American Brake Shoe & Foundry Co. v. Pere Marquette R. Co.

• Decision Date: 08 March 1922
• Docket Number: 5467.
• Citation: 278 F. 832
• Parties: AMERICAN BRAKE SHOE & FOUNDRY CO. v. PERE MARQUETTE R. CO. Petition of PERE MARQUETTE RY. CO.
• Court: U.S. District Court — Eastern District of Michigan

278 F. 832

AMERICAN BRAKE SHOE & FOUNDRY CO. v. PERE MARQUETTE R. CO.

Petition of PERE MARQUETTE RY. CO.

No. 5467.

United States District Court, E.D. Michigan, Southern Division.

March 8, 1922

Parker Shields & Seaton, of Detroit, Mich., for petitioner.

Smurthwaite & Campbell, of Manistee, Mich., for respondent.

TUTTLE District Judge.

This in an intervening petition of the Pere Marquette Railway Company, the purchaser of the assets of the Pere Marquette Railroad Company at the master's sale herein, seeking to restrain the above-named respondent from collecting a certain judgment obtained by respondent against petitioner in a Michigan state court. The matter has already been before the court on a petition by this petitioner to compel said respondent to litigate in this court the controversy which has resulted in said judgment. This court denied the former petition, and remanded the proceedings to the state court mentioned; in the course of its opinion (263 F. 237), using the following language:

'I am of the opinion that petitioner has misconceived the nature and extent of the power and duty of this court in the premises. Section 66 of the Judicial Code (section 1048, West's United States Compiled Statutes of 1916) provides as follows: 'Every receiver or manager of any property appointed by any court of the United States may be sued in respect of any act or transaction of his in carrying on the business connected with such property without the previous leave of the court in which such receiver or manager was appointed; but such suit shall be subject to the general equity jurisdiction of the court in which such manager or receiver was appointed so far as the same may be necessary to the ends of justice.'

'Petitioner, of course, under the circumstances of the present case, is liable, or otherwise interested, in this matter only because it has succeeded to the rights and obligations of the receivers heretofore appointed by this court and now occupies their former position with respect to liabilities arising out of their acts in carrying on the business connected with their duties as such receivers; and the terms of the statute just quoted are now as fully applicable to said petitioner as they would have been to the receivers whom they have succeeded, if the latter had not been discharged, and they, instead of petitioner, had been sued in respect of the alleged negligence of their servants in the suit which is the subject of this controversy. This suit was properly brought in the state court, and the latter has full jurisdiction to determine all of the issues involved therein without interference by this court. (Citing numerous cases.)

'Petitioner has apparently relied on the clause in the statute just quoted to the effect that-- 'such suit shall be subject to the general equity jurisdiction of the court in which such manager or receiver was appointed so far as the same may be necessary to the ends of justice.' It is, however, well settled that this portion of the statute does not limit or affect the meaning or application of the preceding clause of the statute, but is intended merely to reserve to the court, appointing a receiver whose act may result in a claim against the property or the purchaser thereof, jurisdiction over the mode of enforcing collection of such claim when judicially determined and liquidated, so far as may be necessary to properly protect and conserve the receivership property and to adjust the equities and rights of all parties having claims against such property or otherwise interested therein.'

The present petition shows that at the trial in the state court the respondent obtained a verdict of $2,250 against the petitioner, judgment on which verdict was affirmed by the Supreme Court of Michigan. Petitioner alleges that...