Penn General Casualty Co. v. Schnader,
294 U.S. 189 (1935)

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U.S. Supreme Court

Penn General Casualty Co. v. Schnader, 294 U.S. 189 (1935)

Penn General Casualty Co. v. Pennsylvania ex Rel. Schnader

No. 431

Argued January 11, 14, 1935

Decided February 4, 1935

294 U.S. 189


1. Whether, in a suit involving the possession and control of property which is the subject of a suit pending in a federal district court, a state court has given proper effect to the proceedings and order of the federal court is a federal question reviewable on appeal. P. 294 U. S. 194.

2. It is an established principle, applicable to both federal and state courts, that where these courts have concurrent jurisdiction of suits in rem or quasi in rem, the court first assuming jurisdiction over the property may maintain and exercise that jurisdiction to the exclusion of the other. This is the settled rule with respect to suits in equity for the control by receivership of the assets of an insolvent corporation . P. 294 U. S. 195.

3. When the two suits have substantially the same purpose and the jurisdiction of the courts is concurrent, that one whose jurisdiction is first invoked by the filing of the bill is treated as in constructive possession of the property and as authorized to proceed with the cause, at least where process subsequently issues in due course. P. 294 U. S. 196.

4. The jurisdiction conferred on the federal district courts by the Constitution and laws of the United States cannot be restricted by state legislation. P. 294 U. S. 197.

Page 294 U. S. 190

5. Where the object of a suit in a state court is the liquidation by a State officer of an insolvent domestic insurance company, and there is no showing that the interests of creditors an shareholders will not be adequately protected by this procedure, the case is a proper one for the federal district court, in the exercise of judicial discretion, to relinquish its jurisdiction, though previously acquired, in favor of the administration by the state officer. Pennsylvania v. Williams, ante, p. 294 U. S. 176. P. 294 U. S. 197.

6. Although the federal district court first acquired jurisdiction of a suit to liquidate an insolvent insurance corporation, a state court may properly exercise its jurisdiction to authorize a state officer to make application to the District Court to relinquish its jurisdiction in favor of the State administration. P. 294 U. S. 198.

316 Pa. 1, 173 A. 637, reversed.

Certiorari, 293 U.S. 547, to review a judgment of the Supreme Court of Pennsylvania which affirmed a decree directing the state Insurance Commissioner to take possession of and liquidate the property of an insolvent domestic insurance company. Prior to the institution of proceedings in the state court, a suit for the appointment of receivers and for an injunction was filed in the federal district court, which the state supreme court held was without jurisdiction.

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