vt. 477.
The supreme court of Maryland:
“When two courts have concurrent jurisdiction over the same subject-mat-tér, the court in which the suit is first co’mmenced is entitled to retain it. This rule would seem to be -vital to the harmonious movement of courts whose powers may be exerted within the same spheres, and over the same subjects and persons. * * * Any 'other rule will unavoidably lead to perpetual collisions, and be productive of the most calamitous results.” Brooks v. Delaplaine, 1 Md. Ch. 354.
A very full and able discussion of this question is found in the opinion of Justice Field in Sharon v. Hill, 36 Fed. 337. See, also, Ward v. Todd, 103 U. S. 327; Smith v. M'Iver, 9 Wheat. 532; Shelby v. Bacon, 10 How. 56; Freeman v. Howe, 24 How. 450. The court, in addition to the authorities cited, calls attention to section 720 of the Revised Statutes of the United States, which says a writ of injunction shall not be granted by any court of the United States to stay proceedings in any court of a state, except where such injunction is authorized by any law relating to proceedings in bankruptcy. A recent case decided by the circuit court of appeals of the Fifth circuit, in a case coming up from the Eastern district of Louisiana, holds that the prohibition in section 720 of the Revised Statutes extends to all cases over which the state court first obtains juris-, diction, and applies, not only to injunctions aimed at the state court itself, but also to injunctions issued to all parties before the court, its officers, or litigants therein. See Whitney v. Wilder, 4 C. C. A. 510, 54 Fed. 554, 555, and authorities there cited.
The rule to show cause must be dismissed, and the order heretofore entered in this cause, appointing a temporary receiver and granting a restraining order, must be vacated.