The appointment by a circuit court of the United States of a
receiver of a corporation organized under the laws of a state does
not deprive a court of the jurisdiction to hear and determine an
application for a mandamus directing a recorder of mortgages in the
state to cancel and erase from the books of his office an
inscription against property of the petitioner in favor of the
corporation, the petition describing it as a mortgage on real
estate, and setting forth the interest of the corporation.
This Court questions the opinion of the Supreme Court of
Louisiana that the circuit court of the United States would have no
authority to order the erasure of an encumbrance from a mortgage
book within the state.
The copies of orders made in this cause by the circuit court of
the state after the entry of the final judgment to which the writ
of error from the supreme court of the state was directed, although
annexed to the petition for that writ, were too late in the cause
to constitute a ground for importing a federal question into
it.
This was a petition for a mandamus, addressed to a state court
of the State of Louisiana. The supreme court of the state, to which
the case was brought by writ of error, ordered the writ to issue.
The federal question stated in the opinion.
MR. JUSTICE BRADLEY delivered the opinion of the Court.
This case arose upon a petition filed in the Civil District
Court for the Parish of Orleans January 23, 1884, by Lanaux, the
defendant in error, praying for a mandamus against Eugene May, the
recorder of mortgages for the same parish, commanding him to cancel
and erase from the books of his
Page 127 U. S. 635
office all inscriptions against certain property of the
petitioner in favor of the Consolidated Association of the Planters
of Louisiana, particularly certain inscriptions designated in the
petition as being those of a mortgage on three certain lots in New
Orleans, dated June 6, 1843, given to secure the payment of a
subscription for fifteen shares of the capital stock of the company
of $500 each. The State of Louisiana, through its Attorney General,
the Consolidated Association of the Planters of Louisiana, through
its liquidators, and Henry Denis and others, holders of bonds of
the state secured by pledge of the mortgage above mentioned, were
made parties to the proceeding. The interest of the collateral
parties arose in this way: the mortgage was originally given by one
Lebau to secure the payment of his subscription for the fifteen
shares of stock, and, with the like mortgages of other subscribers,
and the other assets of the corporation, was pledged by the company
to the state as security for paying certain bonds issued by the
state in favor and aid of the company. Hence the interest of the
state. The other parties were holders of these bonds of the state,
and claimed to be subrogated to its rights. The petitioner alleged
that by an act of the Legislature of Louisiana passed in 1847, and
by the action of the liquidators of the company (which had become
insolvent), the stockholders were called upon to contribute $102
per share as a fund to meet the obligations of the state, payable
in yearly installments of $6 each, for the period of seventeen
years, and that all these installments had been paid on the fifteen
shares secured by the mortgage in question. The petitioner further
stated that in the case of
Association v. Lord (one of the
stockholders
in consimili casu), 35 La.Ann. 425, the
Supreme Court of Louisiana had decided that the payment of the said
installments discharged the obligations of the stockholders both as
to the subscription and mortgage. He further stated that the
mortgage kept his lots out of commerce, and that he had no adequate
relief except by mandamus to the recorder.
Prior to the filing of this petition, the Circuit Court of the
United States for the Eastern District of Louisiana had
Page 127 U. S. 636
appointed receivers of the said Consolidated Association of
Planters, and a copy of the petition was served on them.
The Attorney General of Louisiana appeared and filed an
exception to the proceeding by mandamus, claiming that the
petitioner could only have relief by a plenary suit,
via
ordinaria, and that it was in fact a suit against the state,
which could not lie without its consent, and that the state
declined to be made a party to the proceeding.
The recorder of mortgages appeared and contended that be could
not be required to cancel the inscription of the mortgages until it
had been judicially declared that they were not valid and existing
securities by proceedings
via ordinaria by way of citation
contradictorily had with the parties claiming the benefit of the
mortgages.
The holders of the state bonds, Denis and others, appeared and
denied the allegations of the petition and pleaded that the court
had no jurisdiction of the demand of the relator, because receivers
had been appointed to the Consolidated Association of Planters by
the circuit court of the United States, and that court only could
entertain jurisdiction of the matter.
The receivers of the association, appointed by the circuit
court, did not appear, and offered no objection to the
proceeding.
The cause was tried, and the civil district court, for some
reason not shown, dismissed the petition. The case was then
appealed to the Supreme Court of Louisiana, which on the first
hearing affirmed the judgment, but on a rehearing reversed it and
granted a mandamus as prayed.
On the question of jurisdiction raised by the plea of the
bondholders, the court said:
"The point made that this court is without jurisdiction because
receivers have been appointed for the Consolidated Association by
the United States circuit court is untenable when the object of the
proceeding is to erase from the mortgage book of the state an
encumbrance created by the law, and which the circuit court of the
United States would have no authority to order."
As this presents the only federal question raised in the
case,
Page 127 U. S. 637
we have no occasion to consider any other. If the state court
had jurisdiction of the proceedings, its judgment cannot be
impeached on the present writ of error, for that is the only
objection made to it on federal grounds. The objection is that the
court has no jurisdiction, because the United States court had
appointed receivers of the association. The simple fact that the
said court had appointed such receivers is the only fact disclosed
in the record, so far as the proceedings in the circuit court of
the United States are concerned, until after final judgment had
been rendered in the Supreme Court of Louisiana, and this fact only
appeared by the statement of the defendants Forstall and Denis in
their answer. After final judgment of the supreme court was
rendered, John Calhoun, who had become sole receiver, together with
Denis, one of the state bondholders, presented to the supreme court
a petition for an order to call on the other defendants to join
them in an application for a writ of error in this Court, and, if
they refused, then that such writ be allowed to the petitioners
alone. To this petition was annexed a copy of an order of the
circuit court, made December 29, 1883, in a cause in which William
Cressey was complainant and the Consolidated Association of
Planters were defendants, for an injunction and the appointment of
receivers, enjoining the defendants from disposing of the
association's assets or property and appointing John Calhoun, T. J.
Burke, and George W. Nott as receivers in the cause, and directing
them forth with to take possession of all the property and assets
of the said association, and proceed to administer the same under
the direction of the court and collect all accounts due said
association, and all parties having possession of assets,
securities, books, papers, vouchers, or effects of said association
be ordered to deliver up the same to said receivers, and that said
receivers be vested with all the rights and powers of receivers in
equity in this cause.
A subsequent order, a copy of which was also annexed to the
petition for writ of error, continued Calhoun and Burke as
receivers and specified more minutely their powers and duties, not
materially differing from the above. By another order made in June,
1884, a copy of which was also annexed to the
Page 127 U. S. 638
petition, Burke was relieved and Calhoun was continued as sole
receiver.
The other defendants having declined to join in the writ of
error, the court made the following order on the application for
writ of error:
"
Order"
"The exceptions filed by Forstall's Sons and Denis to the
jurisdiction of the District Court were filed after the general
issue had been pleaded. They do not appear to have been urged in
the lower court, as no evidence was offered to show jurisdiction in
the Fifth Circuit Court, Eastern District of Louisiana, and were
not passed upon, as the judgment of the lower court dismissed the
application on a question of proceeding. On appeal, no allusion was
made to them, and no action of the appellate court was asked on
them."
"The exceptors have taken a chance for a decision in their favor
on the merits. After getting one against them, they cannot be
allowed the relief now sought.
Mays v. Fritton, 20 Wall.
414."
"The application for the writ is refused."
"New Orleans, March 26, 1885."
"E. BERMUDEZ"
"
Chief Justice"
We think that copies of the orders made by the circuit court,
which were annexed to the petition for a writ of error, were
produced in the case altogether too late to constitute any ground
for importing a federal question into the cause, although we do not
perceive that it would have made any difference in the result if
they had been presented regularly in the court of first
instance.
Taking the case, then, as it stood when the final decision of
the Supreme Court of Louisiana was made, we have simply to decide
whether the single fact that the circuit court had appointed
receivers of the association deprived the state court of all
jurisdiction of the petition for mandamus. We have seen that the
Supreme Court of Louisiana decided that it did not, and we have
seen the reason why they supposed it did
Page 127 U. S. 639
not -- namely that the circuit court had no authority to order
an erasure of a mortgage on the records of the state.
We should hesitate to concur with the state court in the opinion
that the circuit court of the United States would have no authority
to order the erasure of an encumbrance from the mortgage book of
the state. The courts of the United States, in cases over which
they have jurisdiction, have just as much power to effectuate
justice between the parties as the state courts have. But we do not
suppose that the jurisdiction of the state court in the present
case depends on the incapacity of the circuit court to afford
relief, but on its own inherent powers, and the fact that such
jurisdiction has not been taken away by the proceedings in the
federal court. We held in a number of cases that the jurisdiction
of the state courts over controversies between parties, one of whom
was proceeded against under the late national bankrupt law, was not
taken away by the bankruptcy proceedings, although a suit against
the bankrupt might be suspended by order of the bankruptcy court
until he obtained or was refused a discharge.
See Eyster v.
Gaff, 91 U. S. 521;
Claflin v. Houseman, 93 U. S. 130;
Mays v.
Fritton, 20 Wall. 414;
McHenry v. La Societe
Francaise, 95 U. S. 58. In the
case of
Bank of Bethel v. Pahquioque
Bank, 14 Wall. 383, we decided that suit might be
brought in a state court against a national bank although it had
made default in paying its circulating notes and a receiver of the
bank had been appointed by the Comptroller of the Currency.
A
fortiori a company may be sued whose assets have been placed
in the hands of a receiver in an ordinary suit in chancery.
It is objected, however, that no action can be commenced against
receivers without permission of the court which appointed them, and
reference is made to
Barton v. Barbour, 104
U. S. 128, and
Davis v. Gray,
16 Wall. 203. This is not an action against the receivers, but
against the consolidated association and the recorder of mortgages.
The receivers were notified of the proceeding by being served with
a copy of the petition, so as to give them an opportunity of
objecting if they saw fit to do so. They did not appear, and
Page 127 U. S. 640
made no objections. The state bondholders were made parties, and
they did appear. We are not concerned, however, with the
proceedings, or the merits of the case, but only with the question
of the jurisdiction of the court. Of this we have no doubt. Perhaps
the circuit court, on application of the receivers, might have
interfered to prevent the petitioner from proceeding in the state
court had they thought proper to make such an application, but they
did nothing of the kind.
This was not the case of a proceeding in the state court to
deprive the receivers of property in their possession as such. That
would have been a different thing, and the state court would not
have had jurisdiction for such a purpose. This was only a case for
enforcing the right of the petitioner to have cancelled on the
books of the recorder a mortgage which had been satisfied and paid,
not interfering in any way with the possession of the receiver. We
are satisfied that the state court had jurisdiction of the case,
and
The judgment of the supreme court is affirmed.