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change of location, became a fixed and unvarying boundary, unaffected by changes afterwards occurring in either the new channel or in the old bed of the river around Walnut Bend. The circumstance that, after the change of channel was effected, that old bed was still under water, did not prevent or delay the transformation of the former middle line of the channel around the bend from a shifting to a fixed boundary. That boundary was no longer subject to be affected by changes in the old river bed, or in its shore lines as they formerly existed.
It is to be inferred from the evidence that the emergence of land where the bed of the river formerly was around Walnut Bend occurred a considerable time after the river had made for itself a new main channel through Bordeaux Chute. Such filling up of that old river bed as occurred was by a gradual process; towheads, sandbars, and islands making their appearance above the surface of the water and gradually enlarging, while one or the other of the formerly existing shore lines encroached as the water receded from it, until space formerly occupied by the river was no longer under water. Whether it was or was not a fact that this new land so formed first made its appearance as additions to land on the Arkansas side of the boundary, the fact that the boundary had ceased to be a shifting one before the new land was added to the old prevented the change from having the effect of enlarging the state of Arkansas or of diminishing the area of the state of Mississippi, or of adding to or lessening what was included within the boundary lines of the subdivisions of land in the two states which were contiguous and had as a common boundary a line which formerly, but no longer, was a shifting one. Though it was by means of gradual and imperceptible accretions that new land was formed or built up from where the Arkansas shore line formerly was, until it extended beyond the boundary line of the two states, such a change in the surface conditions, in so far as it occurred after the boundary ceased to be a shifting one, was without effect on the title or ownership of the tracts the common boundary of which was fixed.
The claims asserted by the plaintiffs included no land on the Arkansas side of the center line of the old channel around Walnut Bend, as that line was located when the river made for itself a new channel through Misissippi land, part of which was patented by the United States to the plaintiffs' predecessors in title. Our conclusion is that the court was in error in declining to pass on questions duly raised by the pleadings and evidence in the case, on the ground that the land in dispute is not a part of the state of Mississippi.
Because of that error, the decree is reversed, and the cause is remanded for further proceedings not inconsistent with this opinion.
O'NEIL, Insurance Com'r, et al. v. WELCH et al.
(Circuit Court of Appeals, Third Circuit. July 23, 1917. Rehearing Denied
October 4, 1917.)
1. COURTS M259—FEDERAL COURTS-JURISDICTION.
The federal court in the exercise of its general equity jurisdiction has power to appoint a receiver on a stockholder's bill, determine a corporation's solvency, and distribute its assets, and no state statute can impair
or destroy that power. 2. COURTS Om489(1)-FEDERAL COURTS-JURISDICTION.
Under Act Pa, June 1, 1911 (P. L, 599), declaring that whenever any domestic insurance company is insolvent, or is found after examination in such condition that its further transaction of business will be hazardous to its policy holders, or to its creditors or to the public, the Insurance Commissioner may through the Attorney General apply for an order directing such corporation to show cause why the Insurance Commissioner should not take possession of its property, conduct its business, and distribute its assets, the state courts have special jurisdiction to determine the solvency of an insurance company and distribute its assets, which jurisdiction is concurrent with that of the federal courts, to appoint a receiver on a stockholder's bill, determine such corporation's solvency, and
distribute its assets. 3. COURTS 493(1)→JURISDICTION-CONCURRENT JURISDICTION.
Where two courts have concurrent jurisdiction in the sense that each has the same jurisdiction, such jurisdiction should not be concurrently invoked ar exercised, and that court which first obtains jurisdiction has the right to proceed to a final determination without the interference of
the other. 4. COURTS 497—JURISDICTION–TEST.
Control over the property in controversy is the test of jurisdiction. 5. COURTS 500_JURISDICTION-CONCURRENT JURISDICTION.
Under Act Pa. June 1, 1911 (P. L. 599), providing that whenever any domestic insurance company is insolvent or is found to be in such condition that its further transaction of business will be hazardous to its policy bolders, or its creditors, or the public, the Insurance Commissioner may through the Attorney General apply for an order directing such corporation to show cause why the insurance commissioner should not take possession of its property, conduct its business, and distribute its assets. The Insurance Commissioner by the Attorney General filed a suggestion in the state court and obtained a rule directing the insurance company to show cause why the commissioner should not take possession of its property and why the court should not order liquidation of its business and dissolution of the company. Prior to the hearing on the rule to show cause, but after it had been granted, a nonresident stockholder of the corporation filed a bill in the federal court praying dissolution of the corporation and distribution of its assets, and a receiver was appointed by the federal court. The receiver immediately took possession of corporate property in his reach. Held that, though the state court had not possession of the corporation's property, yet, as such remedy was open to it and was necessary to a determination of the proceeding therein instituted, the state court, though it had with the federal court concurrent jurisdiction, first obtained jurisdiction, which could not be ousted by the appointment of a receiver by the federal court; the rule that actual seizure of property is the test of jurisdiction not being applicable in view of the nature of the proceeding in the state court. For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes
6. CONSTITUTIONAL LAW Cm129_IMPAIRMENT OF OBLIGATION OF CONTRACTS
Notwithstanding Const. U. S. art. 1, § 10, inhibiting the states from enacting laws impairing the obligation of contracts, and Const. Pa. art. 1, $ 7, an insurance company has no charter right in remedies prescribed for its•dissolution, and the state may modify such remedies without violating
the constitutional provisions. Appeal from the District Court of the United States for the Eastern District of Pennsylvania; J. Whitaker Thompson, Judge.
Suit by Homer G. Welch and another against the Union Casualty Insurance Company, in which Samuel W. Cooper was appointed receiver. Petition of J. Denny O'Neil, Insurance Commissioner, and Francis Shunk Brown, Attorney General of the Commonwealth of Pennsylvania, was dismissed (238 Fed. 968), and petitioners appeal. Decree reversed.
Joseph L. Kun and William M. Hargest, Deputy Attys. Gen., and Francis Shunk Brown, Atty. Gen., for appellants.
Percival H. Granger and J. Howard Reber, both of Philadelphia, Pa., for appellees.
Before BUFFINGTON, MCPHERSON, and WOOLLEY, Circuit Judges.
WOOLLEY, Circuit Judge. This is an appeal from a decree of the District Court dismissing a petition of the Insurance Commissioner and Attorney General of the Commonwealth of Pennsylvania, asking the court to revoke its appointment of a receiver. The question is one of jurisdiction growing out of a conflict between State and Federal courts. As the facts are fully stated in the opinion of the District Court ([D. C.] 238 Fed. 968), only a brief outline is necessary to the present discussion,
The Union Casualty Insurance Company was a corporation of the Commonwealth of Pennsylvania. Under insurance laws in force at the time of its incorporation (Act of April 4, 1873, P. L. 20; Act of May 1, 1876, P. L. 53), the Insurance Commissioner of the Commonwealth had general supervision of insurance companies, with power to inquire concerning their solvency and management and to proceed against them when insolvent or fraudulently conducted. By the Act of June 1, 1911, the insurance laws of the Commonwealth of Pennsylvania were in part repealed and with new provisions were reenacted in a comprehensive system of State control, covering the examination, regulation, rehabilitation, liquidation and dissolution of insurance companies incorporated and doing business under the laws of that Commonwealth (Acts of June 1, 1911, P. L. 567, 581, 598, 599, 602, 604, 607). The Act of June 1, 1911 (P. L. 599) provides, among other things, a method of proceeding against insolvent and fraudulently conducted insurance companies, which, so far as it affects the question in issue, is as follows:
“That whenever any domestic insurance company, association, society, or order, including all corporations, associations, societies, and orders which are subject to examination by the Insurance Commissioner, or which are doing Om For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes
or attempting to do, or representing that they are doing, the business of insurance in this Commonwealth ;
(a) is insolvent;
or (e) is found, after an examination, to be in such condition that its further transaction of business would be hazardous to its policy-holders, or to its creditors, or to the public
the Insurance Commissioner may, through the Attorney General, apply to the Court of Common Pleas of Dauphin County, or to the Court of any county in which the principal office of such corporation is located, for an order directing such corporation to show cause why the Insurance Commissioner should not take possession of its property and conduct its business, and for such other relief as the nature of the case and the interests of its policyholders, creditors, stockholders, or the public may require.
"Sec. 2. On such application, or at any time thereafter, such court may, in its discretion, issue an injunction restraining such corporation from the transaction of its business or disposition of its property until the further order of the court. On the return of such order to show cause, and after a full hearing, the court shall either deny the application or direct the Insurance Commissioner forthwith to take possession of the property and conduct the business of such corporation, and retain such possession and conduct such business until, on the application either of the Commissioner, through the Attorney General, or of such corporation, it shall, after a like hearing, appear to the court that the ground for such order directing the Insurance Commissioner to take possession has been removed, and that the corporation can properly resume possession of its property and the conduct of its business.
"Sec. 3. If, on a like application and order to show cause, and after a full hearing, the court shall order the liquidation of the business of such corporation, such liquidation shall be made by and under the direction of the Insurance Commissioner, who shall be vested by operation of law with title to all of the property, contracts, and rights of action of such corporation as of the date of the order so directing him to liquidate.
On November 15, 1916, the Insurance Commissioner of the Commonwealth of Pennsylvania, by the Attorney General, filed a suggestion in the Court of Common Pleas of Dauphin County (hereinafter called the State court), in conformity with the provisions of the quoted Act, and obtained a rule directed to The Union Casualty Insurance Company (hereinafter called the Insurance Company) "to show cause why the Insurance Commissioner should not take possession of its property, and to show cause why the Court should not order the liquidation of the business of the said company and the dissolution of the said corporation.” Pursuant to the provision of the Act, that “On such application such court may
issue an injunction restraining such corporation from the transaction of its business or disposition of its property,” that court, at the time it received the suggestion and granted the rule, ordered, that:
"Pending the further order of this court, the said Union Casualty Insurance Company of Philadelphia, Pa., its officers, agents and employees, are hereby enjoined and restrained from transacting any of the business of said company or disposing of any of its property.”
The rule was made returnable November 29, 1916. On that day the Insurance Company appeared and filed its answer to the suggestion, with a prayer that the rule be continued to December 19, 1916. The continuance was granted. On December 18, 1916, the day before the return day of the rule, Homer G. Welch, a citizen of New Jersey, and Consolidated Investment Company, a corporation of Delaware, filed a stockholders' bill in the District Court of the United States for the
Eastern District of Pennsylvania (hereinafter called the Federal court), alleging solvency of the Insurance Company and praying the appointment of a receiver for the conservation of its property pending the adjustment of its difficulties. Although the Insurance Company had already appeared and answered in the proceeding in the State court, it voluntarily appeared in the Federal court and filed an answer concurrently with the bill, admitting its allegations; whereupon the Federal court appointed a receiver. The receiver immediately took possession of all assets of the Insurance Company within his reach, and served certified copies of his appointment upon the Attorney General of the Commonwealth of Pennsylvania and upon the judges of the State court.
The State court, on December 19, 1906, the return day of the rule to show cause, acting apparently in ignorance of the proceeding in the Federal court of the day before, proceeded with its hearing and entered an order directing the dissolution of the Insurance Company and the liquidation of its assets by the Insurance Commissioner in the manner prescribed by law, the decree being expressly based on the finding that the Insurance Company was insolvent and that its further transaction of business would be hazardous to its policyholders, its creditors and the public. On the next day, December 20, 1916, the Insurance Commissioner and the Attorney General, being then informed of the action of the Federal court, hastened to the Federal court and presented a petition praying that it revoke its appointment of a receiver. The Federal court granted a rule to show cause why its order of appointment should not be vacated, and upon its return, dismissed the petition and discharged the rule, in accordance with an opinion filed ([D. C.) 238 Fed. 968). This is an appeal from that decision.
The denial of the petition by the Federal court was based upon its understanding that its appointment of a receiver and his appropriation of the res prior to the decree of dissolution but subsequently to the institution of proceedings in the State court vested jurisdiction in the Federal court so fully and completely that neither law nor comity required its surrender to the State court. Judging from the consideration given by the learned District Judge to the general subject of conflict of jurisdiction between State and Federal courts, we infer that the broad subject, with its many phases, was as elaborately discussed before him as it was before us, raising many questions which we think are not in issue.
As we view the case, it does not present questions :-whether a Federal court has power to decree the dissolution of a corporation of the Commonwealth of Pennsylvania in a proceeding in which its jurisdiction first attached; whether a Federal court has authority to supersede and take away the general control over insurance companies vested by State statute in the Insurance Commissioner, before the Insurance Commissioner has in the exercise of his control begun proceedings in a State court; whether a Federal court has authority to supersede and annul action by a State court after proceedings there have been begun and jurisdiction has been acquired; or, generally, whether a state law can limit or impair the jurisdiction of a Federal court conferred by Act