Commercial Security Bank v. Walker Bank & Trust Co.
Commercial Security Bank v. Walker Bank & Trust Co.
Opinion of the Court
This is an appeal from the failure of the United, States District Court for the District of Utah to vacate a restraining order entered against the conduct of a sheriff's sale ordered by a Utah state court.
The United States had secured a judgment in a Utah state court on February 11, 1971, against the Colombine Coal Company. The suit was a foreclosure action based on Colombine’s default on certain loans made to it by the Small Business Administration and the Area Redevelopment Administration. The Utah state court decreed foreclosure and a sheriff’s sale against the property of
• We must deal with one preliminary matter before reaching the issue herein presented. Appellees argue that the United States, not having intervened, joined or otherwise submitted itself to the jurisdiction of the trial court, cannot appeal that court’s ruling.
To hold that the United States cannot appeal the action of the court below is rebutted by application of the classic re-ductio ad absurdum method. To enjoin an act, the court must have jurisdiction of the person so enjoined. The United States appeared specially in the court below to argue that there was no jurisdiction to support the restraining order. Assuming arguendo that the court below had no such jurisdiction, is the United States to be denied an opportunity to appeal and be bound to honor the restraining order? This would in effect vest the court below with jurisdiction, by estoppel of the United States’ appeal, where none previously existed. Such a result is patently absurd. We find the United States Supreme Court decision in Zenith Radio Corp. v. Hazeltine Research, 395 U.S. 100, 89 S.Ct. 1562, 23 L.Ed.2d 129 (1969), aff’g in part 388 F.2d 25 (2d Cir. 1967), analogous to the instant case. Therein an enjoined non-party successfully appealed that portion of the lower court’s decision concerning that nonparty. Zenith is controlling. The United States may properly appeal specially in the instant case to contest jurisdiction.
The trial court’s action in restraining the sheriff’s sale is furthermore appealable under 28 U.S.C. §
We now reach the central issue involved in this appeal, that is, whether the trial court had jurisdiction to enter the order against the United States, when that party had not been served with process and was not in any manner before the court. It is axiomatic that before a court may enter a valid decree adjudicating the rights of an individual, that individual must in some fashion submit himself to the jurisdiction of the court or be subjected to the jurisdiction of the court by service of process. If the proceeding is in rem, some appropriate form of notice must be given any individual whose interest in the res is to be adjudicated. Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565 (1878). It is undisputed that there was no service of process made on the United States and that the United States did not submit to the jurisdiction of the court. Nor was the proceeding below in rem, so as to vest the court with jurisdiction to preserve the res pendente lite.
The court below bases jurisdiction to issue the order on 28 U.S.C. § 1651(a).
We are cognizant of the failure of the court below to comply with the requirements of F.R.Civ.P. 65 in issuing the order in question. Federal courts have held the requirements of F.R.Civ.P. 65 mandatory in cases concerning the rule.
Appellant advances three additional arguments in attacking the action of the court below. The United States asserts that the trial court’s action violates 28 U.S.C. § 2283,
The action of the trial court is hereby reversed, and the restraining order is vacated.
Reversed.
. “Ordinarily, only a person who was a party in the court below and who is aggrieved by the judgment or order can appeal therefrom. One who has become a party by intervention, substitution, or third-party practice is entitled, if aggrieved, to appeal.” 9 Moore’s Federal Practice § 203.06, at 715-16 (2d ed. 1971).
. The series of decisions resulting from the Dollar v. Land litigation commences at 81 U.S.App.D.C. 28, 154 F.2d 307 (1946).
. 28 U.S.C. § 1292 Interlocutory decisions . (a) The courts of appeals shall have jurisdiction of appeals from : (1) Interlocutory orders of the district courts of the United States, the United States District Court of the District of the Canal Zone, the District Court of Guam, and the District Court of the Virgin Islands, or of the judges thereof, granting, continuing, modifying, refusing or dissolving injunctions, or refusing to dissolve or modify injunctions, except where a direct review may be had in the Supreme Court; .
. 28 U.S.C. § 1651 Writs (a) The Supreme Court and all courts established by Act of Congress may issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law.
. Preston v. Purtell, 410 F.2d 234 (7th Cir. 1969).
. Martinez v. S. Ute Tribe of S. Ute Reservation, 249 F.2d 915 (10th Cir. 1957).
. KWTX Broadcasting Co. v. Commissioner of Internal Revenue, 272 F.2d 406 (5th Cir. 1959).
. United States ex rel. Wisconsin v. First Fed. Sav. & Loan Ass'n, 248 F.2d 804 (7th Cir. 1957).
. Id.
. United States v. Spadafora, 207 F.2d 291 (7th Cir. 1953).
. Mayflower Indus. v. Thor Corp., 182 F.2d 800 (3d Cir. 1950); Salvage Process Corp. v. Acme Tank Cleaning Process Corp., 104 F.2d 105 (2d Cir. 1939), cert. denied 308 U.S. 599, 60 S.Ct. 131, 84 L.Ed. 501; In re Rumsey Mfg. Corp., 9 F.R.D. 93 (W.D.N.Y. 1949), aff’d in part, rev’d on other grounds sub nom. McAvoy v. United States, 178 F.2d 353 (2d Cir. 1949).
. 28 U.S.C. § 2283 A court of the United States may not grant an injunction to stay proceedings in a State court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments.
Reference
- Full Case Name
- COMMERCIAL SECURITY BANK v. WALKER BANK & TRUST CO., Administrator of the Estate of Frank V. Colombo v. Special Appearance: UNITED STATES of America
- Cited By
- 28 cases
- Status
- Published