Coltrane v. Templeton

• Decision Date: 07 February 1901
• Docket Number: 383.
• Citation: 106 F. 370
• Parties: COLTRANE et al. v. TEMPLETON et al.
• Court: U.S. Court of Appeals — Fourth Circuit

106 F. 370

COLTRANE et al. v. TEMPLETON et al.

No. 383.

United States Court of Appeals, Fourth Circuit.

February 7, 1901

Wm Hepburn Russell and Fielder C. Slingluff (Wm. Beverly Winslow, Yancey & Haas, and C. A. McHugh, on the brief), for appellants.

L. L Lewis and G. D. Letcher (George E. Sipe, on the brief), for appellees.

Before SIMONTON, Circuit Judge, and PURNELL and WADDILL, District judges.

SIMONTON Circuit Judge.

This cause now comes here on appeal from an order of the circuit court of the United States for the Western district of Virginia. The Baltimore Building & Loan Association, a corporation of the state of Maryland, became insolvent. Thereupon a bill was filed in March, 1900, by Daniel B Coltrane et al., complainants, against the said Baltimore Building & Loan Association, in the circuit court of the United States for the district of Maryland. The complainant claimed to be a stockholder in said corporation, and he brought his bill as a general stockholders' bill, for the equal use and benefit of all stockholders in respondent corporation who may join therein by intervention and otherwise, and bear their pro rata share in the costs and expenses of the suit. This bill having been filed, and the respondent corporation having entered its voluntary appearance and admitted its insolvency, the circuit court for the district of Maryland, on March 21, 1900, appointed Bird M. Robinson receiver for said corporation, and took full charge of the administration of the insolvent corporation. The order appointing the receiver provided, among other things, that the complainant be authorized to apply to any other circuit court of the United States of competent jurisdiction, in any other state or district, for such order by ancillary proceedings or otherwise, in aid of the primary jurisdiction vested in the circuit court of the district of Maryland. Pursuing the authority granted in this order, the complainant on March 21, 1900, filed an ancillary bill in the circuit court of the United States for the Western district of Virginia against the said corporation. Accompanying this bill, as an exhibit, is a copy of the proceedings in the circuit court of Maryland. The prayer of this ancillary bill, after prayer for subpoena, is in these words:

'(1) That a receiver be appointed by this honorable court to take into his possession and hold, subject to the further orders of this court, the properties aforesaid, and all other real properties of the respondent corporation lying, being, and situate within this district or within the state of Virginia, and that such powers and authority be conferred upon him as are prayed in the original bill filed in said United States circuit court for the district of Maryland, or as may be necessary and proper in the premises. (2) That your honors will make such orders and decrees, preliminary and final, as are prayed for in said bill by your complainant in the circuit court for the district of Maryland, and that your honors will also make all such other and necessary orders, judgments, and decrees as may be required in aid of said bill, and that your honors will take ancillary jurisdiction with the said circuit court of the United States for the district of Maryland, and will give your complainant all the relief which may be necessary to accomplish the purposes of filing said bill: and, finally, that your honors shall order and direct the receiver appointed in this suit as herein prayed to sell or otherwise dispose of the real properties of respondent corporation, and when the same shall have been sold, either by said receiver or under the orders and decrees of this court, that said receiver be required and directed to account to the receiver appointed as aforesaid in the court of primary jurisdiction, to wit, the United States circuit court for the district of Maryland, for all the proceeds of said properties, after the costs and expenses incident to this suit, and a reasonable allowance to complainant by way of counsel fees, shall have been provided for and paid,'-- ending with a prayer for general relief.

The defendant corporation appeared to said ancillary suit, and filed its answer, admitting the facts stated, and consenting to the appointment of a receiver. Upon the filing of these papers the circuit court of the Western district of Virginia entered its decree taking ancillary jurisdiction, and appointing the said Bird M. Robinson receiver. Among other things, it ordered that all persons in that district having claims or demands of any kind against the respondent corporation are authorized and permitted to present the same by intervening petition in this cause, and they are enjoined from instituting any separate suit or action against the corporation in this district or state. At this stage of the cause, R. G. Templeton, Letcher & Letcher, P. W. Effinger, and Bridget A. Lamb, all of them residents of the Western district of Virginia, filed their petition in the cause. All of these but Bridget A. Lamb claim to be stockholders in the respondent corporation. She avers that she is a debtor of this company. The petition sets out that there is a large amount of property of this corporation in this district; that, by reason of their distance from the court of primary jurisdiction, it would entail great expense and trouble upon them to present their claims in that court. To this end, they pray the appointment of a co-receiver, resident in this district, and for the additional reason that the assets, real and personal, within that jurisdiction can be more expeditiously and judiciously managed by a resident receiver than by one resident elsewhere. The petition also says: 'Your petitioners are further advised and charge that they have the right to ask that the assets of said company, within the jurisdiction of this court, shall not be permitted to be transferred to the jurisdiction of another court, and, therefore, beyond the control of this court, until the rights of your petitioners thereto shall have been ascertained and adjudged, and that this court will require that all of the real and personal property of said defendant corporation shall remain within the jurisdiction of this court, and under its immediate control and direction, to be forthcoming to meet such decrees and orders, disposing of the same, as hereafter may be properly adjudged and entered in this cause.'

The petitioners gave notice that they would make their motion on the petition before Hon. John Paul, one of the judges of this court, on April 23, 1900. A postponement was asked on that day, and the hearing was fixed for April 25th. On the last-named day the complainant and defendant appeared, and by consent the hearing of the motion was continued until April 30, 1900, before Hon. John Paul. On that day these parties (Coltrane, complainant, and the corporation, respondent) moved to strike the petition from the file, chiefly because the petitioners do not seek to be made parties to the cause nor do they state facts entitling them to relief. They also on that day filed a demurrer to the petition, then a plea, and then an answer. The gravamen of these is that all matters pertaining to the relative rights of stockholders, and to the administration, receipt, and distribution of the assets of the corporation, remain with the court of original jurisdiction exclusively, and there is neither necessity nor propriety for the appointment of a resident co-receiver in the jurisdiction of the circuit court for the Western district of Virginia. On the same day a petition was filed in the same cause by John W. Shepherd and 14 others, claiming to be stockholders in the Baltimore Building & Loan Association, earnestly protesting against the prayer of Templeton and others. On the same day (April 30th) Randolph Barton, Sr., Esq., who had been appointed co-receiver with Bird M. Robinson by the circuit court of the district of Maryland, filed his petition in the circuit court for the Western district of Virginia, praying that said appointment be confirmed in the latter district. This appointment was made that day. This being the condition of the cause, the argument was had. The motion to strike out the Templeton petition from the files was overruled. A motion was made by the counsel representing Coltrane and the corporation to set the cause for a hearing on demurrer and plea for the next rule day. This was refused, and the hearing went on. The case was taken under advisement until the next day. On that day counsel for Coltrane and the corporation made their motion that the judge then presiding enter an order that it would be improper for him to sit in the trial of these issues, because he is plaintiff in an action against the Baltimore Building & Loan Association, now pending in the circuit court for Rockingham county, Va., and because Greenlee W. Letcher, of the firm of Letcher & Letcher, parties to the Templeton petition, is the son-in-law of the said judge. Hearing this motion, Judge Paul stated that he was fully impressed with the importance of the rule precluding a judge from sitting in a cause in which he was interested; that the only difficulty he had was in drawing the lines of demarkation between formal and preliminary orders which do not affect the decision of any question going to the merits, and those in the decision of which he had a personal interest; that the parties now objecting had procured the appointment of Mr. Robinson as receiver, and of Mr. Barton as co-receiver, cognizant of the principal facts now stated as disqualifying him; that up to this time no objection had been made to his action on the petitions when they were presented, discussed, and then submitted to him. He therefore expressed the opinion that up to this point he...