William Howard Taft

“ It is happily not a frequent occurrence that an attorney for a debtor seeks the creditor and urges him to bring suit against his client, or turns over his client's list of creditors to an attorney soliciting business, to say nothing of the violated pledge to the judge and opposing counsel. Moreover, good faith required this counsel to have advised the federal District Court of the pendency of the state court proceedings. ”

“ But we do not agree with either of the courts below that the vindication of the cause of comity and good faith as between the two courts should be limited to punitive proceedings against the lawyer in the state court whose pledge to that court was broken.
In this country, in which in every state we have courts of concurrent jurisdiction under the federal and the state authority, it is of the highest importance that conflict of jurisdiction should be avoided. ”

“ On the 25th of February, the superior court of Cook county entered an order allowing one Max Goldenberg, a stockholder, to file in the Hurwitz suit his intervening petition, which did not in effect change the nature of the relief asked, but elaborated a description of details of the conspiracy of the Gumbinskies to loot the Woolen Mills Company, and of a conspiracy of the Woolen Mills management to evade the jurisdiction of the state court by delay in the appointment of receivers there and by the collusive answer and consent of the Woolen Mills to the appointment of a federal court receiver. ”

“ More than this, circumstances which should have no influence lead the parties in interest to prefer one court to another in the selection of the person to be appointed as receiver, with the hope on behalf of those in charge of the embarrassed corporation that the appointment may fall to one whose conduct will be in sympathy with, rather than antagonistic to, the previous management of the corporation, in the hands of which the embarrassment has arisen. ”

“ In the meantime, the federal court here and in other districts proceeded with the administration of the affairs of the defendant corporation. As Judge Lurton said, it would lead to absurd results and inflict unwarranted injury upon innocent parties, if the alleged oral agreement of the attorney in the state court, of which there was no record, can be invoked to invalidate the proceedings here.'
We differ radically from the trial court as to the purpose and effect of the conduct of Cowan in securing the postponement of the hearing for a receiver in the state court. ”

“ As between two courts of concurrent and coordinate jurisdiction, the court which first obtains jurisdiction and constructive possession of property by filing the bill is entitled to retain it without interference and cannot be deprived of its right to do so, because it may not have obtained prior physical possession by its receiver of the property in dispute ”

“ When the debtor corporation appears, however, and consents to such appointment, the court must rely on counsel to inform it as to all the facts. If essential facts are deliberately withheld, counsel may well forfeit his right to practice further, or be otherwise disciplined. ”

“ If the court finds that by misrepresentation or by a false pledge another court has delayed action by which the possession of the res would have been taken before the application in hand was made, it should insist that the parties and counsel who have misled the other court must give that court full opportunity to remedy the wrong done. ”

“ Sturges, on the other hand, the controversy was between the jurisdiction of a state court in winding up a corporation and the distribution of its assets which included navigable vessels and the jurisdiction of the federal court which had taken actual possession of the vessels to enforce the collection of maritime liens on them. ”

“ We do not impute to Stern or Johnston actual knowledge of Cowan's fraudulent method of securing a postponement in the state court when they filed the bill of complaint. Cowan says he did not tell them. Johnston denies knowledge of it, and there is no evidence that they were informed. But, as explained, their client, the Worsted Sales Company, the complainant, was charged with knowledge of it. ”

“ Mr. Gesas: Yes, if the court please, and there has been a loss of over $3,000,000 in one year in the operation of this business, which practically has been neglected on account of no action taken by these directors, and if any continuance is granted here at all it must be-well, I think the court has a right to hear this matter ”