Ostrander-Seymour Co. v. Grand Rapids Trust Co.

• Decision Date: 09 June 1931
• Docket Number: No. 5649.,5649.
• Parties: OSTRANDER-SEYMOUR CO. v. GRAND RAPIDS TRUST CO. et al.
• Court: U.S. Court of Appeals — Sixth Circuit

50 F.2d 567 (1931)

OSTRANDER-SEYMOUR CO. v. GRAND RAPIDS TRUST CO. et al.

No. 5649.

Circuit Court of Appeals, Sixth Circuit.

June 9, 1931.

Meyer Abrams and Vincent G. Gallagher, both of Chicago, Ill. (Gallagher, Shulman & Abrams, of Chicago, Ill., and Knappen, Uhl & Bryant, of Grand Rapids, Mich., on the brief), for appellant.

B. M. Corwin and G. C. Fuller, both of Grand Rapids, Mich. (Corwin, Norcross & Cook, of Grand Rapids, Mich., on the brief), for appellees.

Before DENISON, HICKS, and HICKENLOOPER, Circuit Judges.

HICKENLOOPER, Circuit Judge.

On August 16, 1926, appellant sold certain chattel property comprising an engraving plant and equipment to the Powers-Tyson Corporation, a Michigan corporation, reserving a security title for approximately $7,500 of the purchase price. On January 13, 1928, the circuit court for Kent county, Mich., appointed a receiver for the Powers-Tyson Corporation, a Delaware corporation, which had theretofore succeeded to the possession of the engraving plant. Appellant intervened in that action by filing a petition to reclaim the engraving plant upon the assumption that it had been held under a conditional sales contract and title was in the intervener. This action was prosecuted to the Supreme Court of Michigan, where it was held that the instrument, whereby it was alleged title had been retained, was a chattel mortgage, void as against creditors for want of compliance with the recording statutes. Appellant thereupon brought the present action in trover, claiming that the circuit court of Kent county was without jurisdiction to appoint a general receiver for the Deleware corporation under the allegations of the bill; that the Supreme Court of Michigan had so decided (245 Mich. 669, 224 N. W. 609); and that the original sale was to the Michigan corporation, and neither the receiver nor the purchaser of the assets of the Delaware corporation acquired title to the goods and chattels of the Michigan corporation, but both are liable in conversion.

The obvious fallacy in plaintiff's position is twofold: First, it assumes that the question of jurisdiction is not a question of a judicial nature so as to fall within the doctrine of res judicata (to the contrary see Baldwin v. Iowa State Traveling Men's Ass'n, 51 S. Ct. 517, 75 L. Ed. ___, decided May 18, 1931); second, it assumes that the Supreme Court of Michigan held the circuit court of Kent county to be without jurisdiction of the subject-matter, that is, without jurisdiction to appoint the receiver. A perusal of the opinion shows the second assumption to be clearly without merit. The judgment of the circuit court denying relief to the present plaintiff, relief which could only be sought under a claim of title, was affirmed, with costs. All but one judge of the Supreme Court specifically based the decision upon the insufficiency of the unrecorded chattel mortgage to effect a retention of title, and as a basis for the relief sought. This was, in itself, a recognition and an exercise of jurisdiction — not a denial of it.

Much might here be said upon such subjects as the election of remedies, acquiescence, and estoppel, collateral attack upon...