Butler v. JUDGE OF UNITED STATES DISTRICT COURT, ETC., 9672.

• Decision Date: 08 January 1941
• Docket Number: No. 9672.,9672.
• Parties: BUTLER v. JUDGE OF UNITED STATES DISTRICT COURT IN AND FOR NORTHERN DIST. OF CALIFORNIA, NORTHERN DIVISION.
• Court: U.S. Court of Appeals — Ninth Circuit

116 F.2d 1013 (1941)

BUTLER v. JUDGE OF UNITED STATES DISTRICT COURT IN AND FOR NORTHERN DIST. OF CALIFORNIA, NORTHERN DIVISION.

No. 9672.

Circuit Court of Appeals, Ninth Circuit.

January 8, 1941.

G. A. Bisbee, of Los Angeles, Cal., and H. Ward Sheldon, of Nevada City, Cal., for petitioner.

Robert M. Searls and Wm. E. Colby, both of San Francisco. Cal., for respondent.

Before WILBUR, GARRECHT, and HEALY, Circuit Judges.

WILBUR, Circuit Judge.

This is a petition to this court for a writ of mandamus to compel the respondent to proceed with the trial of a suit to quiet title instituted by Cooley Butler, the petitioner herein.

The respondent judge, upon application of the defendant, The Empire Star Mines Company, Ltd., hereinafter referred to as the Empire Company, stayed further proceedings in the United States District Court for the Northern District of California, hereinafter referred to as the federal court, to await the result of the prior action brought by that company against the petitioner in the Superior Court in and for Nevada County, State of California, hereinafter referred to as the state court. Each court has jurisdiction of the action brought therein. Jurisdiction of the federal court is predicated upon diversity of citizenship. The question involved in this application is whether the federal court had discretion to stay the action brought therein and if so whether or not that discretion was properly exercised.

Each suit involves the question of title to underground mining rights in two lots, numbered 6 and 7, located in Grass Valley, Nevada County, California. These rights are predicated upon a contract between the predecessors of Cooley Butler and the predecessors of the Empire Company. The action filed in the state court was brought by the Empire Company against Cooley Butler, and two of his employees, Wallace Butler and Fred Kallenborn, seeking to perpetually enjoin underground trespass, and for damages for trespass in underground workings of the Empire Company in lots 6 and 7. The defendants answered and denied the trespass and alleged that Cooley Butler was the owner of the property whereon the trespass was alleged to have been committed and prayed for a judgment adjudicating him to be the owner of the property and entitled to possession of it, and that plaintiff be enjoined from asserting any claim thereto. This pleading was in effect a counterclaim or cross-complaint seeking affirmative relief quieting his title to the property involved in the action. Issue was joined in the state court and the case set for trial on the 25th day of November 1940, whereupon Cooley Butler instituted the action in the federal court to quiet title to 272 lots in the townsite of Grass Valley, including among others the lots involved in the state action.

The Empire Company, without answering in the action in the federal court, moved that court on notice and affidavits to stay all further proceedings therein until the trial of the issues and judgment in the action in the state court on the ground that those issues were identical with the issues in the federal action. The trial judge granted the motion, being of opinion that the issues in the two cases were practically identical since both turned upon the interpretation of a contract between the predecessors of Cooley Butler and of the Empire Company concerning extralateral mining rights and upon the factual question whether or not the veins being worked were extralateral within the meaning of the contract.

No question is raised as to the existence of original jurisdiction over the subject matter in either state or federal courts. The question is whether or not the federal court had the discretion to temporarily stay further proceedings in the action before it because of the impending trial of the prior action instituted in the state court. The pendency of the same cause of action in a state court between the same parties is ordinarily not a ground for abating the action in the federal court. The parties may pursue their remedy in both courts at the same time and a judgment first obtained would be binding in both courts. To hold that the federal court should in all cases give way to the state court would in effect deprive persons of diverse citizenship of the rights given to them by the federal Constitution and the statutes to proceed in the federal courts. See McClellan v. Carland, 217 U.S. 268, 30 S.Ct. 501, 54 L.Ed. 762. It has been uniformly held, notwithstanding this consideration, that when the proceedings are in rem or quasi in rem the court first obtaining possession of the res should proceed to final judgment and that the court of concurrent jurisdiction should suspend proceedings and await the conclusion of the case in the court having actual or potential possession of the res. Hutchins v. Pacific Mut. Life Ins. Co., 9 Cir., 97 F.2d 58, and cases cited.

It is urged here by the respondent that the suit to quiet title is a proceeding in rem within the meaning of the rule just stated. The real question is whether or not, under the circumstances, it was an abuse of discretion for the respondent judge to stay proceedings in his court in order to permit the trial of the prior action in the state court. We are not without authority on that question. This court in Wolf v. District Court for the Northern...