Prudential Ins. Co. v. Zimmerer, Civ. A. No. 256.

CourtUnited States District Courts. 8th Circuit. United States District Court of Nebraska
Citation66 F. Supp. 492
Docket NumberCiv. A. No. 256.
Decision Date26 June 1946

Joseph H. McGroarty, of Omaha, Neb., for plaintiff.

J. J. Thomas and Charles F. Barth, both of Seward, Neb., for defendants Joan Zimmerer and Helena Albers.

Paul H. Bek, of Seward, Neb., for defendants Wilhelm Luebbe and Anna L. Luebbe.

Robert T. Cattle, defendant, pro se.

DELEHANT, District Judge.

The present ruling is made upon a request for a stay of proceedings in this case pending the determination of the issues in a case between the same parties directed to the same vital matter presently pending in the District Court of Seward County, Nebraska. The course and history of this action should be noted briefly, to the end that the setting of the request may be perceived.

On November 15, 1944, the plaintiff filed its complaint against the two originally designated defendants, praying for the quieting in it of title to one hundred sixty acres of Seward County, Nebraska, land which it had allegedly acquired through the foreclosure in the District Court of Seward County, Nebraska, of a real estate mortgage. Joan Zimmerer answered, claiming that she as sole heir of John F. Zimmerer, deceased, and Helena Albers, as grantee from John F. Zimmerer during his lifetime, were the owners in equal shares of both that tract and another of one hundred twenty acres claimed and occupied by Wilhelm Luebbe and Anna L. Luebbe, as grantees from the plaintiff; that the foreclosure proceeding in question which between January 27, 1933 and June 1936 the plaintiff had conducted to its completion, resulting in the plaintiff's ostensible acquisition through judicially confirmed sheriff's sale of the title to the entire two hundred eighty acres, was wholly void in that the trial judge who acted throughout it, and particularly in the entry of the decrees of foreclosure and for the confirmation of sheriff's sale, was and is related as a brother-in-law to the defendant Robert T. Cattle (the judge's deceased wife, the mother of his several living children, having been Cattle's sister), who was a party defendant to the foreclosure action, and, at the time of that action, held the legal title to the land, but only as security for the payment of a debt of John F. Zimmerer, its then owner; and that the judge was, therefore, disqualified from acting in the case under the provisions of Section 24-315, R.S.Neb.1943. So far as it is material here, that section provides that:

"A judge * * * is disqualified from acting as such in the * * * district * * * court, except by mutual consent of the parties, in any case * * * where he is related to either party by consanguinity or affinity within the fourth degree, * * * and such mutual consent must be in writing and made a part of the record, * * *."

By order of this court, Helena Albers, Wilhelm Luebbe, Anna L. Luebbe and Robert T. Cattle were brought in as additional parties defendant. All of them subsequently answered. Helena Albers essentially adopted the answer of Joan Zimmerer. The Luebbes set out their title to the one hundred twenty acre tract conveyed to them by the plaintiff after the foreclosure action had been completed. Cattle's answer was merely a disclaimer.

In that state of the pleadings, trial, or at least a partial trial, of the action was had on October 5, 1945, and leave was given for the service and delivery to the trial judge of briefs successively by the several parties. Later, on December 7, 1945, the defendants Zimmerer and Albers, by leave of court, filed a reply to the answer of the Luebbes. And on the following day, they filed a request for leave to withdraw their rest announced at the trial and to introduce additional testimony in connection with the submission of the case. On February 6, 1946 the plaintiff, with leave of court, filed a reply to the answers and cross petitions of Joan Zimmerer and Helena Albers. On the same day the parties to this action filed a stipulation of certain facts, "without prejudice to the introduction of any additional testimony or exhibits of any of the parties hereto, at the trial of this cause." Thus, all of the parties, the plaintiff included, treated the case as only partially tried; and the briefs in it have been presented only in part.

Then, on March 4, 1946, Joan Zimmerer and Helena Albers, without leave of court, filed a so-called supplemental answer in which, among other things, they alleged their institution in the District Court of Seward County, Nebraska, of a proceeding to vacate and avoid the several judgments and decrees in the original foreclosure case prosecuted by the plaintiff, upon the ground that they are and always have been null and void; and requested the stay of this proceeding pending the determination of that action. The court promptly set that request for hearing in March 23, 1946. On the day before the hearing the plaintiff filed a reply and countershowing from which, and by the admission of opposing counsel upon oral argument, it appears that the new proceeding was brought in equity on February 20, 1946 in the District Court of Seward County, Nebraska, by Joan Zimmerer and Helena Albers, as plaintiffs, against the Prudential Insurance Company of America, Wilhelm Luebbe, Anna Luebbe, and Robert T. Cattle, as defendants; that the petition in it sets out a comprehensive history of the plaintiff's original lien upon the two hundred eighty acres, of the foreclosure proceedings, including their alleged invalidating infirmity, of the transfer in 1937 of title to the one hundred twenty acre tract to the Luebbes, and of the succession of Joan Zimmerer and Helena Albers to the alleged equity of redemption of John F. Zimmerer, who has died since the completion of the foreclosure action, and prays for the vacation of the decrees in the foreclosure case and for the allowance of redemption of the entire two hundred eighty acres of land by Joan Zimmerer and Helena Albers from the original mortgage debt and for an accounting of rentals as an incident thereto. The hearing on the request for stay of this court's final ruling in, and of the further prosecution of, this case was had as scheduled; and briefs on the issue so made have just been submitted.

Meanwhile, the plaintiff in the present case made an abortive effort, as a defendant in the new state court case, to remove it to this court upon the ground of diversity of citizenship and upon the claim of a separable controversy. This court promptly remanded that action because, as brought, it concerns the two hundred eighty acres as a single entity, and includes the Luebbes (residents of Seward County, Nebraska) as necessary parties defendant.

Thus tardily, therefore, and for the first time, an issue has been completely submitted to this court for a ruling in the case that was originally brought here; and that issue is whether this court should forbear, pending the determination of the recently filed suit in the state court, to exercise the jurisdiction which it is conceded by all parties to possess. It may be acknowledged that the direction which the court's ruling should take is not left free from doubt or perplexity by the reported decisions that are related to it. For, even in those opinions in which it is declared that the trial court's judgment in the matter of allowing a stay lies in its discretion, it is made clear that that discretion itself must be informed, rational and judicial, resting in recognized considerations of equity, good order and justice, and free from arbitrariness or caprice.

The action in this court is one solely in rem. The original foreclosure proceeding was also an action in rem, as is the pending equitable proceeding for the vacation of the decrees in that earlier case. At least for the purpose of this ruling, that characteristic of the present suit is neither nullified nor minimized by the circumstance that the affected res is not formally reduced to the custody or possession of the court. Covell v. Heyman, 111 U.S. 176, 4 S.Ct. 355, 28 L.Ed. 390; Farmers' Loan & Trust Co. v. Lake Street Elevated R. Co., 177 U.S. 51, 20 S.Ct. 564, 44 L.Ed. 667; Kline v. Burke Construction Co., 260 U.S. 226, 43 S.Ct. 79, 81, 67 L.Ed. 226, 24 A.L.R. 1077.

No controversy exists between the parties upon a primary rule of jurisdiction and procedure as between state courts and federal courts. Recognizing that a different rule obtains in actions strictly in personam, they agree that when two suits in rem, or quasi in rem, involving the same issue are pending, one in a federal court, the other in a state court, the court which first assumes jurisdiction over the property may maintain and exercise that jurisdiction to final effect and to the exclusion of the other court. The rule was well stated in Kline v. Burke Construction Co., supra, in the following language:

"* * * where a federal court has first acquired jurisdiction of the subject-matter of a cause, it may enjoin the parties from proceeding in a state court of concurrent jurisdiction where the effect of the action would be to defeat or impair the jurisdiction of the federal court. Where the action is in rem the effect is to draw to the federal court the possession or control, actual or potential, of the res, and the exercise by the state court of jurisdiction over the same res necessarily impairs, and may defeat, the jurisdiction of the federal court already attached. The converse of the rule is equally true, that where the jurisdiction of the state court has first attached, the federal court is precluded from exercising its jurisdiction over the same res to defeat or impair the state court's jurisdiction." Hagan v. Lucas, 10 Pet. 400, 9 L.Ed. 470; Taylor v. Carryl, 20 How. 583, 15 L.Ed. 1028; Freeman v. Howe, 24 How. 450, 16 L.Ed. 749; Covell v. Heyman, supra; Farmers' Loan & Trust Co. v. Lake Street Elevated R. Co., supra; Palmer v. State of Texas, 212...

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