Employers Reinsurance Corp. v. Boston Mut. Life Ins. Co., 5826.

• Decision Date: 06 December 1930
• Docket Number: No. 5826.,5826.
• Citation: Employers Reinsurance Corp. v. Boston Mut. Life Ins. Co., 45 F.2d 593 (5th Cir. 1930)
• Parties: EMPLOYERS' REINSURANCE CORPORATION v. BOSTON MUT. LIFE INS. CO. et al.
• Court: U.S. Court of Appeals — Fifth Circuit

45 F.2d 593 (1930)

EMPLOYERS' REINSURANCE CORPORATION v. BOSTON MUT. LIFE INS. CO. et al.

No. 5826.

Circuit Court of Appeals, Fifth Circuit.

December 6, 1930.

William H. Clark, J. W. Gormley, O. O. Touchstone, and William H. Clark, Jr., all of Dallas, Tex. (Touchstone, Wight, Gormley & Price and Clark & Clark, all of Dallas, Tex., on the brief), for appellant.

Eugene P. Locke, Maurice E. Purnell, Albert S. Johnson, and J. N. Townsend, all of Dallas, Tex. (Locke, Locke, Stroud & Randolph, of Dallas, Tex., on the brief), for appellees.

Before BRYAN and FOSTER, Circuit Judges, and DAWKINS, District Judge.

BRYAN, Circuit Judge.

Appellant filed a bill in a federal District Court to foreclose a mortgage on an improved city lot in Dallas. The mortgage was given to a trustee to secure 250 bonds, each of the denomination of $1,000, and contained provisions to the effect that in the event of default the trustee was authorized, and, upon request of the bondholders of a majority in amount of the bonds, was under the duty to foreclose; that no bondholder should foreclose or enforce any right under the mortgage until the trustee or his successor should wrongfully refuse such request to foreclose. The bill averred that appellant was the owner of ninety bonds, that all the bonds were in default for nonpayment of interest, that the trustee at the request of the bondholders of the majority bonds had so declared, and that appellant sued for the use and benefit of all bondholders; and prayed for the appointment of a receiver in order to protect the mortgaged property from waste. The owners of the property answered, and a decree was entered appointing a receiver. The bill, answer, and decree were all filed on the same day. A similar suit also praying for a receiver had previously been brought in a state court by the holders of a majority of the bonds, in which appellant was named as a party defendant. The state court appointed a receiver, but that was not done until after a receiver had been appointed by the federal court. On motion of the state court receiver and a bondholder, this suit was dismissed on the ground that the state court had first acquired jurisdiction.

It was not error to dismiss appellant's suit on the ground stated. It is not necessary that the state court receiver should have taken actual possession of the mortgaged property; but it was sufficient that a bill praying for a receiver was first filed in the state court. Farmers' Loan & Trust Co. v....