Gates v. Bucki

• Decision Date: 27 January 1893
• Docket Number: 161.
• Citation: 53 F. 961
• Parties: GATES v. BUCKI.
• Court: U.S. Court of Appeals — Eighth Circuit

53 F. 961

GATES v. BUCKI.

No. 161.

United States Court of Appeals, Eighth Circuit.

January 27, 1893

Statement by SHIRAS, District Judge:

On the 15th day of June, 1889, Victor Meyer and Evelyn K. Meyer residents of the city of New Orleans, La., executed a deed of conveyance of certain realty situated in Jefferson county Ark., known as the 'Corinne Place,' to the Farmers' Land & Loan Company, a corporation created under the laws of the state of Louisiana, for the expressed consideration of $40,000, of which amount $24,000 were to be paid in certificates of the capital stock of said corporation, and for the remaining $16,000 the said corporation was to issue coupon bonds for $1,000 each payable to bearer, and coming due July 1, 1909, and to secure the payment of the bonds, principal and interest, the said Victor Meyer reserved in the deed a vendor's lien upon the property conveyed, and the Farmers' Land & Loan Company also signed said conveyance, thereby making the same on its behalf, a mortgage to secure the payment of the bonds representing the $16,000 of the purchase price. This instrument was filed for record in the proper office of Jefferson county, Ark., on the 29th of March, 1890. On the 25th of December, 1890, Ferdinand Gates brought an action at law in the circuit court of Jefferson county, Ark., against Victor Meyer and Adolph Meyer, partners under the firm name of V. & A. Meyer & Co., to recover the sum of $10,000, and caused a writ of attachment to be issued against said defendants as nonresidents of the state, the same being levied on the realty known as the 'Corinne Place.' In this action, in due time, the plaintiff obtained judgment against the attached property, constructive service of the pendency of the action having been given to the defendants therein, in accordance with the provisions of the statutes of Arkansas.

On the 6th of January, 1891, Gates instituted a suit in equity in the circuit court of Jefferson county against Victor Meyer, Adolph Meyer, and the Farmers' Land & Loan Company, setting forth the fact of the issuance and service of the writ of attachment in the law action, the rendition of the judgment therein, and further averring that the conveyance of the realty by Victor Meyer to the Farmers' Land & Loan Company, as above stated, was a fraud, and void as against said Ferdinand Gates as a creditor of said Victor Meyer, and praying that the same might be set aside and canceled. Upon an application made when the bill in equity was filed, to wit, on January 6, 1891, Gabe Meyer was appointed by the circuit court of Jefferson county receiver in said suit, with authority to take charge of the property involved in the proceedings, to collect the rents coming therefrom, and otherwise care for the same, and, constructive service being made upon the nonresident defendants, the complainant proceeded to take testimony by depositions in support of the allegations of his bill. On the 16th day of February, 1892, Charles L. Bucki filed a bill in equity in the United States circuit court for the eastern district of Arkansas against the Farmers' Land & Loan Company and Victor Meyer and Evelyn K. Meyer, wherein it was averred that the complainant was a citizen of the state of New York, the defendants being citizens of the state of Louisiana, and that complainant was the owner of the 16 coupon bonds issued by the Farmers' Land & Loan Company in part payment for the purchase of the Corinne place, and which were secured by the mortgage included in the provisions of the joint instrument executed by Victor Meyer and wife and the Farmers' Land & Loan Company under date of June 15, 1889; and that through the failure to pay the interest coupons the whole debt had been declared to be due in pursuance to provisions to that effect contained in the mortgage given to secure payment of the bonds, wherefore a foreclosure of the vendor's and mortgage lien on said realty was prayed in due form.

On the 16th of February, 1892, the United States circuit court, upon the showing that the suit was for the foreclosure of a mortgage upon realty situated within the district, and that the defendants were nonresidents, upon whom personal service could not be made within the state of Arkansas, made an order for substituted service, copies of which were duly served upon the named defendants in the city of New Orleans, La., on the 23d of February, 1892. On the 25th of February, 1892, the complainant filed an amendment to his bill, making Ferdinand Gates a defendant, averring that said Gates claimed a lien upon the mortgaged realty by reason of the attachment proceedings in the state court, but averring also that the lien, if any existed, was inferior to that of the mortgage.

On the 16th of June, 1892, Ferdinand Gates appeared in the federal court and filed a plea questioning the jurisdiction of that court over the bill for the foreclosure of the mortgage on two grounds. In the first division of the plea was recited the bringing the attachment proceedings and the suit in equity in the Jefferson county circuit court, together with the order appointing a receiver, with the further averment that, upon learning that Charles L. Bucki claimed to be the owner of the bonds secured by the mortgage, he, the said Gates, had amended his bill in the state court, making Bucki and Evelyn K. Meyer defendants thereto, and praying that they be restrained from foreclosing the said mortgage in the suit in the federal court, and that a restraining order to that effect would be pressed to a hearing. In the second division of the plea it was averred that none of the defendants in the foreclosure proceedings were residents of the state of Arkansas, and therefore the court was without jurisdiction to grant a decree of foreclosure.

Upon the filing of the plea to the jurisdiction by said Gates, the complainant in the foreclosure proceedings filed the following paper in said suit: 'The complainant respectfully represents to this court that, being the owner and holder of certain negotiable promissory notes executed by the said defendant, and having acquired the same for a valuable consideration, before maturity, in due course of business, and without notice of any defense thereto, he, on the 13th day of February, 1892, instituted suit in this court for the foreclosure of the mortgage executed by the said defendant for the security of said notes, said mortgage conveying the plantation in Jefferson county, in this district, known as the 'Haskell Place.' Prior to the institution of said suit, it now appears that the defendant, Ferdinand Gates, had brought suit by attachment in the Jefferson circuit court against one Victor Meyer and one Adolph Meyer, claiming that said plantation is the property of said Victor and Adolph Meyer. In said suit the complainant was not made a party defendant, and, as he was the holder of negotiable paper, purchased before its maturity, and which did not mature until the institution of the suit by the complainant in this court, yet, nevertheless, the said Ferdinand Gates has, by an amendment to his complaint, made long after the institution of this suit, endeavored to bring the complainant in as a defendant in the said suit by him instituted, and to restrain the complainant from proceeding with this suit, all of which, as the complainant submits, is a high contempt of the jurisdiction of this court, and the complainant therefore prays for a rule upon the said Ferdinand Gates and Morris M. Cohn, his attorney, to show cause why they should not be punished for the said contempt, and for an injunction restraining the said Gates from the further prosecution of said suit as against the complainant.'

On the 17th of June, 1892, this application for an injunction was heard, and the following order was made and entered of record: 'Now, on this day comes on to be heard the application of the complainant for an injunction to restrain the defendant, Ferdinand Gates, from applying to the circuit court of Jefferson county for an order enjoining the complainant and his solicitors from the further prosecution of this suit; and comes the complainant, by U. M. & G. B. Rose, Esqs., his solicitors, and also the defendant, Gates, by Morris M. Cohn, Esq., his solicitor, and the cause is submitted to the court on the bill of complaint and the amendments thereto, and on the pleas of the said Ferdinand Gates; and, the court being sufficiently advised in the premises, it is considered and decreed that the said Gates, his attorneys and solicitors, be forever enjoined from applying from the said circuit court of Jefferson county for an injunction restraining the plaintiff and his solicitors from the prosecution of this suit. To this ruling and decision the said defendant, Gates, excepted at the time, and here in open court prays an appeal to the circuit court of appeals, which is granted; and the court doth order that the appellant, Ferdinand Gates, do execute and file a cost bond herein, pursuant to the rules of the circuit court of appeals, in the penal sum of two hundred and fifty dollars, to answer all costs if he shall fail to sustain said appeal.'

From this order an appeal was perfected to this court, the errors assigned being the following: '(1) The court below had no jurisdiction of the cause, because neither the complainant nor any of the defendants were residents or inhabitants of the district at the time this suit was instituted. (2) The court below had no, and could exercise no, jurisdiction over the res, inasmuch as that was in the custody of a receiver of the state court in the suit of Gates. (3) That, in any event the presence of the said receiver as a party defendant in this cause was indispensable, and, failing, the court below had no jurisdiction...