Rosenthal v. Coates

Statement by Mr. Justice BREWER:

[Statement of Case from pages 143-144 intentionally omitted]

On August 3, 1878, the Mastin Bank of Kansas City failed, and also executed a deed of general assignment to Kersey Coates for the benefit of all creditors. Coates accepted and administered the trust. At the time of the failure the Mastin Bank had on deposit in the Metropolitan Bank of New York a large sum,-$50,000 and over,-that bank being its New York correspondent. It had, prior to August 3d, and in the regular course of business, drawn and sold drafts on the Metropolitan Bank to different parties. One of the parties holding such drafts was Rosenthal, the appellant. He brought suit in New York city to secure payment from the Metropolitan Bank out of the funds in its hands, but the decision of Mr. Justice Blatchford, then judge of the circuit court of the United States for the southern district of New York, into which court the case had been removed, was adverse to his right to appropriate any portion of that fund to the payment of his draft. Rosenthal v. Bank, 17 Blatchf. 318. It would seem from the opinion that the case proceeded no further than to sustain a demurrer to the bill, with leave to the plaintiff to move on notice, etc., for an amendment. What orders, if any, were entered thereafter in that case are not disclosed by this record.

On June 23, 1881, Coates, as assignee of the Mastin Bank, filed in the circuit court of Jackson county, Mo., a petition, in which he set forth the failure of the bank; the assignment; his acceptance of the trust; the amount of the deposit in the Metropolitan Bank to the credit of the Mastin Bank at the time of the failure, which deposit had subsequently passed into his hands; the fact that various drafts had been drawn by the latter on the former bank prior to the failure, which drafts were outstanding and unpaid; and that the holders of these drafts claimed the right to have that fund appropriated specially to the payment of their drafts. The holders of the drafts were made parties defendant, and the prayer was, substantially, that their rights in this fund be determined; to which petition Rosenthal, among other defendants, answered. He admitted the charge made in the petition that a decree adverse to his claim of payment out of that fund had been rendered in the circuit court of the United States for the southern district of New York, but, nevertheless, claimed the benefit of a different line of decisions obtaining at that time in the trial courts of Missouri. This case came on regularly for hearing in the state trial court, and a decree was there entered directing Coates, the assignee, to pay all the other holders of drafts in full out of that fund, it being conceded to be sufficient in amount, but denying Rosenthal any right therein, by reason of the prior adjudication in New York city. From such decree Coates and Rosenthal both appealed; Coates, however, gave no supersedeas bond. When the case reached the supreme court, the question involved having been recently theretofore presented in another case, and decided adversely to the right of the holders of these drafts to payment out of such fund, that court simply entered an order reversing the decree of the circuit court, and remanding the case for further proceedings. No special notice seems to have been taken of the fact that the decree of the trial court was adverse to Rosenthal, and, in accordance with the conclusions of the supreme court, should have been affirmed. When the case returned to the circuit court, and before it was reached for further hearing, Coates had paid all the other holders of drafts. Thereupon Rosenthal filed a petition for removal to the circuit court of the United States for the western district of Missouri, he being a citizen of New York and Coates a citizen of Missouri. This petition for removal was filed on February 10, 1885. The record having been transmitted to the federal court, a motion was made to remand, and, on October 25, 1886, it was sustained, and from this order remanding the case to the state court Rosenthal has appealed to this court.

O. H. Dean and Geo. Hoadly, for appellant.

T. A. Frank Jones, for assignee of Mastin Bank.

Mr. Justice BREWER, after stating the facts in the foregoing language, delivered the opinion of the court.