decided: March 18, 1895.
APPEAL FROM THE CIRCUIT COURT OF THE UNITED STATES FOR THE EASTERN DISTRICT OF TENNESSEE.
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MR. JUSTICE BREWER, after stating the case, delivered the opinion of the court.
The single question presented by this appeal is that of the jurisdiction of the Federal court to appoint a receiver, and take the railroad property out of the possession of the receiver appointed by the state court. In such cases, as was held in Maynard v. Hecht, 151 U.S. 324, it is essential that the question of jurisdiction alone should be certified to this court from the trial court. But under the authority of United States v. John, 155 U.S. 109, and In re Lehigh Company, 156 U.S. 322, the statement in the last order quoted from the record taken in connection with the petition upon which it was founded must be held to be a sufficient certificate. It is not necessary that the word "certify" be formally used. It is sufficient if
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there is a plain declaration that the single matter which is by the record sent up to this court for decision is a question of jurisdiction, and the precise question clearly, fully, and separately stated. No mere suggestion that the jurisdiction of the court was in issue will answer. This court will not of itself search, nor follow counsel in their search of the record to ascertain whether the judgment of the trial court did or did not turn on some question of jurisdiction. But the record must affirmatively show that the trial court sends up for consideration a single definite question of jurisdiction. And that is here shown. The petition for an appeal is upon the single ground that the court wrongfully jurisdiction of the property, because it was then in the possession of the state court, and in the order allowing the appeal it is explicitly stated that "this appeal is granted solely upon the question of jurisdiction," and the court at the same time reserved to itself the right, which it subsequently exercised, of determining what portions of the proceedings should be incorporated into the record sent here for the purpose of presenting this question.
Had the Circuit Court of the United States, when this property was in the possession of the receiver appointed by the state court, the power to appoint another receiver and take the property out of the former's hands? We are of opinion that it had not. For the purposes of this case it is unnecessary to decide whether, as between courts of concurrent jurisdiction, when proceedings are commenced in the one court with the view of the appointment of a receiver, they may be continued to the completion of actual possession, and whether, while those proceedings are pending in a due and orderly way, the other court can, in a suit subsequently commenced, by reason of its speedier modes of procedure seize the property, and thus prevent the court in which the proceedings were first commenced from asserting its right to the possession. Gaylord v. Fort Wayne &c. Railroad, 6 Bissell, 286-291, cited in Moran v. Sturges, 154 U.S. 256-270 High on Receivers, 3d ed. sec. 50. Of course, the question can fairly arise only in a case in which process has been served, and in which the express object of the bill, or at least one express
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object, is the appointment of a receiver, and where possession by such officer is necessary for the full accomplishment of the other purposes named therein. The mere fact that, in the progress of an attachment or other like action, an exigency may arise, which calls for the appointment of a receiver, does not make the jurisdiction of the court, in that respect, relate back to the commencement of the action.
In Heidritter v. Elizabeth Oil-Cloth Co., 112 U.S. 294, 301, a question was presented as to the time that jurisdiction attaches. Mr. Justice Matthews, after quoting from Cooper v. Reynolds, 10 Wall. 308, and Boswell's Lessee v. Otis, 9 How. 336, observed: "But the land might be bound, without actual service of process upon the owner, in cases where the only object of the proceedings was to enforce a claim against it specifically, of a nature to bind the title. In such cases the land itself must be drawn within the jurisdiction of the court by some assertion of its control and power over it. This, as we have seen, is ordinarily done by actual seizure, but may be done by the mere bringing of the suit in which the claim is sought to be enforced, which may, by law, be equivalent to a seizure, being the open and public exercise of dominion over it for the purposes of the suit."
Undoubtedly the Circuit Court had authority under the bill filed June 6, 1892, to make the order appointing the receiver and taking possession of the property. Even if it were conceded that the bill was imperfect and that amendments were necessary to make it a bill complete in all respects, it would not follow that the court was without jurisdiction. The purpose of the bill -- the relief sought -- was, among other things, the possession of the property by a receiver to be appointed by the court, and when the court adjudged the bill sufficient, and made the appointment, that appointment could not be questioned by another court, or the possession of the receiver thus appointed disturbed. The bill was clearly sufficient to uphold the action then taken.
While the validity of the appointment made by the Circuit Court on June 6, 1892, cannot be doubted, yet, when that court thereafter accepted a bond in lieu of the property,
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discharged the receiver, and ordered him to turn over the property to the railroad, and such surrender was made in obedience to this order, the property then became free for the action of any other court of competent jurisdiction. It will never do to hold that after a court, accepting security in lieu of the property, has vacated the order which it has once made appointing a receiver and turned the property back to the original owner, the mere continuance of the suit operates to prevent any other court from touching that property.
It is true that the Circuit Court had the power to thereafter set aside its order accepting security in place of the property and enter a new order for taking possession by a receiver, yet such new order would not relate back to the original filing of the bill so as to invalidate action taken by other courts in the meantime. Accepting a bond and directing the receiver to return the property to the owner was not simply the transfer of the possession from one officer of the court to another. The bond which was given was not a bond to return the property if the judgment to be rendered against the contractors was not paid, but a bond to pay whatever judgment should be rendered. It was, therefore, in no sense of the term a forthcoming bond. The property ceased to be in custodia legis. It was subject to any rightful disposition by the owner or to seizure under process of any court of competent jurisdiction.
The intervening petitions filed on June 20, July 4, and July 7 are not copied in the record, having been omitted therefrom by direction of the Circuit Court. Evidently, therefore, there was nothing in them which bears upon the question before us, and doubtless they were simply intervening petitions, claiming so much money of the railroad company and containing no reference to the appointment of a receiver.
But it is said that the receiver has no such interest in the property as will give him a standing in the Circuit Court to petition for the restoration of the property to his possession, or to maintain an appeal to this court from an order refusing to restore such possession. This is a mistake. He was the officer in possession by appointment of the state court, the
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proper one to maintain possession and to take all proper steps under the direction of the court to obtain the restoration of the possession wrongfully taken from him. It is a matter of every-day occurrence for a receiver to take legal proceedings, under the direction of the court appointing him, to acquire possession of property or for the collection of debts due to the estate of which he is receiver.
With reference to the contention that all of the parties plaintiffs in the suit in the state court have come into the Federal court, so that in fact the receiver appointed by the state court no longer represents any one -- stat nominis umbra -- it is sufficient to say that it is not borne out by the record. It is true that the plaintiffs in this case filed a petition in the Federal court in which it was alleged that all the parties plaintiffs in the state court had appeared in the Federal court, and that all the claims of these parties except one of Mellon & Sons, who had two claims, had been presented and allowed, and that Mellon & Sons in their intervening petition had set up one of their claims for allowance, and averred that they were prosecuting the other to judgment in the state court, and that they would, when judgment was obtained thereon, also file that for allowance. But the record shows that the order prayed for in this petition was denied by the Circuit Court without any finding as to the truth of the facts therein alleged. We cannot assume, therefore, as against the application of the state receiver, that the allegations in that petition are true. Further than that, the Circuit Court, in directing what should be incorporated into the record to be sent up on this appeal, directed that there should be inserted a "memorandum of all petitions and pleadings filed, giving dates of petitions without setting out same, down to the final decree, except in cases where directed to be copied in full." In pursuance of that order the clerk incorporated in this record a memorandum of the intervening petitions, and in that memorandum there is no mention of any petition on the part of any of the plaintiffs in the state court except Mellon & Sons. It thus affirmatively appears that up to the date of the final decree only one of the several plaintiffs in the state court
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had come into the Federal court. While it is true that in the final decree there is an entry of allowances in favor of these parties, yet there is nothing to show that these allowances were made upon the application of such plaintiffs, or that the amounts allowed to them were the amounts which they claimed, unless this can be implied from the order therein declaring a lien upon the allowances in favor of the counsel of such parties for their services in obtaining the several recoveries. Conceding all that may be inferred from this order, or from anything else that appears in the record, it remains beyond dispute that one claim of Mellon & Sons, for $84,000, is still pending and undetermined in the suit in the state court. But further, the question of right on the part of the petitioner antedates the final decree, and he stands in the Federal court backed by the order of the state court appointing him receiver, and directing him to press this application. If it were true that all the plaintiffs in the state court had abandoned their suit in that court, the remedy was to call the attention of that court to the fact and have an order entered setting aside the appointment of a receiver, or directing the discontinuance of this application. We cannot, in this indirect way, pass judgment upon the action of that court.
It is objected that Judge Sneed had no authority to make the appointment of a receiver, and that the appointment was not made by the chancery court, nor by the chancellor at chambers, nor by any other chancellor or Circuit Court judge of the State of Tennessee. The record does not disclose of what court Judge Sneed was a judge. But we find in 91 Tenn. v, a list of the judges of that State in the year 1892, and the courts of which they were judges. In that list is the name of J. W. Sneed as judge of the Criminal Court of Knox County. That court has, as appears from the statutes, exclusive criminal jurisdiction in that county. It also has common law jurisdiction, and the practice and pleadings in all civil actions are the same as prescribed for the Circuit Courts of the State. It is held by one judge, who takes the same oath of office as other judges. He is paid out of the state treasury, as they are paid, and has power to interchange with
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them in official work. (Secs. 163, 164, 165, 166, Milliken and Vertrees' Code of Tenn. 1884.)
In the same code sections 4714 and 4715 read as follows:
"4714. The judges and chancellors shall have interchangeable and concurrent jurisdiction to grant injunctions, attachments, and all other extraordinary process, issuable out of and returnable to any of the circuit or chancery courts of this State.
"4715. Upon making the requisite fiats for, and granting such extraordinary process, it shall be the duty of the judge or chancellor to enclose the papers accompanying the application and the order made, in a sealed envelope, directed to the clerk of the court to which the fiat is directed, which envelope shall be opened only by the clerk or his deputy."
Obviously the action taken by Judge Sneed was under the authority of these two sections, and they seem broad enough to sustain it. No decision of the Supreme Court of the State has been called to our attention bearing upon this question, or construing "judges" to mean only "Circuit Court judges." At any rate, the validity of his action was recognized by the chancellor, who treated his fiat as one made by proper authority; and as the chancery court had unquestioned jurisdiction over all proceedings in equity, including bills for receivers, we must assume that Judge Sneed's order was valid, and the appointment of a temporary receiver by him authorized by the laws and practice of the State.
It is further objected that the proceedings in the Federal court have moved on to a final decree by which various liens have been determined, and that it would be a great hardship to now declare the order appointing the receiver, and assuming possession of this property, beyond the jurisdiction of the Federal court. It is a sufficient reply to this that all the parties who sought to enforce their rights in the state court have not come into the Federal court, and submitted their claims to its jurisdiction. Some are still pursuing their remedy in the forum which they selected, and whatever of hardship there may be, whatever of expense may result, must fall upon the parties who have thus wrongfully secured the taking away of the possession of this property from the custodian rightfully
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appointed by the state court. The mere forcible continuance of possession by the Federal court does transform that which was in the first instance wrongful into a rightful possession.
The case, therefore, must be remanded to the Circuit Court for further proceedings not inconsistent with this opinion.
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