Judd v. Bankers' & Merchants' Tel. Co.

• Decision Date: 16 June 1887
• Citation: 31 F. 182
• Parties: JUDD v. BANKERS' & MERCHANTS' TEL. CO. and others.
• Court: U.S. District Court — Southern District of New York

31 F. 182

JUDD v. BANKERS' & MERCHANTS' TEL. CO. and others.

United States Circuit Court, S.D. New York.

June 16, 1887

D. C Chatwood, for complainant.

H. B Turner and R. G. Ingersoll, for defendants.

WALLACE J.

This motion for a receiver an injunction pendente lite, if granted, would result in an unseemly and unnecessary interference with the jurisdiction of the supreme court of this state in the proceedings now pending in that court. The complainant by his bill asks this court to get in the assets and distribute the property of an insolvent corporation among its creditors, of whom he is one, when the state court, at the instance of other creditors, has already taken jurisdiction in suits brought against the corporation to obtain the same relief, and is now by its receiver in possession and control of the property of the corporation. Three suits are now pending in the supreme court of the state of New York,-- one brought by a judgment creditor to obtain a sequestration of the property of the corporation; another brought by a holder of mortgage bonds situated similarly to the present complainant, in behalf of himself and all other bondholders, to secure an equitable distribution of the property of the corporation among its creditors; and another brought by the trustees for the bondholders in the mortgage for a foreclosure of the mortgage. Receivers were appointed in the first suit, and, after the second suit was commenced the receivers appointed in the first suit were appointed receivers in the second suit, and all their proceedings in the first were approved by the order of the court in the second suit; so that both suits have been treated by the state court practically as one proceeding.

The action brought by the trustee for a foreclosure of the mortgage has proceeded to a decree and a sale of the mortgaged premises, and by the decree in that action it was ordered that receivers' certificates issued by order of the court in the first two suits, which had been negotiated by the receivers, and amounted to something over $600,000 at the time of sale, should be received towards payment of the purchase money, the certificates having been made a prior lien to the mortgage by the orders of the court.

Thus it appears that the state court is now in control of all the property and assets of the corporation, and is attempting to administer them, and appropriate the proceeds to those to whom they belon...