# Supplemental Brief for Respondent — Toucey v. New York Life Ins. Co. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386401_0448%3A09 ## Record - **Collection:** Supreme Court brief - **Document type:** Supplemental Brief for Respondent - **Published:** January 1, 1941 - **Citation:** 314 U.S. 118 ## Text CeaAgi-s ans 4, Supreme Court of the United States OCTOBER TERM, 1941. nelly? 15 SAMUEL R. TOUCEY. PETITIONER, VS. NEW YORK LIFE INSURANCE COMPANY, A CORPORATION, RESPONDENT. RESPONDENT'S SUPPLEMENTAL. BRIEF. ~ SAMUEL W. SAWYER, RicH’.23» S. RIGHTER, Hor ic" F. BLACKWELL, JR., li’ ‘delity Building, Kei >is City, Missouri, 3 Counsel for Respondent INDEX Summary of the Argument Argument— State courts enjoin parties from prosecuting actions in the federal courts on substantially the same grounds on which the federal courts enjoin pro- ceedings in state courts State courts enjoin parties from proceeding in other stat: courts under circumstances similar or comparable to the facts of the present case The English cases are in accord with the American ee. Dial vs. Reynolds, 96 U. S. 340, distinguished Conclusion TABLE OF CASES Akerly vs. Bilas, 15 Wis. 401 Baldwin vs. Iowa State Travelling Men's Association, 283 U. S. 522 (1931), 1. ¢. 525 Beckford vs Kemble, 1 Sim. & St. 7 Brown vs. Trent, 35 Okla. 164, 128 Pac. 895 (1912) Carron Iron Co. vs. MacLaren, 5 H. L. Cas. 416, 24 L. J. Ch. 620, 3 W. R. 597 Chicago, R. I. & P. Ry. Co. vs. Callicotte, (8 Cir.) 267 Fed. 799 (1920) | Cole vs. Cunningham, 133 U. S. 107 (1889) Denver, etc., R. Co. vs. Ben Terte, 284 U. S. 284, $2 Sup. Ct. 152, 76 L. Ed. 295 Dial vs. Reynolds, 96 U. S. 340 Fowler vs. Westerhoff Bros. Co., 104 Atl. 198 (1918) (N. J. Chancery) Howard vs. Cannon, 11 Richardson's Eq. 23. 75 Am. Dec. 736 (S. Car., 1859) Hull vs. Burr, 234 U. S. 712. 1. ¢. 723 30, ¢ Il INDEX Hunt vs. New York Cotton Exchange, 205 U. S. 322 (1906), 1. c. 338 Ingraham vs. National Salt Co.. 139 Fed. 684 (E. D. N. Y., 1905), Aff. 143 Fed. 805 (1906) In re Dawley, 99 Vt. 306, 131 Atl. 847 (1926) Kansas City Rys. Co. vs. MeCardle, 288 Mo. 354, 232 S. W. 464 (©1921) Keith vs. Alger, 114 Tenn. 1, 85 S. W. 71 (1905) Life Insurance Co. vs. Fisher, 5 Tenn. Civ. App. 232 (1915) . Marchant vs. Wannamaker, 176 S. Car. 369, 180 S. E. 356 (1935) Marshall vs. Holmes, i141 U. S. 589 (1891), 1. ¢. 599 Michigan, etc., R. R. Co. vs. Mix, 278 U. S. 492, 49 Sup. Ct. 207, 73 L. Ed. 470 Mock vs. Kennedy, 11 La. Annuai 525, 66 Am. Dec. - 203 (1856) aes 14 Moebius vs. McCracken, 261 Mich. 409, 246 N. W. 163 (1932) 1] New York, C. & St. L. R. Co. vs. Perduie, 97 Ind. App. 517, 187 N. E. 349 (1933) sesh sh ataas ot oe aed Oe Oakley vs. Ramsey, 27 L. T. 745 35 O'Haire vs. Burns, 45 Colo. 432, 101 Pac. 755, 131 Am. St. Rep. 191, 25 L. R. A. (N.S.) 267 (1909)... 20, 22 Princess Lida vs. Thompson et al., Trustee, 305 U. S. OE gc esc aliens ede ee 17, 30 Providence & N. Y. S. S. Co. vs. Hill Mfg. Co., 109 . U. S. 607 (1883) 37 Prudential vs. Merritt-Chapman & Scott ee 163 Atl. 894 (N. J. Chancery, 1932) s 12 Reagan vs. Dick, 233 Pac. 159 (Colo., 1925) _ a Sandage vs. Studebaker Bros. Mfg. Co., 41 N. E. 380 (Indiana, 1895) 26 State ex rel. N. Y.,C. & St. L. R. Co. vs. Nortoni, 321 Mo. 764 (en banc), 55 S. W. 2d 272 (1932)... 22, 24 Steelman vs. All Continent Corp., 301 U. S. 278 (1936) acelin hy Oy Dey OO The Home Insurance Co. vs. Howell, 24.N. J. Eq. 238 17 Toledo Scale Cc. vs. Computing Scale Co., 261 U. S. 399 (1923) INDEX I! Tredigar vs. Windus, 44 L. J. Ch. 268; L. R. 19 Equity 607; 32 L. T. 596; 23 W. R. 511 35 Treinies vs. Sunshine Mining Co. et ai., 308 U. S. 66 (1939), i. c. 78 32 Twaits vs. Penn. R. Co., 77 N. J. Eq. 103, 75 Atl. 1010 Wedderburn vs. Wedderburn, 2 Beavan 208 (1840) 33 Wells Fargo & Co. vs. Tavier, 254 U. S. 175 (1920), l. c. 182 36, 37 Wonderly vs. Lafayette County, 150 Mo. 635, 51 S. W. 745, 73 Am. St. Rep. 474, 45 L. R. A. 386 (1899) "5, 12, 26, 27 STATUTES Judicial Code, Section 262 (28 U.S. C., Sec. 377) 28, 31, 38 Judicial Code. Section 265 (Sec. 379, 28 U. S. C.: R. S., Sec. 720) 2,3, 4, 19, 36. 38 TEXTBOOKS 32 C. J. 117 cee 22 32 C. J., Sec. 137, pp. 115 et seq. | 20 Supreme Court of the United States OCTOBER TERM, 1941. No. 587. SAMUEL R. TOUCEY, PETITIONER, VS. NEW YORK LIFE INSURANCE COMPANY, A CORPORATION, RESPONDENT. RESPONDENT’S SUPPLEMENTAL BRIEF. In Respondent's Brief it is shown that one of the long established and wel! recognized grounds of injunctive relief by supplemental bill is to prevent the re-litigation in another court of issues finally settled by a decree in equity (Respondent’s Brief, p. 17 et seq.’. We also showed that the uniform decisions of this Court for at least the last fifty years have held that Section 265 of the Judicial Code (Sec. 379, 28 U.S. C.; R. S., Sec. 720) does not prohibit the issuance of an injunction to prevent a party from re-litigating in a state court issues already adjudicated by a federal equity court (Respondent's Brief, page 21 et seq.). We pointed out tnac the present is such a case and, therefore, that if the uniform prior decisions of this Court are still the law the ruling of the Eighth Circuit in this case (102 Fed. 2d 16 and 112 Fed. 2d 927) must be affirmed. This Court has, however, granted certiorari in several cases bearing no similarity cn the facts to this case and having the single common characteristic that lower fed- eral courts had enjoined the parties for various reasons from proceeding in state courts. At least three of these cases were decided by this Ccurt by four to four votes and have been set down for argument on the opening day of the Cctuber term. The remaining case (of which we know) is still pending here on petition for certiorari. It is therefore evident that this Court is primarily interested in a questicn of judicial policy rather than in the justice or injustice of the ruling in any particular case. We can only guess the sources of this new interes! in a subject on which the law, both federal and state, as well as the law of England and its dominions, has long been settied. We believe that some members of this Court doubt the wisdom of permitting the federal courts to enjoin parties from proceeding in state courts under any circumstances and therefore wish to review the purpose and scope of Section 265 wiin the object of changing its present inter- pretation. We shall, therefore, assume for the purpose of this supplemental brief that the question for review is this: Is a federal injunction against proceedings in a state court such an unwarranted interference with the processes of that court, leading to such conflict and dissonance that Section 265 of the Judicial Code should be invoked to abol- ish it under all circumstances. Such injunctions at the fo4 Aw present time issue only under exceptional circumstances (Respondent’s Brief, >. 35). The question is whethe: th exceptions snould be abolished. It is demonstrated in Respondent's Brief that upon principle and authority, including many decisions of this Court, the injunction issued by the district court in this case was a jawful and proper exercise of its equity powers, not an unseemly interference with the state court’s juzis- diction. To have withheld the injunction here might have resulted in a state court judgment directly contrary to the equity decree aud, hence, an undesirable conflict between the rulings of the two courts, the thing Section 265 of the Judicial Code was designed to prevent. So this court and the inferior courts have held. It occurred to us that in this brief it might be helpful to the Court to broaden the field of inquiry to ascertain what the state courts, including the Missouri courts, would have done were tne positions of the two tribunais reversed, or were the respective actions pending in two state courts. Whether a state court would have enjoined proceedings in the Federal Court if the positions of the two courts were reversed, and whether one State court would have enjoined another state court were both ac- tions pending in state courts, has an important bearing on the construction to be given Section 265. If injunc- tions are issued by the state courts against proceedings in Federal courts, and against proceedings in other state courts under the same circumstances under which Fed- eral injunctions against state court proceedings have here- tofure been sanctioned, it would seem reasc :able to con- strue Section 265 to preserve the same powers to the Fed- eral courts in order to protect the co-ordinate jurisdiction of the Federal courts and to prevent their being deprived of a power which all other sirnilar courts possess in those instances heretofore recognized by this Court as excep- tions to the literal language of Section 265. SUMMARY OF THE ARGUMENT. The principie of law that a court of equity will en- join the parties or those in privity with them from reliti- gating in the courts of other jurisdictions a question al- ready settied by final decree is not confined to the federal courts but is of universal application. The state courts have invoked it to enjoin. actions pending in federa! courts, to enjoin actions pending in other state courts, and to enjein actions pending in other courts within the state. Likewise, the federal courts have invoked it to enjoin par- ties from proceeding in other federal courts. It is the law of England. This court's present construction of Section 265 of the Judicial Code (Sec. 379, 28 U. S. C.; R. S., Sec. 720) which recognizes the case at bar as an exception to the prohibition of the statute has merely enabled the fed- eral courts to rule in harmony with all other courts pos- sessing coordinate jurisdiction in our system of juris- prudence. To repudiate this principle or withhold its application in this case would seriously impair the power of the federal court, and would be contrary, not merely to a long line of decisions by this court and the lesser federal courts, but to a rule of universal application in all courts throughout the United States and the English speaking world. n ARGUMENT. STATE COURTS ENJOIN PARTIES FROM PROSECUTING AC. TIONS IN THE FEDERAL COURTS ON SUBSTANTIALLY THE SAME GROUNDS ON WHICH THE FEDERAL COURTS EN- JOIN PROCEEDINGS IN STATE COURTS. If the position of the federal and the state courts in the case at bar were reversed the Missouri Supreme Court would have directed that the prosecution of the federal action be enjoined. In Wonderly v. Lafayette County, 150 Mo. 635, 51 S. W. 745. 73 Am. St. Rep. 474, 45 L. R. A. 386 (1899), the plaintiff’s assignor, a resident of Illinois, had judgment in the Federal Court for the Western District of Missouri against the defendant on certain bonds issued by the county. Afterward this judgment was assigned to the plaintiff, a resident of Missouri, who sued the defendant in the Circuit Court of Lafayette County. The county set up as a defense that the judgment in the Federal Court was procured by fraud for the following reasons: The state courts, in other litigation, had previously held the issue of which these bonds were a part invalid. The Federal Court. in other litigation, had previously held them valid. The real owner of the _ bonds, a citizen of Missouri, caused the original action to be brought in the Federal Court by the resident of Illinois alleging that he was the owner of the bonds in order to secure the benefits of federal jurisdiction. Hav- ing procured the Federal judgment, and the term having gone by so that it could not be set aside, the Illinois resi- dent assigned the judgment to the resident of Missouri in order that he might enforce it in tne state court and in order that the suit on the judgment might not be re- 1,.0ved to the federal court. The answer asked that 6 the judgment in the Federal Court be set aside and that the plaintiff be enjoined against the prosecution of a writtof scire facias sued out in the Federal Court. On plaintiff's motion the trial court struck out all of this portion of the answer and, judgment going for the plaintiff, the Mussour: Supreme Court on appeal held that the answer stated a good defense to the action on the judgment and a good ground for equitable relief. After reviewing the authorities in other jurisdictions. the court said, 1. c. 749: The law which required the owner of the bonds to be a citizen of another state, in order to give the federal court jurisdiction, was a law of that court. and the plaintiff's act of masking as Owings, and thus gaining entrance, which, with his own face, he could not have gained. was a fraud on that law: and since, by that means, he evaded the law of this state applicable to his cause of action, as pronounced by this court, his judgment is to be deemed as in fraud of the law of this state, and not entitled to the protec- tion of its courts. Freem., Judgm., Sec. 566; Dunlap v. Cody. 31 Towa 260; Duringer v. Moschino, 93 Ind 495, and after discussing the authorities further said, i. c. 750 We quote the words of these high courts and dis- tinguished jurists to slow in what estimation they hold the conduct of those who, by cunning, would pervert the administration of justice. There is no difference. in principle, between the fraudulent con- coction of a scheme that brings the defendant within the jurisdiction of a court of a foreign state and the fraudulert concoction of a scheme that brings him within the jurisdiction of the federal court, which otherwise would not have had jurisdiction over him. In whatever aspect we view it, we cannot fai! to see that the judgment in question was obtained by a fraudulent abuse of the court which rendered it, and » fraudulent scheme by which the defendant was tricked out of the defense it had a right to make, and could have made in the only forum in which the real plaintiff could have sued. ~] and further said. 1]. ec. 750: A suit in equity to set aside a judgment in no sense assails the court in which the judgment was rendered. It is simply a proceeding in personam, and the decree adjudges the rights of the parties inter sese in relation to that judgment. Story. Eq. Jur.. Sec. 875; Black, Judgm.. Sec. 919: Pearce v. Olney, 20 Conn. 544; Marshall v. Holmes, 141 U. S. 589, 12 Sup. Ct. 62. A judgment of a United States circuit court sitting in this state is to be accorded such effect, and such effect only, as a judgment of a circuit court of this state. Black, Judgm., Sec. 938: Crescent City Live-Stock Co. v. Butchers’ Union Slaughter-House Co., 120 U.S. 141, 7 Sup. Ct. 472. The federal circuit courts have never claimed for themselves higher au- thority than the highest courts of original jurisdic- tion of the state in which they sit, and the lofty spirit in which those courts administer justice repels the idea that they would claim that a judgment of theirs, procured by fraud and abuse of their jurisdiction should be held exempt from a direct attack in the only forum in which the injured party could obtain relief (italics ours). The Court expressly pointed out that the judgment of the Federal Court had become fina! with the passing of the term and, therefore, could not be set aside by the Federal Court ‘‘and, the defendant being a citizen of Mis- souri could bring no independent suit in equity in that tribunal.”” The court said that the writ of scire facias had doubtless ‘taken its course’ pending the appeal and that. therefore. a writ of injunction would, doubtless. be without effect. The similarity tn substance between that case and this is striking. Here Toucey was defeated in his orig- inal action and a decree dismissing his bill on the merits duly entered (R. 43). No appeal was taken. Thereupon on December 28, 1937 (R. 22), more than a year after the dismissal of the original equity action, one James Shay, a citizen of the District of Columbia, brought suit against respondent in the Circuit Court of Jackson County, Mis- 8 sourl (R.53), alleging that he was the assignee of Toucev’'s cause of action. The assignment is shown at R. 62. It is attached to a stipulation (R. 60) respecting the testimony of James Shay which states, in effect, that Shay had known one of Toucey’s attorneys for six or seven years: that he had never met Toucey; that he was requested by Toucey's attorney to accept an assignment of the cause of action; that he never knew anything about the nature of the claim except what the attorney told him; that he ex- pected to account to Toucey for the proceeds collected: that he gave Toucey nothing of value for the assignment Shay further states in the stipulation (R. 61): I accepted the assignment of the cause of action as an accommodation to Mr. M. W. Borders, Jr., it be- ing my understanding that the legal title to the cause of action being in my name and the suit being in my name, and my being a resident of the District of Co- lumbia, there would be no diversity of citizenship as between me and the New York Life Insurance Com- pany within the meaning of the statutes relating to the removal of causes of action. The purported assignment from Toucey to Shay was therefore a mere fraudulent device for the purpose of enabling Toucey, through Shay. to relitigate in the stat: court the same issues adjudged by the decree in equits in the Federal Court and to forestall any action by the Federal court by preventing the defendant from removing the case. It could not remove a suit brought by a citizen of the District of Columbia. The Court will observe that Shay’s action was merely a suit at law on the policy for disability benefits claimed to be due Toucey, alleging (R. 54) that Toucey had paid all the premiums due and that the policy was in ful! force and effect and that Toucey had performed ;]] of its terms and conditions. entirely contrary to the al.egations cf Toucey’s original petition (R. 26 et seq.) and to the findings of the learned trial judge (R. 44 ef seg.). As the Circuit Court of Appeals said (102 Fed. 2d 1. c. 20): g After that final adjudication has been made and decree entered, a law case for recovery of disability benefits has been ingeniously made out on the face of a petition in the state court by simply omitting the facts as they were established between the parties in the federal equity suit. The pleader has omitted to show that Mr. Toucey made application to the in- surance company for reduction of his policy and that pursuant to that application the alteration and reduc- tion of the policy as to premiums and benefits was made and that he had recognized the change in the contract by making a payment of premium at the re. duced premium rate. And further said, |. c. 20: Mr. Toucey can not by mere concealment or change of form of procedure obtain an effective ad- judication contrary to the adjudication in the federal court. Both his claims to life insurance and to dis- ability benefits under the policy have been settlea against him. If it was wrong for Wonderly to shift his cause of action back and forth between a citizen of Missouri and a citizen of Illinois to secure adjudications by courts he thought were favorable to him, thus arousing the manifest indignation of the Missouri Supreme Court, why is it not wrong for Toucey to do so? If it is wrong for Toucev to do so why should not the Court to which he first resorted stop him from doing so? It is a court of equity. It cannot be that this Court is less inclined to discourage the in- justice to a litigant which would result from such an in- cenious but wrongful device than are the courts of the various states. Reagan v. Dicl:, 233 Pac. 159 (Colo., 1925), presents the identical situation here except that the original action was brought-in the Colorado state court and the subse- quent action in the federal court. An equity suit was begun and proceeded to final decree. Afterward the los- Ing party began an action in the Federal Ceurt for the 10 District of Coloradce to re-litigate the same question, which subsequently was appealed to the Circuit Court of Appeals where it was pending. A decree was then obtained from the thon The The Colorade state court enjoining the further prosecu- of the federal action. It was affirmed on appeal! Supreme Court said, |. c. 160: That the court, federal or state, which first be- gins the exercise of its jurisdiction, holds it, is clear (15 C. J. 1176), and it follows, of course, that such a proceeding cannot be enjoined or prevented by en- joining the parties. It has been held, however, that, when the jurisdiction of a United States court has first attached, it may enjoin the parties from proceed- ing in a state court concerning “the identical con- troversies therein pending,” and we see no answer to the proposition that the state court in a converse case may do the same. It has actually been done. Home Ins. Co. v. Howell, 24 N. J. Eq. 238, cited with approval in Moran v. Sturges, 154 U. S. 256, 14 5. Ct. 1019, 38 L. Ed. 981. Court further said, |. c. 160: The complaint in the present action alleges that there was a former action between the parties, see 74 Colo. 293, 294, 220 Pac. 990. wherein the present plaintiffs were defendants, in which they were granted an injunction against interference with their posses- sion and use of certain mining property, and that the proceedings in the United States court were begun for the purpose of retrying the issues tried in that former suit, which would be unlawful. Riverdale Mills v. Mfg. Co., 198 U. S. 188, 25 S. Ct. 629, 49 L. Ed. 1008. The lower court found this to be true, and we cannot review that finding. It follows that, upon the record before us, the procedure in the federal court is not the first but the second exercise of jurisdiction over litigation, not only begun, but already in judg- ment in the state court, and the injunction in the present case is not void. While the original state court action in Reagan V. Dick was in rem involving the rights of the parties to a mining property, the issuance of the injunction enjoin- 11 ing the parties from proceeding in the federal court is not placed on any such ground but on the ground of the previous adjudication by the Colorado court. In Moebius v. McCracken, 261 Mich. 409, 246 N. W. 163 (1932), a minor by next friend sued at law for per- sonal injuries in an Ohio court from which the action was removed to the federal court for that district. On a com- promise the federal court entered judgment for the plain- tiff for an agreed sum. Six years later, being then of age, she brought two suits in the Michigan state court, one at law for damages for the injuries and tne other in equity asking that the judgment of the federal court in Ohio be declared a nullity and that the defendant be en- joined from setting up the Ohio judgment as a bar to her sult at law. The groynds of the bill were that the com- pensation adjudged the federal court was inadequate for the injuries, that the federal court in arriving at the amount of the judgment considered only the compromise agreement and did not review the merits of the claim and that she had suffered great pain, expense and dis- ability since. She alleged that the defendant could not be served in the State of Ohio and that the judgment in the Ohio federal court could not be vacated because the term had long passed. On appeal from an order below dismissing the bill the court held that it stated a good cause of action, saying, |. c. 167: While we will not refuse recognition to a foreign judgment regularly entered. nor, as a rule will we set aside such a Judgment in an independent equity proceeding, by exercising chancery power over the parties, nevertheless, when it appears from the face of the judgment itself that it was entered in accord- ance with a compromise settlement, as a mere for- mality designed to lend strength to the agreement affecting minors’ rights and without the benefit of testimony o° a judicial examination of the merits of the case or the fairness of the compromise, a court of equity, in performance of its duty to protect the in- terests of minors, should give relief. To deny plain- tiff the right to bring the suit may result in depr: ing her ae anv remedy at law for what mav be a flx:- vrant fraud practiced on her. The Court cites and relies on Wonderly v. Lafayette County, supra, In Prudential v. Merritt-Chapman & Scott Corp., 163 Atl. 694 0N. J. Chancery, 1932), the controversy arose upon the death of one Baker on whose life insurance aggregat- ing $1,000,000 had been written by various companies. The benefici: rv sued on the policies, on one in the Federa! Court for the District of New Jersey. on one in the New Jersey Supreme Court and on the others in the New York Supreme Court. The compuaies filed suits for the can- cellation of the policies in the New Jersey Chancery Court on the ground that the issuance of the policies had been procured by the fraud of Baker and asked that the bene- ficilary be enjoined from prosecuting the law actions pend- ing the determination of the issues in the equity suits. The Court held that the companies were entitled to the injunctions because in point of time the equity suits hac been “first commenced” and that the right of the com- panies to set up their equitable defenses in the law ac- tions was not “an adequate remedy” such as to entitle the law actions to have pniority. The Vice Chancello: considered the authorities carefuily The principle upon which the Court proceeded is stated as follows, |. c. 895. 896: That this court has power to enjoin one subject to its jurisdiction from the prosecution of an action at law pending the determination of the validity of the instrument upon which such law action is based and alleged to be void for fraud is elementary; ana this, also, whether such action is pending in the law courts of this or of a foreign jurisdiction, and irre- spective of precedence of time between this and t:+ law courts, providing the remedy here is more com- plete and adequate than at law Home Insurance Company v. Howell, 24 N. J. Eq. 238: New Jerse 13 Zine Company v. Franklin Iron Company, 29 WN. J. Eq. 422; Margarum v. Moon, 63 N. J. Eq. 586, 53 Atl. 179; Bigelow v. Old Dominien Copper Mining & Smelting Company, 74 N. J. Eq. 457, 71 Atl. 155; Le- high Valley Railroad Company v. Andrus, 91 N. J. Eq. 225, 109 Atl. 746; Caruso v. Caruse. 103 N. J. Eq. 487, 143 Atl. 771. * * * The principle lving at the foundation of this rule was early recog- nized and applied in England by Lord Ellenbor- ough, just after the close of the eighteenth century, in Payne v. Drew 4 East 523, cited in the United States ex rel. Rigg. v. Board of Superrisors of John- son County, 72 U. S. (6 Wall.) 196, 18 L. Ed. 768. 776, and also in Taylor v. Carryl, 61 U. S. (20 How.) 583, 617, 15 L. Ed. 1028, 1032. Keith v. Alger, 114 Tenn. 1, 85 S. W. 71 (1905), holds that a state court can and will enjoin the enforcement of the decree cr judgment of a federal court where it 1s shown that it was procured by fraud extrinsic to the questions examined and determined in the action, say- ing. |. c. 76: There is no doubt, as we think, that a state court may entertain a bil! to restrain the enforcement of a decree or judgment of a federal court on the ground that the latter was procured by fraud. This is an independent right of action that does not involve a retrial of the issues disposed of in such former cause. It has been held that the federal courts may entertain such a cause of action against a judgment of a state court. The reasons and the authorities on which they are based are fully considered in the case of Marshall v. Holmes, 141 U. S. 589, 12 Sup. Ct. 62, 35 L. Ed. 870; likewise in the case of National Surety Com- pany v. State Bank, 56 C. C. A. 657, 120 Fed. 593, 61 L. R. A. 394. The same reasons contro] an application in a state court to restrain the enforcement of a de- cree or judgment rendered by a federal court. There, however, the fraud submitted to the Tennessee Court had already been submitted to and ruled on by the federal court in a proceeding by supplemental bill 14 and the state court therefore held that since the express issue raised had been ruled by the federal ccurt, its ruling was res judicata and the state court bill should be dis- missed. The original suit in the federal court had been to set aside a conveyance of real estate for the vendor's fraud and to require the return of the vendee’s monev. The equity suit in the state court was on the ground that the vendee had acquiesced in the transaction by, sub- sequently, with knowledge of the facis, making convey- ance of the property to another for a valuable con- sideration. Mock v. Kennedy. 11 La. Annual 525, 66 Am. Dec. 203 (1856). The plaintiff brought a suit the object of which was to secure a separation of her property from that of her husband after his insolvency and suit by creditors. Judgment had been secured against the hus- band in the federal court to which the wife was not a party, from which a writ of execution had issued to the marshal to seize the husband's property. The Court held that an injunction was properly issued below against the marshal to abstain from the commission of a trespass by executing the writ against property adjudged in the state court action to be the separate property of the wife. In Howard v. Cannon, 11 Richardson's Eq. 23, 75 Am. Dec. 726 (S. Car., 1859), Cannon assigned to Howard as trustee for the benefit of Cannon's creditors. Then others recovered a large money judgment against Cannon in the Federai Court for South Carolina and the marshal was proceeding to seize and sell certain slaves which Cannon had assigned to Howard. The court held that the Com- missioner below was right in enjoining the creditors from seizing and selling the assigned property pursuant to the Federal Court judgment, saying, |. c. 738: The second ground of appeal assails the reasoning expressed in the pleas, that the subject of contro- versy was within the exclusive jurisdiction of the circuit court of the United States, which rendered 15 the judgment of Cummings & Styron v. Cannon. We have every disposition to avoid even the appearance of a conflict with the tribunals of the United States created under the constitution, and we have no dis- position to quibble between restraining processes and restraining persons from proceeding under them. But sureiy there is a substantial difference between undertaking to revise the judgment and procedure of a co-oidinate or even superior tribunal, and inter- fering to restrain parties from acts not authorized hy our equals or superiors. It does not impugn in any respect the judgment of the federal tribunal. that we interpose to prevent parties under our control from abusing the process of that court. It has granted a judgment against Cannon, and we make no offer to restrain the execution of their judgment from the estate of Cannon. But we do not perceive that, under a judgment egainst Cannon, the estate of Howard or any other person can be legitimately seized and sold. The judgment of Cummings & Styron is left in- tact, and we simply determine that they or their agent had no authority to seize the property of a stranger under pretense of :ts operation. To deter- mine otherwise would be to adjudge that a plaintiff in execution against a pauper might obtain satisfac- tion from any rich inhabitant of the state. Ingraham v. National Salt Co., 139 Fed. 684 (E. D. N. Y.. 1905), Aff. 143 Fed. 805 (1906). There a suit bv attachment against real estate was begun in the federa! court in New York. Later a receivership action was be- gun in the state court and the receivers sold the attached property. Afterward judgment was recovered in the fed- eral court but the state court enjoined the marshal from making <.le of the attached property. The federal court held that it would not enjein the receivers from pros- ecuting their injunction suit because, the mere issuance of a writ of attachment not amounting to possession, the receivers had the prior actual custody of the real estate involved and, therefore, the prior right of disposition. In Twaits v. Penn. R. Co., 77 N. J. Eq. 103, 75 Atl 1010 (1910), plaintiff sued for personal injuries in New 16 Jersey and the case was removed to the federal court where the defendant set up a release as a defense. Plain- tiff then filed a second su:t, this time in equity in the state court to enjoin the defendant from asserting the release as a defense on the ground that under the cir- cumstances set forth in the bill it would be «unfair and inequitable for the defendant to set up the release. The defendant contended that the New Jersey Chancery Court was Without jurisdiction because that of the federal court was exclusive. In deny g this contention and in up- holding the jurisdicticn of the state court in equity the court said, |. c. 1012-13: Since the gravamen of this bill is that the rail- road company, the defendant in the lawsuit pending in the other jurisdiction, is setting up as a defense a receipt claimed to operate as a release, which. under the circumstances alleged in the bill, it is charged it is inequitable for it to do, I find that there is no principle of comity or public policy which for- bids this court from passing upon the equitable claim: of the complainant, and exercising whatever of its jurisdiction it finds proper under the circumstances. My opinion is that this would be so even if the ac- tion at law were pending in one of the courts of a sister state; therefore, a fortiori, would it be true where the suit at law was pending in New Jerse, and was removed by the defendant to the federal court, where, I assume, it could also have removed this equitable action had it seen fit to do so? The jurisdiction at law is not interfered with by this equitabie action. Whatever jurisdiction the Circuit Court of the United States has power to exercise with respect to the action at law is left unimpaired. and is not taken over into this court in this action in any way. The sole thing sought by the complain- ant here is equitable jurisdiction over the defend- ant to prevent it from inequitable conduct. J en- tirely agree with the expression of the learned Chan- cellor as above expressed that there is no doubt or dif- ficulty about the :ight of the exercise of the power of equity of its jurisdiction undcr such circumstances. A 17 It therefore becomes necessary to investigate the equitable claims of the complainant for the purpose of seeing whether thev are well grounded. See also: / In re Dawley, 99 Vt. 306, 131 Atl. 847 (1926). Marchant v. Wannamaker,. 176 S. Car. 369. 180 S. E. 350 (1935). The Home Insurance Co. v. Howell. 24 N. J. Ea 238. Akerly v. Bilas, 15 Wis. 401. Brown v. Trent, 35 Okla. 164, 128 Pac. 895 (1912). Fowler v. Westerhoff Bros. Co., 104 Atl. 198 (1918) (N. J. Chancery). Chicago, R. I. & P. Ry. Co. v. Callicotte. (8 Cir.) 267 Fed. 799 (1920%. WE Many additional cases could be cited. The foregoing, however, clearly show that the state courts do not hesitate to enjoin the parties from proceeding in the federal courts or to enjoin the officers of those courts where the liti- gant does not have an equitable remedy in the federal court or where the federal remedy is not adequate. The circumstances under which such injunctions issue from the state courts are comparable to those under which they issue from the federal courts. It may be that in earlier times some doubt was enter- tained respecting the right of state courts to enjoin parties from proceeding in Federal courts. If so that doubt has long since been resolved in favor of the right, on which this court recently placed it’ stamp of approval in Princess Lida v. Thompson et al., Trustee, 305 U. S. 465 (1938). There the trustees under a trust filed an account in the Common Pleas Court of Fayette County, Pennsylvania. which, in the absence of exceptions. was confirmed. Five years later a second partial account was filed in the same court by the two surviving trustees. On the following day two of the beneficiaries brought suit in equity 1g against the two surviving trustees and the administrators of the deceased trustee in the District Court for the West- ern District of Pennsvivania alleging mismanagement of the trust. praving that the trustees be removed and that the defendants account for and repay the losses of the trust. The trustees moved to dismiss the bi:l in the federal court for lack of indisyensable parties and be- cause the state court had exclusive jurisdiction. The fed- eral court over-ruled the motion and ordered the defend- ants to answer, reserving the question of jurisdiction. Upon the petition of the trustees the state court en- joined the beneficiaries from prosecuting the action in the federal court and this was affirmed by the Pennsylvania Supreme Court. Meanwhile the federal court had en- joined the trustees from further prosecuting the injunc- tion proceedings in the state court and proceeded to try the case. On certiorari to the Supreme Court of Pennsyl- vania this court held that the Pennsylvania Court ac- quired a prier jurisdiction in equity by virtue of the fil- ing of the accounts and was in a position enabling it to give complete relief and, therefore, the District Court for the Western District of Pennsylvania was without juris- diction of the subsequent equity suit brought to secure the same relief which the state court was already in a po- sition to afford, and could and should be enjoined. This court said, |. c. 465-466: Certain it is, therefore, that if both courts were to proceed they would be required to cover the same ground. This of itself is not conclusive of the question of the District Court's jurisdiction, for it 1s settled that where the judgment sought is strictly in personam, both the state court and the federal court, having concurrent jurisdiction, may proceed with the litigation at least until judgment is obtained in one of them which may be set up as res judicata in the other. On the other hand, if the two suits are im rem, or quasi in rem, so that the court, or its officer. has possession or must have contro! of the property which is the subject of the litigation in order to pro- ceed with the cause and grant the relief sought the 19 jurisdiction of the one court must yield to tha‘? of the other. We have said that the principle applicable to both federal and state courts that the court first as- suming jurisdiction over property may maintain and exercise that jurisdiction to the exclusion of the other, is not restricted to cases where property has been actually seized under judicial process before a second sult is instituted, but applies as well where suits are brought to marshal assets, administer trusts, or hiq- uidate estates, and in suits of a similar nature where, to give effect to its jurisdiction, the court must con- trol the property. The doctrine is necessary to the harmonious cooperation of federal and state tribunals. And further said, .. c. 467: The Common Pleas Court could not effectively exercise the jurisdiction vested in it, without a sub- stantial measure of control of the trust funds. Its proceedings are, as the court below held, quasi in rem, and the jurisdiction acquired upon the filing of the trustees’ account is exclusive. The District Court for the Western District of Pennsylvania is without juris- diction of the suit subsequently brought for the same relief, and the petitioners were properly enjoined from further proceedings in that court. It would of course be wreng to say that the courts of the state and nation have the unrestricted right.each to enjoin parties from proceeding in the other. It would be equally wrong and equally unreasonable to say that they cannot do so under any circumstances. There is a well recognized intermediate ground in which either may, as the law now stands. properly do so. It wili not promote the ends of justice to so far impair the power of the na- tional courts to administer equity as to say that while under proper circumstances the state courts may enjoin parties from proceeding in them, they, on the contrary, cannot in any event restrain parties from proceeding in state tribunals. Especially is this true where as we have shown in respondent's original brief this Court has re- peatedly said that Congress entertained no such intention in enacting Section 265 of the Judicial Code. 20 STATE COURTS ENJOIN PARTIES FROM PROCEEDING IN OTHER STATE COURTS UNDER CIRCUMSTANCES SIMILAR OR COMPARABLE TO THE FACTS OF THE PRESENT CASE. State courts readily enjoin their citizens from pros- ecuting actions in the courts of sister states where suf- ficient grounds are shown for the interposition of a court of equity as where the party seeking the injunction will be subjected to fraud or oppression, where the purposs of the foreign suit is to secure some unfair advan- tage under the law er the facts or where, as here, one of the parties is attempting to re-litigate in another juris- dictlon issues areeey settled in equity by the enjoinin. court. See. 32.C. J., Sec. 137, pp. 115 et seq. Great num- bers of cases hav e gains this principle. In O'Haire v. Burns, 45 Colo. 432,-101 Pac. 755, 131 Am. St. Rep. 191, 25 L. R. A. «N. S.) 267 (1909), O’Haire had originally sued Burns and others in equity asking that he be decreed the owner of a one sixth interest in certain mining properties pursuant to the terms of what appears to have been a “grub stake” contract. Burns prevailed and O’Haire was adjudged to have no interest, the decree being affirmed by the Coloradc Supreme Court. After- ward while Burns was in Iowa on business O’Haire sued him there at law for $300,000 damages. Burns then brought a second equity suit in Colorado setting up the facts and alleging that O’Haire sovtht in the Iowa suit to relitigate issues vreviously disposed of by the Colo- rado court and asked that O’Haire be enjoined from pros- ecuting the Iowa suit. A demurrer to the complaint was over-ruled and the defendant eiected to stand on‘it. A final decree was entered below and the preliminary in- junction made permanent. On appeal the Colorado Su- preme Court affirmed the decree below and said, 11 Pac. 1. c. 757-8: We have no doubt but that Mr. Burns could have pleaded in the Iowa action the former litigation in this state and the result thereof as a complete de- 21 fense. and, if established by proper evidence, it would have received the full faith and credit bv the Towa court to which it is entitled under the Constitution of the United States. but why compel him to go over 560 miles to a foreign jurisdiction from that in which both parties reside. or from where the original cause of action, if anv. accrued. from where the prop- erty over which the original contention arose was situate, and from where all the witnesses reside, in order to present these facts to a foreign tribunal? We have been furnished with no principle of law or equity nor process of sound reasoning why this should be done and are of the opinion none can be presented. Besides, if O’Haire is allowed to continue his Iowa suit, and is defeated, under this same rule he could, if aided by persons with means, bring another action in some other state wherever perchance he might se- cure personal service upon Mr. Burns and thus com- pel him to again defend the same action with at least the piea and proof of res judicata an@so continue without any redress. The fallacy yf statement is itself an answer to it. This metho of equitable relief appears to have been approved by the great weight of authorities, and, for answer to the able argument of counsel] against. it,.we refer to the rea- sons assigned in support thereof in the following cases: Cole v. Cunningham, 133 U. S. 107, 10 Sup. Ct. 269, 33 L. Ed. 538; Cunningham v. Butler. 142 Mass. 47, 6 N. E. 782, 56 Am. Rep. 657; Butler v. Goreley, 146 U. S. 313, 13 Sup. Ct. 84, 36 L. Ed. 981; Pickett v. Ferguson et al., 45 Ark. 177. 55 Am. Rep. 545; Engel v. Scheuerman, 40 Ga. 206, 2 Am. Rep. 573: Dehon et al. v. Foster et al.. 4 Allen (Mass.} 545, Hawkins v_ Ireland, 64 Minn. 339, 67 N. W. 73, 58 Am. St. Rep. 534: Field v. Holbrook, 33 Abb. Prac. (N. Y.) 377; Kittle v. Kittle, 8 C. P. Rep. (N. Y.) 72; Vermont & Canada R. R. Co. v. Vermont Cen. R. R. Co. et al., 46 Vt. 792: Guge v. Riverside Trust Co.. (C. C.) 86 Fed. 984; Kempson v. Kempson, 63 N. J. Eq. 783. 92 Atl. 360, 625, 58 L. R. A. 484. 92 Am. St. Rep. 682. Haze & Quimby v. Lyndonville Nat. Bank et al. 70 Vt. 543, 41 Atl. 1046, 67 Am. St. Rep. 680; Ken- dall v. Coke Co.. 182 Pa. 1, 37 Atl. 823. 61 Am. St. Rep. 688: Hager v. Adams. 70-Iowa 746, 39 N. W. 36; Dinsmore v. Neresheimer, 32 Hun. 204. 22 Except for the matter of geographical distance be- tween Colorado and Iowa we do not believe that the case at bar can be distinguished from O’Haire v. Burns. We do not believe that distance was the determinative ele- ment in that case. As the Court says, res judicata could be pleaded but that weuld not prevent the bringing of still another suit and another and another. Here, it Toucey through Shay can maintain his suit at law in Missour!, why can he not maintain it in any other state. and again and again? If distance is the test, what is a reasonable distance? No case we know of holds that distance is the test. For a very similar case and the same ruling see Life Insurance Co. v. Fisher, 5 Tenn. Civ. App. 232 (1915) (Affirmed without opinion by Tenn. Sup. Ct., i915). The only difference between that case and O’Haire v. Burns. supra, is that in Life Insurance Co. v. Fisher the original action in Tennessee appears to have been at law to collect the proceeds of a policy as was the subsequent action filed by the same plaintiff in Mississippi. The Tennessee court enjoined Fisher from prosecuting the suit in Mis- sissippi after he had been defeated in Tennessee and upon his proceeding to do so punished him for a contempt. The appellate Court affirmed this action below. The rule is stated in 32 C. J. 117, as follows: Where a controversy between residents has been determined by the courts of the state, and, while one of the parties is temporarily in a sister state, an ac- tion is commenced against him there by the adverse party, involving matters previously determined, an injunction will be granted restraining the adverse party from prosecuting the suit in the sister state. The same essential principle is applied to different facts in State ex rel. N. Y.,C. & St. L. R. Co. v. Norton. 321 Mo. 764 (en banc), 55 S. W. 2d 272 (1932). A citizen of Indiana, the administratrix of her deceased husband's estate. a sued the railroad in Missouri under the Federal Emptovers’ Liability Act for damages for his death which occurred in Indiana. The railroad secured an injunction in Indiana against the prosecution of the Missouri suit notwithstand- ing which she pressed it to judgment. The railroad then moved the Indiana court to issue a citation for contempt against her which was done. Thereupon the Missouri circult, court enjoined the railroad from prosecuting the citation and the latter petitioned the Missouri Supreme Court for a writ of prohibition prohibiting the circuit court from entertaining jurisdiction of the injunction prc. ceeding against it. The court made absolute the pro. visional rule in prohibition theretofore issued saving. 1]. c. Zia: It is settled law that, in a proper case, a court of equity having jurisdiction of the person may en- join such person from prosecuting a suit in a fereign jurisdiction. By a “proper case’ we mean that the party seeking such an injunction must make a clear showing that it would be nequitable, unfair and un- just to permit the prosecution of the suit in a foreign jurisdiction (italics ours). And further said, ]. c. 274: The Indiana court had jurisdiction to enjoin Lena C. Meek, administratrix. from prosecuting her suit in the St. Louis circuit court, and to adjudge her in contempt for proceeding with the prosecution of that sult in violation of tne injunction. If, as we have held, the decree of the Indiana court enjcining the prosecution of the suit in the St. Louis circuit court was a valid decree, the railroad company, being an interested party. was entitled to institute any lawful proceeding looking to the enforcement of that decree * * * The contempt proceedings were instituted by the railroad company. When these proceedings were in- stituted, the jurisdiction of the court, as well as the right of the railroad company to prosecute the pro- ceedings to a termination, at once attached. It 1s familiar law that, where the jurisdiction of a court and the right of # party to prosecute the proceedings 24 therein have cnce attached, that right cannot be ar- rested or taken away by proceedings in another court. Stevens v. Central National Bank of Boston, 144 N. Y. 50, 39 N. E. 68. For this reason the St. Louis cir- cuit court did not have jurisdiction to enjoin the rail- road company from prosecuting the contempt. pro- ceedings in the Indiana court. It is significant, and a review of the cases will show. that it is typical of the attitude of the state appellate courts that the Missouri Supreme Court did not coun- tenance the attempt of the St. Louis Circuit Court to create a stalemate in the litigation by enjoining the railroad from prosecuting the contempt action. The exercise of the power of injunction in this field has not produced the discord or the conflict between courts or the stalemate in litigation which some members of this court may have been led to fear. The reason is that such injunctions is- sue only in exceptional cases and then only in accordance with well defined and well recognized pyinciples of law, so that as far as can be judged from reading the reports, the courts in which the parties have upon established principles been enjoined from proceeding, do not take the attitude that their powers have been interfered with by the enjoining courts. Federal courts nave been as careful in this respect as have the state courts. The cases iend no support to the theory that the established excep- tions to the application of Section 265 of the Judicial Code lead to conflict between the courts of the states and nation. The subsequent history of State ex rel. N. Y..C.&S! L. R. Co. v. Nortoni, supra, is interesting and sheds fur- ther light upon this subject. After the Missouri Supreme Court had prevented the lower court from interfering with the prosecution by the railroad of the contempt pro- eeedings against the plaintiff below whose name was Meek. her Missouri atturneys had one Maude J. Hamilton. an employee in their office, appointed ancillary adminis- 25 tratrix in Missouri of the estate of the deceased. Mrs. Meek, the Indiana administratrix, dismissed her Missouri action and Maude J. Hamilton as Missouri administratrix brought a new action against the railroad in Missouri. The railroad then brought an injunction suit against var- ious attorneys, a notary public and certain witnesses to prevent the taking of testimony in Indiana in the Hamil- ton suit. In New York, C. & St. L. R. Co. v. Perduie, $7 Ind. App. 517, 187 N. E. 349 (1933), the appellate Court of Indiana, en banc, reversed the order of the lower court which refused to issue the injunction and directed that it issue, Saving, }. c. 351: We are not unmindful of the rule that, on grounds of comity, the power of one state to interfere with a litigant who is in due course pursuing his rights and remedies given under the law, in the courts of another state, should be exercised sparingly. But we cannot lose sight of the fact in the instant case that the prosecution of the identical cause of ac- tion, when sought to be prosecuted by Lena C. Meek, the widow and sole beneficiary, in the state of Mis- souri, was enjoined in this state upon grounds of equity. If it was inequitable for Lena C. Meek, either individually or as such administratrix, to prosecute the said cause of action in Missouri, then upon what process of reasoning couJd it be maintained that it would not be inequitable for the said Hamilton to prosecute it in Missouri? It is true that the court entering the injunction against Meek had jurisdic- tion over her and that the trial court in the instant case has no jurisdiction over Hamilton. But it is not sought to make any order against Hamilton in the instant case. It is sought only to make an order against persons who are under the jurisdiction of the courts of our state, from assisting her in prosecuting her cause of action in Missouri. Her action is mani- festly an attempt to circumvent and annul the de- cision of a court of competent jurisdiction in our state. As heretofore pointed out, that judgment is amply and fully supported by the decisions of our courts of final jurisdiction. The persons sought to be 26 enjoined in the instant case are within the jurisdic- tion of our courts, and the attempt is clearly being made to use them to circumvent and annul and ren- der impotent the judgments and law of this state. They should be enjoined from so doing. Every court of general jurisdiction has the inherent power to protect its valid orders and judgments from being so annulled (Italics ours). The Court relied on its own prior cited decisions and on Michigan, etc., R. R. Co. v. Mix, 278 U.S. 492, 49 Sup. Ct. 207, 73 L. Ed. 470, and Denver, etc., R. Co. v. Bei Terte, 284 U. S. 284, 52 Sup. Ct. 152, 76 L. Ed. 295. it seems to us that the Perduie case is in harmony with Wonderly v. Lafayette County, supra, and its princi- ple is applicable here since the attempt is clearly being made to use the state court in the instant case ‘“‘to circuin- vent and annul and render impotent the judgments and law” of the Federal District Court. On the same point see also Sandage v. Studebaker Bros. Mfg. Co, 41 N. E. 380 (Indiana, 1895). In Kansas City Rys. Co. v. McCardle, 288 Mo. 354. 232 S. W. 464 (1921), the railroad had been harassed by the defendant McCardle, a lawyer who had made a prac- tice of bringing suits in the State of Kansas on behalf of certain installment credit companies against the railroad’s employees whe lived in Missouri and running garnish- ments against the railroad requiring the impounding of the employees’ wages, although both the creditor and the railroad were citizens of Missouri. The object of the suits was alleged to be to evade the Missouri Statute which provided, in effect, that only 10% of the wages of a mar- ried man or the head of a family could be garnisheed in Missouri. The railroad brought an injunction suit against McCardle in the case of one Campbell, an ernployee whose wages had been garnisheed in Kansas, but also attempted to enjoin the defendant generally from bringing any such suits involving any of its employees. A demurrer 27 to this petition was sustained below and on appeal was af- firmed by the Missouri Supreme Court on the ground that the railroad was not entitled to have an injunction gen- erally against the bringing of subsequent suits on behalf of other employees; but the court also held that it would have been entitled to an injunction had it confined its action to the particular pending case involving the em- plovee Campbell. Quite a number of the state court cases rely on Cole v. Cunningham, 133 U. S. 107 (1889). There proceedings in insolvency were begun in a Massachwioerts court against a man named Bird, under the local stat- ute. Prior therete a Massachusetts creditor of Bird, knowing that he had stopped payment and was insolvent and that he had monev due him from a New York firm, assigned its claim to a citizen of New York (without consideration) and the latter brought suit in New York against Bird by attaching the New York debt. The Massachusetts Court enjoined the Massachusetts creditor from proceeding with the New York suit through the New York assignee. The injunction was attacked on the ground that it violated the full faith and credit clause of the Constitution. This court affirmed the Massachu- setts decree and after reviewing the authorities at great length held that the injunction did not violate the full faith and credit clause of the Constitution. The court further found that the right of the equity courts of one state to prevent persons within their jurisdiction from the prosecution of suits in other states had been long es- tablished both here and under the principles of the Eng- lish Jaw. Steelman v. All Continent Corp., 301 U. S. 278 (1936), appears to us to be an application of essentially the same principle applied in Wonderly v. Lajayette County, supra, New York, C. & St. L. R. Co. v. Perduie, supra, and Cole v. Cunningham, supra, on which the Court in the Steel- 28 man case relies. While the action involved two Federal courts, the principle applied makes it pertinent here. There Steelman was trustee in bankruptcy in the District Court for the District of New Jersey of the property of Wilham Fox who had been adjudged a bankrupt. Fox had set up a family corporation called ‘All Continent Corporation” which the trustee claimed he had used to divert property which was properly part of the bankrupt estate. All Continent Corporation had an account and securities in excess of one half million dollars with Sparks & Co. a brokerage house in Philadelphia. All Continent brought suit against Sparks in the District Cour: of the Eastern District of Pennsylvania to establish its title to the account as against the claim that the account was really the property of Fox. The trustee in bankruptcy was made a party. Thereupon the trustee secured from the District Court in New Jersey an order staying the prosecution of the Pennsylvania suit. On appeal the 3rd Circuit held (86 F. 2d 913) that ‘the Pennsylvania court, having first acquired jurisdiction of the property and con- troversy, is entitied to exclusive jurisdiction, and the in- stitution of the suit in chancery was an attempt to oust the Pennsylvania court of the jurisdiction which it had previously and validly acquired,” adding that the Penn- sylvania court could restrain the trustee from litigating the issue elsewhere. This court reversed the 3rd Circuit and affirmed the decree of the district court. ruling, in effect, that the Bankruptcy Court under all the circum- stances was better able to administer full justice. It re- lied on Sec. 262 of the Judicial Code (28 U. S. C.. Sec. 377), giving the United States courts power to issue all writs not provided for by statute necessary for the exercise of their jurisdictions and agreeable to principles of law. Respondent’s argument was that in the Penn- sylvania suit the court had custody of the res, namety. the securities held by Sparks & Co. in Philadelphia and that its possession of that res should not be interfered 29 with. Answering this argument Mr. Justice Cardozo said, l, c. 290: The argument misconceives the grounds upon which the trustee looks to us for aid. The trustee does not challenge the jurisdiction of the federal court in Pennsylvania, if the word jurisdiction be taken in its strict and proper sense. Cf. Straton v. New, 283 U. S. 318, 321; Isaacs v. Hobbs Tie & Timber Co., 282 U.S. 734, 737, 738. He is not seeking a writ of prohibition directed to the court itself. He is not seeking an injunction to vindicate his exclusive con- tro] over a res in his possession, or in the possession, actual or constructive, of the court that appi-inted him. Isaacs v. Hobbs Tie & Timber Co., supra; Murphy v. John Hofman Co., 2)1 U. S. 562, 568, 969; Moran v. Sturges, 154 U. S. 256, 274. What he seeks is an injunction directed to a suitor, and not to any court,..upon the ground that the suitor is mis- using a jurisdiction which by hypothesis exists, and converting it by such misuse into an instrument of wrong. Gage v. Riverside Trust Co., 86 Fed. 983, 998, 999; Higgins v. California Prune & Apricot Grow- ers, 282 Fed. 550, 557; Cole v. Cunningham, 133 U. S. 107, 112, 117, 118. Suits as well as transfers may be the protective coverings of fraud. Shapiro v. Wilgus, 287 U.-S. 348, 355. We are unable to yieid assent to the statement of the co.rt below that ‘‘the restraint of a proper party is legally tantamount to the re- straint of the court itself.” Th: reality of the dis- tinction has illustration in a host of cases. 2 Story, Eq. Jur., 14th Ed., Sec. 1195; 5 Pomeroy, Eq. Jur., Sec. 2091; Cole v. Cunningham, supra; Madisonvillz Traction Co. v. Mining Co., 196 LU. S. 239, 245; Kess- ler v. Eldred, 206 U. S. 285: Rickey Land & Cattle Co. v. Miller & Lux, 218 U. S. 258: Toledo Scale Co. v. Computing Scale Co.. 261 U. S. 399, 426; Smith v. Apple, 264 U. S. 274, 279. Cf. Judicial Code, Sec, 265; 28 U. S. C.. Sec. 379; Brown .v. Pacific Mutual Life Ins. Co., 62 F. 2d 711, 713; Chicago Title & Trust Co. v. Fox Theatres Corp., 69 F. 2d 60, 61, 62. Applying Steelman v. All Continent Corp. here, the ground of the injunction in the present case is not 30 only that petitioner through his assignee is seeking to relitigate issues already decided by a court of equity but that respondent is misusing the jurisdiction of the Mis- souri court “and converting it by such misuse into an in- strument of wrong.”’ It cannot be said that this is an at- tempt to control the Missouri court and thus will lead to a conflict of courts since Justice Cardozo particularly points out that the restraint of the party is not legally tanta- mount to a restraint upon the court. This Court said the same thing in Marshall v. Holmes, 141 U. S. 589 (1891), 1. c. 599: While it (the federal court) cannot require the state court itself to set aside or vacate the judg- ments in question, it may, as between the parties be- fore it, if the facts justify such relief, adjudge that Mayer shall not enjoy the inequitable advantage ob- tained by his judgments.