Reiter v. Illinois Nat. Cas. Co.

• Decision Date: 10 June 1954
• Docket Number: No. 11035.,11035.
• Parties: REITER v. ILLINOIS NAT. CAS. CO. et al.
• Court: U.S. Court of Appeals — Seventh Circuit

213 F.2d 946 (1954)

REITER v. ILLINOIS NAT. CAS. CO. et al.

No. 11035.

United States Court of Appeals, Seventh Circuit.

June 10, 1954.

John A. Brown, Chicago, Ill., for appellant.

George C. Bunge, Marvin F. Metge, Paul H. Heineke, Clarence R. Conklin, Chicago, Ill., A. M. Fitzgerald, Walter T. Day, Springfield, Ill., for appellee.

Before MAJOR, Chief Judge, and DUFFY and LINDLEY, Circuit Judges.

LINDLEY, Circuit Judge.

Plaintiff instituted in the District Court a suit for declaratory judgment praying that the court declare that a certain Act of the Legislature of the State of Illinois, Ill.Rev.Stat. of 1933, Chapter 95, § 30 and the Executive Order issued by the Director of Insurance in pursuance thereof, approved by the Governor, are void and unconstitutional under the Constitution of the United States and that of the State of Illinois; that the action of the Supreme Court of Illinois in reversing a judgment in his favor entered by the Illinois Appellate Court on appeal from the Superior Court and remanding the same to the Illinois trial court for the purpose of permitting defendants to offer evidence, is without authority under the laws and Constitutions of the United States and of Illinois; that the seizure of plaintiff's property under said Act is void; that defendants account for the damages incurred by plaintiff; that all actions of the defendants taken with reference to the Illinois National Casualty Company from and after the time of the seizure are void; and that the District Court restrain the State Court from proceeding in the suit there pending under the further order of the court.

The exhibits to the complaint disclosed that in an earlier suit in the State Court plaintiff sought to have the said legislative act, the executive order issued thereunder and the seizure of the property declared void and unconstitutional under the Constitution of the State of Illinois and of the United States. They disclose further that in plaintiff's suit in the State Court, at the close of plaintiff's evidence presented to a master in chancery, defendants' motion for judgment dismissing plaintiff's suit was allowed; that the Illinois Appellate Court reversed this judgment and directed judgment in favor of plaintiff; that the Illinois Supreme Court originally affirmed this judgment but, upon rehearing, reversed it and remanded the cause to the trial court in order that defendants might be permitted to offer such evidence as they had. Thus, the Supreme Court ultimately declared that the Appellate Court was wrong in directing judgment for plaintiff upon his evidence without affording to defendants the right to present their evidence. Therefore, the cause came back to the Superior Court of Cook County for trial and is there still pending undetermined. A full and complete history of this litigation appears in the Appellate Court and the Supreme Court decisions reported in 328 Ill.App. 234, 65 N.E.2d 830; 291 Ill.App. 30, 9 N.E.2d 358, and 397 Ill. 141, 73 N.E.2d 412.

It is clear, therefore, that the plaintiff's suit in the State Court is still pending; that, in view of the fact that the cause has been referred to a new master, plaintiff must retake the evidence previously submitted and defendants may then present their case. The issues posed in that suit are, so far as the law is concerned, identical with those presented here. Furthermore, the State Court has the right to decide in a suit pending before it whether an Act of the Legislature or an executive order issued in pursuance thereof are in conflict with the Constitution of the United States and whether the seizure of the property conflicts with plaintiff's right under the United States Constitution. Consequently it is obvious that plaintiff can have all the relief to which he is entitled in the State Court, other than his prayer for an injunction against that court included in his complaint for declaratory judgment.

In this situation, defendants filed their motion to dismiss the instant action claiming that that court had no jurisdiction and that, if it did have jurisdiction, it should not exercise the same because of the comity existing between state and federal courts, in view of the fact that a suit is pending in the State Court in which all the relief prayed for can be had. The District Court held that it had jurisdiction but that because of comity it should not exercise it. Consequently the question presented here is whether the court rightfully decided that it should not exercise jurisdiction.

The Supreme Court of the United States has said in Ponzi v. Fessenden, 258 U.S. 254, at page 259, 42 S.Ct. 309, at page 310, 66 L.Ed. 607, at page 611; "We live in the jurisdiction of two sovereignties, each having its own system of courts to declare and enforce its laws in common territory. It would be impossible for such courts to fulfill their respective functions without embarrassing conflict unless rules were adopted by them to avoid it. The people for whose benefit these two systems are maintained are deeply interested that each system shall be effective and unhindered in its vindication of its laws. The situation requires, therefore, not only definite rules fixing the powers of the courts in cases of jurisdiction over the same persons and things in actual litigation, but also a spirit of reciprocal comity and mutual assistance to promote due and orderly procedure." The Court of Appeals for the Fourth Circuit in American Fidelity & Casualty Co. v. Service Oil Co., 164 F.2d 478, at pages 480, 481, said further: "`There could be no possible justification for dragging into the federal court the litigation of the issues pending in the state court, for the sake of obtaining a declaratory judgment as to a matter which will have no practical significance if the defendants prevail in the state court. * * *' There is a distinction between the jurisdiction of a court to grant declaratory relief and the exercise of discretion pursuant to that jurisdiction. Even though the court have jurisdiction to grant the declaratory relief * * * it should not exercise the jurisdiction `to try a controversy by piecemeal, or to try particular issues without settling the entire controversy, or to interfere with an action which has already been instituted' * * * We attempted to...