Cobe v. Ricketts

Decision Date07 February 1905
Citation85 S.W. 131,111 Mo.App. 105
PartiesCOBE, Appellant, v. RICKETTS, Respondent
CourtMissouri Court of Appeals

Appeal from Audrain Circuit Court.--Hon. Houston W. Johnson, Judge.


Judgment reversed and cause remanded.

Fry & Rodgers for appellant.

(1) The United States Circuit Court had jurisdiction over the subject-matter involved in the suit of Cowden v. Phoenix B. & L. and the parties thereto; the said Cowden being a citizen of the State of Iowa, the defendant being a citizen of the State of Missouri and the amount in dispute exceeding the sum of two thousand dollars. Act of 1887-1888, 24 U. S. Stat. at L. 552, c. 373. secs. 1, 2; 25 U. S. Stat. at L. 443, c. 866 secs. 1, 2. (2) The jurisdiction of the circuit court of the United States being thus established both over the parties to the suit and subject-matter of it, the judgment rendered therein is not open to collateral attack, nor has the State Court the power to review it and say that the Federal Court committed error in rendering it. State ex rel. v Rainey, 74 Mo. 233; Berneker v. Miller, 44 Mo 110; Wonderly v. L. Co., 150 Mo. 646, 51 S.W. 745. (3) Jurisdiction of subject-matter is the power to hear and determine cases of the general class to which the proceedings in question belong. The United States Circuit Court had jurisdiction. Hadley v. Bernero, 103 Mo.App. 549, 78 S.W. 64; Postlewaite v. Ghiselins, 97 Mo. 424, 10 S.W. 482; State ex rel. v. Smith, 104 Mo. 422, 16 S.W. 415; Hardware Co. v. Riddle, 84 Mo.App. 278; State ex rel. v. Neville, 110 Mo. 348, 169 S.W. 491; Rosenheim v. Harstock, 90 Mo. 365, 2 S.W. 473; O'Reiley v. Nicholson, 45 Mo. ; Gray v. Bowles, 74 Mo. 419; Coleman v. Dalton, 71 Mo.App. 25; Musick v. Railroad, 114 Mo. 315, 21 S.W. 491. (4) The trial court was clearly in error in holding if a suit was pending in the State Court of Buchanan county, that, so long as it was pending, all other courts were without jurisdiction over the persons and subject-matter of such suit. Williams v. Williams, 53 Mo.App. 624; Warder v. Henry, 117 Mo. 542, 23 S.W. 776; Carson-Rand Co. v. Stern, 129 Mo. 388, 31 S.W. 772; 1 Ency. Pl. & Prac., 755.

Geo. Robertson for respondent.



This is an action on two promissory notes originally executed by the defendant to the Phoenix Loan Association of St. Joseph, Missouri. One note was given September 11, 1894, and one September 9, 1899. At the dates of the notes the said loan association was a going concern. Ricketts was a stockholder and put up, as collateral security for his notes, a certificate of stock for $ 1,000. On July 15, 1899, H. L. Gray, State supervisor of building and loan associations, began a suit in the circuit court of Buchanan county, alleging said association was insolvent and asking that a receiver be appointed. The association filed an answer admitting the truth of the petition and joining in the prayer for a receiver; so the court appointed Henry M. Tootle and William Graham receivers. On April 2, 1901, while the proceedings for the dissolution of the corporation were pending in the Buchanan Circuit Court, an action was instituted in the circuit court of the United States for the St. Joseph division of the Western District of Missouri. This suit was brought by George A. Cowden, a stockholder in the association and a citizen of Iowa, and asked the appointment of a receiver. The Federal Court assumed jurisdiction and appointed the same receivers previously appointed by the State Court. Thereupon the judge of the Buchanan Circuit Court undertook to transfer the receivership to the Federal Court and relinquish jurisdiction over the property of the association. This attempt was removed to the Supreme Court of Missouri by a writ of certiorari and the latter court quashed the order transferring the receivership and property to the Federal Court. [State ex rel. v. Woodson, 164 Mo. 440, 64 S.W. 774.] Subsequently Henry Tootle and William Graham resigned as receivers of the United States Circuit Court and Ransom M. Ridge was appointed in their stead. They acted for the State Court until discharged by a final judgment, but seem to have done little or nothing after their resignation in the Federal Court. Before they resigned that court entered a decree directing its special master in chancery, Geo. T. Sharrit, to transfer the assets of the association to the plaintiff, Ira N. Cobe, who had bought the assets at a sale by said master in obedience to a judicial order. There were other directions in the order as to how part of the assets should be transferred to Cobe, which will be noticed below. The notes in suit were not assigned by Sharrit, the master, but by the receiver, Ridge, who indorsed them as follows: "Pay to the order of Ira M. Cobe, without recourse on me. R. M. Ridge, receiver of the Phoenix Loan Association of St. Joseph, Missouri." After the transfer of the notes Cobe began this action in the circuit court of Audrain county. He was defeated and appealed.

We have given only so much of the history of the litigation in which the Phoenix Loan Association became involved as is material to the present controversy. A complete resume of the various proceedings against it may be read in the reports of the decisions of the Supreme Court, the State receivership suit having been thrice before that body. [State ex rel. Gray v. Phoenix Loan Assn., 159 Mo. 102, 60 S.W. 74; State ex rel. Ballew v. Woodson, 161 Mo. 444, 61 S.W. 252; State ex rel, Beskett v. Woodson, 164 Mo. 440, 64 S.W. 774.] Each of those cases dealt with some phase of the suit in the Buchanan court for the winding up of the association. Besides that suit and the Cowden receivership proceedings, suits were instituted in Kansas and Texas for the purpose of collecting and preserving the assets of the association in those States.

For the respondent it is contended that Cobe acquired no title to the notes in suit as he purchased at a sale made under an order of the United States Circuit Court, which order was void because of the pendency of a prior suit involving the same subject-matter in the Buchanan Circuit Court. A court possessing jurisdiction of the subject-matter of an action pending before it, enjoys the right to proceed to a final disposition of the controversy as against another tribunal of concurrent jurisdiction in which a similar litigation was instituted subsequently. [Bank of Bellows Falls v. R R., 28 Vt. 470; Mason v. Piggott, 11 Ill. 85; Stearns v. Stearns, 16 Mass. 167; Home Ins. Co. v. Howell, 24 N.J.Eq. 238; Sayler v. Simpson, 45 Ohio St. 141, 12 N.E. 181; Hawes v. Orr, 10 Bush. 431; Hardeman v. Battersby, 53 Ga. 36; MacLean v. Circuit Judge, 52 Mich. 257, 18 N.W. 396; Ober v. Gallagher, 93 U.S. 199, 23 L.Ed. 829.] This rule is necessary in order to prevent conflicts of jurisdiction. And the rule prevails in settling between a State and a Federal Court, the right to dispose of litigation. [Sharon v. Terry, 1 L.R.A. 572, 36 F. 337, affirmed 131 U.S. 40, 33 L.Ed. 94, 9 S.Ct. 705; Watson v. Jones, 80 U.S. 679; Walker v. Flint, 7 F. 435; Davis v. Life Assn., 11 F. 781; Tefft v. Sternberg, 5 L.R.A. 221, 40 F. 2; Judd v. Telegraph Co., 31 F. 182; Nellson v. Robinson, 31 F. 634; In re Schuyler's Boat Co., 136 N.Y. 169, 32 N.E. 623.] The circuit court of Buchanan county had the power to proceed with the case before it for winding up the loan association and distributing the assets through its receivers, notwithstanding the later suit for the same purpose in the national court. This was directly decided by our Supreme Court in State ex rel. Baskett v. Woodson, 164 Mo. 440, 64 S.W. 774, wherein it was held that the order of the Buchanan Circuit Court to transfer the winding up proceedings to the Federal court and require the receivers to turn over the assets in their hands to the receivers appointed by the latter tribunal, was a nullity. After that decision the suit in the Buchanan court and the one in the United States Circuit Court appear to have been conducted so that the orders of the two courts would agree in all respects. We gather this from the final judgment of the Buchanan court dissolving the loan association and discharging its receivers. That judgment or decree recites that the receivers, Graham and Tootle, had discharged in full all of the indebtedness of the corporation except to its members and had likewise fully administered the property in their hands, doing all things "under the orders of this court and of the Circuit Court of the United States in and for the Western Division of the Western District of Missouri, by which latter court they were also appointed receivers." The decree further recited that the receivers had fully administered and applied all the assets in their hands as officers of the Buchanan court, that no exceptions had been filed to their final settlement and application for discharge and, therefore, their report and settlement were approved and they were discharged, and the cause ordered to pass from the docket of the court. If an appeal was taken from that judgment the fact is not shown, and we accept it as the final disposition of the winding up suit in the Buchanan court. But the Cowden case still progressed. The latter suit contemplated from the first, deference to the prior litigation in the State court. The bill filed in the Federal Court referred to the proceeding in the State Court and stated reasons why the latter court could not as effectively administer all the assets of the loan association as the Federal Court, with an averment that the State Court would order its receivers to turn over the assets in their hands to the receivers appointed by the Federal Court. The latter tribunal appointed the same receivers and recognized the orders of...

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