so, the court would naturally follow the directions of the United States Supreme Court in Toucey v. New York Life Insurance Company, 314 U.S. 118, 62 S. Ct. 139, 144, 86 L. Ed. 100, 137 A.L.R. 967, where the court said:
' * * * that the court, whether federal or state, which first takes possession of a res withdraws the property from the reach of the other.'
But is this a suit to control a res, namely, the funds in the hands of the Chelsea Title and Guaranty Company, or is it a suit to control and adjudicate upon the actions of individuals and corporations, namely, to declare the assignment to Johnson, a fraud and a nullity and to direct the defendants to cancel the judgment, etc.? This court feels that it is a personal action and, therefore, is not bound by Toucey v. New York Life, supra. However, the discussion in the Toucey v. New York Life case centered around the statute prohibiting the use of injunction by federal courts in state court matters and, I think, brings us to the most important issue, namely, the question presented by the motion to vacate the preliminary injunction because it is prohibited by Congressional enactment.
Section 379 of Title 28 U.S.C.A., provides as follows:
'The writ of injunction shall not be granted by any court of the United States to stay proceedings in any court of a State, except in cases where such injunction may be authorized by any law relating to proceedings in bankruptcy.'
The historical note is to the effect that the text of this act is derived from the act of March 2, 1793.
In 1920, the United States Supreme Court in Wells Fargo & Co. v. Taylor, 254 U.S. 175, at page 183, 41 S. Ct. 93, 96, 65 L. Ed. 205, speaking of this act, said:
'The provision has been in force more than a century and often has been considered by this court. As the decisions show, it is intended to give effect to familiar rule of comity and like that rule is limited in its field of operation. Within that field it tends to prevent unseemly interference with the orderly disposal of litigation in the state courts and is salutary; but to carry it beyond that field would materially hamper the federal courts in the discharge of duties otherwise plainly cast upon them by the Constitution and the laws of Congress, which of course is not contemplated. As with many other statutory provisions, this one is designed to be in accordance with, and not antagonistic to, our dual system of courts. In recognition of this it has come to be settled by repeated decisions and in actual practice that, where the elements of federal and equity jurisdiction are present, the provision does not prevent the federal courts * * * from depriving a party, by means of an injunction, of the benefit of a judgment obtained in a state court in circumstances where its enforcements will be contrary to recognized principles of equity and the standards of good conscience * * * .'
Does not this statement of principle meet the allegations in the present case? If the allegations are proven, would it not be unequitable and against the standards of good conscience to allow Taub, through his own agent or nominee, to collect this judgment from the man who accommodated him? I think so.
Defendant urges that the Wells Fargo & Co. v. Taylor case has been reversed by Toucey v. New York Life, supra, but in that case the court finds this statement, 314 U.S.AT page 136, 62 S. Ct.at page 145.
'However, the opinion cites the Wells Fargo and Essanay Film ( Essanay Film Co. v. Kane, 258 U.S. 358, 42 S. Ct. 318, 66 L. Ed. 658) cases in a footnote dealing with 'the recognized exceptions to section 265.' * * * The foundation of these cases is thus very doubtful. However, we need not undertake to re-examine them here since, in any event, they do not govern the cases at bar.'
Surely, with this wording it can;not be considered as reversing the principle laid down in the Wells Fargo case.
The court feels that the present complaint alleges a cause of action on all fours with the principle laid down in Wells Fargo & Co. v. Taylor, supra; that the principle therein laid down is still the law and binding upon this court. The motions, therefore, will be denied. Prepare an appropriate order.
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