Mercantile Bank of the Americas, Inc. v. West Porto Rico Sugar Co.
Mercantile Bank of the Americas, Inc. v. West Porto Rico Sugar Co.
Opinion of the Court
delivered the following opinion:
The motion for the sale of the property of the West Porto Pico Sugar Company, which motion was presented on the 18th day of June, 1921, by counsel for the receivers, having been submitted to this court after due notice, it appeared that all the counsel in the ease, including several attorneys for numerous interveners, consented except counsel for the Banco Com-ercial. During the argument of the latter it developed that the only serious ground of opposition to this motion was based upon the claim that this court was without jurisdiction to order such sale; it was conceded by counsel for the Banco Comercial that this court did have jurisdiction over the original bill which was filed by a New York bank against two defendants, both of whom were citizens of Porto Pico; then the claim was further made that by reason of the fact that numerous interventions were filed shortly thereafter, many of which were filed by corporations or individuals, citizens of Porto Pico, the Honorable Peter J. Hamilton, who was judge of this court in the month of January, 1921, acted beyond his power and authority in appointing the two receivers who have been operating the property of the West Porto Pico Sugar Company up to the present time.
This question of jurisdiction of course is of primary importance. If it be true that the judge of this court at the time that he appointed two receivers was without lawful authority to do so, the present judge of this court is clearly without authority to direct said receivers to make a sale of the property of the defendant corporation. Therefore, the important question to be decided at this time is as to whether the
It is well known that the jurisdiction of all Federal courts within the limits of the forty-eight Hnited States is limited; it is also admitted that the jurisdiction of the district court of the Hnited States for Porto Rico is peculiarly restricted by virtue of the provisions of the act of Congress known as the Jones Pill; it is my conviction that in all cases of doubt jurisdiction should be declined, inasmuch as the presumption in favor of jurisdiction does not exist in any Federal court, the presumption, if any, being against such jurisdiction. This theory is that which will be the policy of this court as long as the present judge shall preside heroin. But it is equally true that when no doubt exists in the mind of the presiding judge of a Federal court, the duty of assuming jurisdiction and retaining the same must be observed. Therefore the present inquiry resolves itself into a question of doubt or no doubt.
The facts may be outlined briefly thus: The original bill was tiled by the Mercantile Bank of New York, a corporation with its domicil in New York, against two defendants, both citizens of Porto Rico, and a sum largely exceeding throe thousand dollars ($3,000) was involved. Every one of the eleven lawyers in this case, including counsel for the Banco Comercial, admit that the Honorable Judge Hamilton bad the power to name the first receiver- who failed to qualify. Toiler the same judge appointed two receivers who did qualify. Yerv soon thereafter counsel for the Banco Comercial applied to intervene and this application was granted. The Banco Comercial having intervened in March of this year proceeded to submit testimony to the special master during May and June of this pros-
Counsel for tbe Banco Comercial submitted to this court five decisions in support of bis contention that tire appointment of tbe two receivers was void. These decisions have been studied by myself with as much care as I have been able to give to them during the time since tbe oral argument on tbe 20th day of June, 1921. My own analysis of these five decisions convinces me that they do not sustain tbe contention of counsel for tho Banco Comercial, but that they do sustain tbe position taken by counsel for tbe receivers.
Taking the case in Consolidated Gas Co. v. Newton, 256 Fed. 238, it appears that the city of New York tried to intervene in its corporate, capacity in an equity suit already brought against certain large gas light companies in tbe city of New York, and tbe Federal court held that tbe city of New York in its corporate capacity bad no interest in the litigation whatever, because specific statutes previously passed by the legislature of tbe state of New York bad provided other remedies open to the city. Reference was specifically liad to legislation which provided that tbe public service commission could take action in
The next case cited by counsel for the Banco Comercial is found in Cutting v. Florida R. & Nav. Co. 45 Fed. 444. ’ In this case Judge Pardee expressly states in his opinion that the intervener, whose name was Wilson, should be denied the right to intervene, and the grounds of denial were not merely the fact that Wilson and the defendant corporation were both citizens of the state of Florida, but also Judge Pardee expressly set forth in his opinion that Wilson was seeking to thrust a foreign litigation into other people’s suits; and furthermore, that the dispute between Wilson and the defendant corporation concerned lands not in the possession of the receiver. . Coming to the case now under consideration, the receivers were in possession of all the property of the West Porto Rico Sugar Company at the time that the Banco Comercial intervened. Such intervention seems to me to be entirely in order; and in accordance with the true rules cited by counsel for the original complainant and by coun
The various decisions which have been cited in support of said motion for sale of the property need not be analyzed in this opinion, but it is proper to set forth that they may be found in United States v. Lawton, 110 U. S. 146, 28 L. ed. 100, 3 Sup. Ct. Rep. 545; Farmers’ Loan & T. Co. v. Lake Street Elev. R. Co. 177 U. S. 61, 44 L. ed. 671, 20 Sup. Ct. Rep. 564; Re Metropolitan R. Receivership, 208 U. S. 90, 52 L. ed. 403, 28 Sup. Ct. Rep. 219; Park v. Now York, L. E. & W. R. Co. 70 Fed. 641; Osborne & Co. v. Barge, 30 Fed. 805; Belmont Nail Co. v. Columbia Iron & Steel Co. 46 Fed. 336; Henderson v. Goode, 49 Fed. 887; Society of Shakers v. Watson, 15 C. C. A. 632, 37 U. S. App. 141, 68 Fed. 730, and Cole v. Philadelphia & E. R. Co. 140 Fed. 944. Of these cases, which seem to me must control the present controversy, the one that has impressed me most is a decision by Circuit Judge Laeombe, rendered in 1895, reported in Park v. New York, L. E. & W. R. Co. 70 Fed. 641. This was a suit brought by a citizen of Vermont in the Federal court in New York city to enforce an express lien upon the income and earnings of a New York railroad corporation, but no lien was claimed upon all the property of the said New York railroad corporation. The court took possession of the railroad itself and appointed receivers, the company not objecting. Later a mortgagee, itself a New York corporation, filed its petition for intervention, and therewith filed a cross bill for foreclosure of its mortgage, and there was also brought an independent foreclosure suit, and the latter was
Before concluding this opinion, it is only fair to the counsel for the Banco Comercial that reference should be made to the decision in United Electric Securities Co. v. Louisiana Electric Light Co. 68 Fed. 673. In this case the Federal court in Louisiana had done nothing except to issue a restraining order, and there had been no appointment of any receiver. The bill in equity asking for the restraining order had been filed by a .Maine corporation against a Louisiana corporation. Soon thereafter two interventions were filed, one by a Massachusetts corporation and the second by a Louisiana corporation. Judge Pardee expressly held as follows: “Where jurisdiction rests upon the diverse citizenship of complainant and defendant, and, during the proceedings, a third party, who is a citizen of the same state with defendant, intervenes, the court will have no jurisdiction of his controversy with defendant, unless the controversy between complainant and defendant is one which draws to the court the possession and control of defendant’s property, in which the intervener claims some interest.”
It is thus very evident to my mind that if the very learned Judge Pardee, whom I personally knew and admired, could, come back to this life and be called upon to decide a question
Another case cited by counsel for the Banco Comercial is found in Forest Oil Co. v. Crawford, 42 C. C. A. 54, 101 Fed. 849. A bill in equity was filed in 1897 in the Federal court of Pennsylvania by a citizen of Nevada against a Pennsylvania corporation. Numerous parties, most of whom were also citizens of Pennsylvania, sought to intervene; but before .any action on these interventions was taken, a receiver had been appointed to operate a farm, tinder the surface of which were supposed to be found oil and gas. The circuit court of appeals at Philadelphia expressly sets forth that the ruling of the'district court permitting these interventions was based upon the supposed fact that there was a fund in the possession of the district court in which these interveners had an interest, but that such finding was an error, and the appellate court says that this statement was clearly incorrect, and further holds that the bill itself was improperly filed. Therefore, the circuit court of appeals not only denied the right to intervene, but also dismissed the original bill; and the original complainant and the interveners had to pay the costs. The opinion further sets forth that the original complainant, who lived in Nevada, had an adequate remedy at law. In the case now before this court counsel for the Banco Comercial frankly admitted in his oral argument that the original bill in this case was a proper one. Thus there is seen at once the very plain and the very great ■difference between this present case now before the court and the decision in 101 Fed. 849.
It is proper to observe that much criticism of recent years lias been published by the press and uttered by many men of prominence against both state courts and United States courts
Reference
- Full Case Name
- MERCANTILE BANK OF THE AMERICAS, INC. v. WEST PORTO RICO SUGAR COMPANY, INC., Dfts.
- Status
- Published