The opinion of the court was delivered by: Igoe, District Judge.
A decree was entered in this cause on December 14, 1951,
approving and incorporating a family settlement and a
conveyance and liquidation trust agreement, whereby this court
took over the supervision and direction of the administration
and liquidation and distribution of the testamentary trust
estate of Otto Young, deceased; taking of the trustees'
accounts which had been previously ordered for the period
after March 26, 1916, was continued by agreement until the
further order of court; and full and complete jurisdiction of
the trust and over its administration, liquidation and
distribution was expressly reserved. The complaint initiating
this action, seeking a fiduciary accounting and related relief
operating directly upon the trust estate, required that the
court or its officer have control or constructive possession
of such corpus and constituted a suit in rem or quasi in rem.
The original decree herein and subsequent adjudications,
particularly the settlement decree of December 14, 1951, have
drawn the trust property into the custody of this court and it
is now custodia legis in this proceeding, in effect is
impounded herein. For a fuller discussion of this litigation
and its background, see: De Korwin v. First Nat. Bank of
Chicago, 7 Cir., 156 F.2d 858, certiorari denied 329 U.S. 795,
67 S.Ct. 481, 91 L.Ed. 680; Id., D.C., 84 F. Supp. 918; Id., 7
Cir., 179 F.2d 347, certiorari denied Pratt v. De Korwin,
339 U.S. 982, 70 S.Ct. 1025, 94 L.Ed. 1386; De Korwin v. First
Nat. Bank of Chicago, D.C., 94 F. Supp. 577.
In this setting The First National Bank of Chicago as
Trustee under the Last Will of Otto Young, deceased, filed its
petition, on October 11, 1954, for the instructions of this
court relative to its administration of the trust property
occupied by the department store of Carson, Pirie, Scott and
Company, at State and Madison Streets in Chicago.
Specifically, the trustee sought to be instructed whether it
had power to sell the Carson Pirie property or lease it for a
long term, and if so when and how such right ought to be
exercised. By decree entered February 4, 1955, the will of
Otto Young was construed as authorizing a sale of the Carson
Pirie property with approval by a court of competent
jurisdiction, and the trustee was empowered to make such
disposition immediately. On July 20, 1955, sale of the Carson
Pirie property to its occupants for $7,500,000 was approved
and confirmed. The instant ancillary proceeding is an
outgrowth of the decrees of construction and sale.
Following authorization and direction to sell the Carson
Pirie property, the trustee called upon Chicago Title and
Trust Company for an opinion of title, and the pendency of a
complaint for partition of the Otto Young trust assets filed
in the Superior Court of Cook County in August of 1949 on
behalf of Marie Louise Tonella, plaintiff, by Samuel A.
Rinella as her attorney, was noted as an objection to the
trustee's title. To remove that cloud upon its title, the
trustee upon leave filed its instant petition in this cause
for an injunction restraining Mrs. Tonella and attorney
Rinella from further prosecution of the Superior Court
partition proceedings. Mrs. Tonella, a grandchild of Otto
Young and a beneficiary under his trust, has been a party to
this proceeding from its commencement in 1943. Mr. Rinella,
individually, has been brought before the court, pro hac vice,
by original process.
The respondent Tonella does not oppose the injunction for
reasons which will become obvious. Respondent Rinella has
answered the petition by raising questions of law only, thus
admitting all facts averred by the trustee. With the
controversy in this posture, the trustee now moves for
judgment on the pleadings. Briefs have been filed in support
of and in opposition to the trustee's motion, and counsel for
the plaintiff has submitted supporting suggestions.
On this branch of the case the defenses argued by respondent
Rinella may be summarized as lack of jurisdiction over the
trust res and to enjoin the State court suit. His claims of
res judicata, estoppel and laches are rested upon an order of
reinstatement procured by Rinella in the Superior Court suit.
Lastly, Rinella questions the right of this court to approve
any sale of the Carson Pirie property.
Rinella's first point in support of his attack upon
jurisdiction over the trust res appears based on a distinction
between the interest of the trustee and beneficiaries in the
trust on one hand and the trust property itself on the other.
In this respect he asserts "a misapprehension on the part of
the trustee of what comprises a trust res". He insists that
"the res * * * was the congeries of interests existing between
the trustee and the various beneficiaries, and not the real
estate comprising the physical
assets of the trust." Under this theory he concludes: "It is
accordingly clear that the res to which the jurisdiction of
the District Court attached * * * is an entity entirely
different and apart from the real property, or any parcel
thereof, to which the trustee holds legal title." Authority
cited does not sustain the proposition that there are two
different trust res in the same trust property, i. e., a res
comprised of the trust interests, and a res made up of the
trust property. Indeed, the textwriter quoted, Professor
Bogert, supporting an opposite conclusion that the two
elements, interest and property, are combined in every trust
res, states: "Every express trust, therefore, necessarily
involves a property interest or interests and a thing or
things in which those property interests exist." There is no
substance to the contention that the trust res over which this
court has jurisdiction is different from the trust res of the
Superior Court complaint.
The main action here and the Superior Court suit are
similar. The subject matter of each is the Otto Young trust
estate, and the parties in both courts are the trustee and
beneficiaries. Each asks relief requiring control of the trust
fund and is a proceeding in rem. The jurisdiction of the
District Court and that of the Superior Court are coordinate or
concurrent. As has been seen, the trust res long since was
drawn into the custody of this court while in the Superior
Court suit, instituted some six years later, steps have not
been taken as yet toward judicial possession of the trust
properties. In these circumstances, jurisdiction over the trust
res is exclusively in this court. The controlling principle was
thus stated in Princess Lida of Thurn and Taxis v. Thompson,
305 U.S. 456, 466, 59 S.Ct. 275, 280, 83 L.Ed. 285: "If the two
suits are in rem, or quasi in rem, so that the court, or its
officer, has possession or must have control of the property
which is the subject of the litigation in order to proceed with
the cause and grant the relief sought the jurisdiction of the
one court must yield to that of the other." In Harkin v.
Brundage, 276 U.S. 36, at page 43, 48 S.Ct. 268, at page 271,
72 L.Ed. 457, the Court said: "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". In Kline v.
Burke Const. Co., 260 U.S. 226, at page 231, 43 S.Ct. 79, at
page 82, 67 L.Ed. 226, the Court said: "`It is settled that,
when a state court and a court of the United States may each
take jurisdiction of a matter, the tribunal whose jurisdiction
first attaches holds it, to the exclusion of the other, until
its duty is fully performed, and the jurisdiction involved is
exhausted.'" To the same effect, see: Penn General Casualty Co.
v. Commonwealth of Pennsylvania, 294 U.S. 189, 195, 55 S.Ct.
386, 79 L.Ed. 850. In Farmers' Loan & Trust Co. v. Lake Street
Elevated R. Co., 177 U.S. 51, at page 61, 20 S.Ct. 564, at page
568, 44 L.Ed. 667, the Court said: "The possession of the res
vests the court which has first acquired jurisdiction with the
power to hear and determine all controversies relating thereto,
and for the time being disables other courts of coordinate
jurisdiction from exercising a like power. * * * The rule has
been declared to be of especial importance in its application
to Federal and state courts."
The trustee's petition for an injunction properly invokes
section 2283 of 28 U.S.C.A., which permits a court of the
United States to grant an injunction for the stay of
proceedings in a State court where necessary in aid of its
jurisdiction, or to protect or effectuate its judgments. In re
Newman, 2 Cir., 17 F.2d 584, 585; Barnett v. Mayes, 10 Cir.,
43 F.2d 521, 526; City of Orangeburg v. Southern R. Co., 4
Cir., 134 F.2d 890, 892; Brown v. Wright, 4 Cir.,
137 F.2d 484, 488.
The order of reinstatement procured by respondent Rinella in
the Superior Court partition suit, upon which his claims of
res judicata, estoppel
and laches are based, is void upon its face and is to be
disregarded. Apart from the showing that the Superior Court
complaint was filed by the respondent Rinella in the name of
the respondent Marie Louise Tonella without her "desire or
intention to institute that suit" and that its commencement
was without her "agreement or consent" and was ordered by her
to be dismissed shortly after its filing, and putting to one
side the clear Illinois rule that properties held in an active
trust are not subject to partition along with other
invalidities, the order reinstating the partition complaint in
the Superior Court entered April 16, 1951, upon application of
the respondent Rinella alone, is plainly void on its face in
at least two respects. After Rinella had refused to effect a
dismissal of the partition suit, Mrs. Tonella appeared before
the Superior Court on February 6, 1951, with other counsel and
obtained a voluntary dismissal with prejudice of her
complaint. On March 19, 1951, more than thirty days after the
final decree of dismissal, Rinella presented his own petition
to vacate the judgment on the ground that plaintiff, Mrs.
Tonella, his former client, was indebted to him for attorney
fees and advancements. The Illinois Supreme Court in Illinois
Nat. Bank of Springfield v. Gwinn, 390 Ill. 345, at page 352,
61 N.E.2d 249, at page 253, 159 A.L.R. 468, said: "A court of
equity has no power to modify, set aside or vacate a final
decree after the expiration of thirty days from the date of
its rendition, Ill.Rev.Stat., ch. 77, pars. 83 and 84". To the
same effect, see: Barnard v. Michael, 392 Ill. 130, 135,
63 N.E.2d 858. An equally settled Illinois doctrine is that where
a plaintiff voluntarily dismisses her suit the court lacks
jurisdiction to reinstate the action even when applied for the
very next day unless the order of dismissal expressly grants
leave to make such an application. The Superior Court judgment
not only omitted leave to move for its reinstatement but
expressly precluded such a right by specifically directing
that the dismissal be "with prejudice". In People ex rel.
Waite v. Bristow, 391 Ill. 101, at page 108, 62 N.E.2d 545, at
page 549, the Court said: "Where the plaintiff voluntarily
dismisses his suit the court has no power to set aside the
order of dismissal and reinstate the cause, unless at the time
the nonsuit is taken, leave is given to move to set aside the
order of dismissal. Bettenhausen v. Guenther, 388 Ill. 487,
58 N.E.2d 550; Davis v. Robinson, 374 Ill. 553, 30 N.E.2d 52;
Weisguth v. Supreme Tribe of Ben Hur, 272 Ill. 541,
112 N.E. 350; Chicago Title & Trust Co. v. Tilton, 256 Ill. 97,
99 N.E. 897."
As an even "more cogent objection to this court's granting
the relief prayed for in the petition", the respondent Rinella
concludes: "This court was and is without jurisdiction or
authority to order or to consent to the sale of the Carson
Pirie property at all. The Last Will and Testament of Otto
Young, * * * prohibits as clearly and as explicitly as the
English language can be made to do the sale of the Carson
Pirie tract by the trustee at any time during the continuation
of the trust." It need not be recalled that this construction
question was exhaustively inquired into and ably briefed and
argued on the merits in this cause with contrary results. It
is enough to point out that Rinella, without an interest in
the subject matter, lacks standing to challenge the
construction which has been finally placed upon the last will
and testament of Otto Young, deceased, and to urge a different
intention on the part of the testator.
The prayer of respondent Rinella that this court pass upon
and determine his "rights * * * to receive from the respondent
Marie Louise Tonella the monies due him for fees and monies
expended by him for use and on the behalf of the said
respondent Marie Louise Tonella" is beyond the jurisdiction in
this cause, at least until his demand may be reduced to
judgment or otherwise liquidated.
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