Equitable Trust Co. of New York v. Port Wentworth Terminal Corp.

• Decision Date: 16 June 1922
• Docket Number: 109.
• Citation: 281 F. 883
• Parties: EQUITABLE TRUST CO. OF NEW YORK v. PORT WENTWORTH TERMINAL CORPORATION et al.
• Court: U.S. District Court — Southern District of Georgia

281 F. 883

EQUITABLE TRUST CO. OF NEW YORK v. PORT WENTWORTH TERMINAL CORPORATION et al.

No. 109.

United States District Court, S.D. Georgia.

June 16, 1922

Murray Prentice & Aldrich, of New York City, and Anderson, Cann &amp Cann, of Savannah, Ga., for complainant.

Rabenold & Scribner, of New York City, and Hitch, Denmark & Lovett, of Savannah, Ga., for defendants.

SIBLEY District Judge.

This is a bill filed on leave of the court to foreclose a mortgage on realty within this district, to sell the mortgaged property, and to appoint receivers therefore pending a sale. Motion to dismiss and an opposition to the receivership are made.

The motion to dismiss is based on want of jurisdiction and of equity. The general equity for an accounting of the mortgaged property, to impound the accruing rents and profits under the terms of the mortgage, and to foreclose and sell, all of which is sought here, is sufficient on the latter score. As to the federal jurisdiction, there is none because of diversity of citizenship, the citizenship of the complainant being the same as that of the mortgagor and of its receivers. But the bill avers that the mortgaged property is in the hands of receivers of this court and that the relief sought cannot, for this reason, be had elsewhere. When a federal court, by receivers, assumes control of property in a case of which it has jurisdiction, it cannot be controverted that thereafter, during such control, no other court may deal directly with the property and that, as a necessary consequence, the duty and the power of making all dealings with the property in behalf of all persons whose rights may be affected is in such federal court, regardless of the presence or absence of the conditions of federal jurisdiction in each particular controversy that arises. Wabash Railroad v. Adelbert College, 208 U.S. 38, 54, 28 Sup.Ct. 182, 52 L.Ed. 379; Compton v. Jesup, 68 F 263, 15 C.C.A. 397, and cases cited. The court, having jurisdiction of the res, must do justice by all interested in it. This may be accomplished by that form of intervention known as pro interesse suo.

In strictness, intervention results in the intervener becoming party plaintiff or defendant in the main case, and by equity rule 37 (128 F. xxviii, 115 C.C.A. xxviii) the intervention is in subordination to and in recognition of the propriety of the main proceeding. Where the right to be protected is wholly independent of those contested in the main litigation but must be examined because of the court's control of the res, an ancillary or dependent bill may be entertained. Dependent is the better name because the bill is not an assistance to the main cause, but rather depends on it as an appendage. Such is the bill here. This court, having no jurisdiction over it as an original and independent suit, can and must entertain it as depending from its control of the property sought to be foreclosed upon and sold. It sufficiently avers the jurisdictional fact of this court's control of the res to make it such, though its form is otherwise that of an original bill. Continental Trust Co. v. Toledo Railroad (C.C.) 82 F. 642, affirmed 95 F. 497, 36 C.C.A. 155; Morgan's Louisiana & Texas Railroad v. Texas Central Railroad, 137 U.S. 171, 11 Sup.Ct. 61, 34 L.Ed. 625.

Its prayer for a receivership of the property superseding that now in existence is urged as defeating the dependent jurisdiction because subversive of the subordination to and recognition of the propriety of the main suit which ought to attend the exercise of all dependent jurisdiction. The subordination...