Under the rule that there is a necessary difference between the right to search without a warrant, a building for which a warrant may readily be obtained and a boat or vehicle which may quickly be moved out of the jurisdiction, entry and search without a warrant of rooms in a building, whether used as a dwelling or for other purposes, held unlawful.

Gilbert, Circuit Judge, dissenting.

In Error to the District Court of the United States for the Southern Division of the Northern District of California; John S. Partridge, Judge.

Criminal prosecution by the United States against Frank J. Schroeder. Judgment of conviction, and defendant brings erReversed and remanded.

ror.

Kenneth M. Green and Kenneth C. Gil

manent structure, such as a dwelling house or the basement underneath.

Reversed and remanded.

GILBERT, Circuit Judge (dissenting). A prohibition officer was led to inspect the defendant's house by the strong and penetrating odors of boiling mash and fermentation, which he said were unmistakable and which came directly from the house. The house was situated on a corner. Extending from it was a small room, "just like a little ell." Into that ell the officer entered through a door which was closed, but not locked. On entering it he found that it was a mash room. Through an open door he saw into an adjacent larger room, which was used as a still room, and saw the defendant in the active operation of two 80-gallon stills. The room contained 1,200 gallons of mash, 100 gallons of jackass brandy, 12 sacks of sugar, 20 barrels of yeast, and other material used in making intoxicating liquor. Beyond the still room, and connected therewith by a door which was closed, was a garage. The garage was not entered. There was no connection

tiff in error.

Geo. J. Hatfield, U. S. Atty., and T. J. Sheridan, Asst. U. S. Atty., both of San Francisco, Cal., for the United States.

Before GILBERT, HUNT, and RUDKIN, Circuit Judges.

RUDKIN, Circuit Judge. The judgment in this case cannot be sustained without overruling Temperani v. United States (C. C. A.) 299 F. 365, and Bell v. United States (C. C. A.) 9 F.(2d) 820. Adhering as we do to the views there expressed, the judgment in this case must be reversed.

To uphold an entry and search such as was here made is to entirely ignore "a necessary difference between a search of a store, dwelling house, or other structure in respect of which a proper official warrant readily may be obtained and a search of a ship, motorboat, wagon, or automobile for contraband goods, where it is not practicable to secure a warrant, because the vehicle can be quickly moved out of the locality or jurisdiction in which the warrant must be sought." Carroll v. United States, 267 U. S. 132, 153, 45 S. Ct. 280, 285 (69 L. Ed. 543, 39 A. L. R. 790).

This judgment cannot be upheld, if in law there is a recognized difference between the right to search a moving vehicle, such as an automobile, and the right to search a per

with the upper portion of the house, nor were either of those rooms used for any household purpose. They were distinct and separate from the dwelling, as much so as if they had been contained in a separate building. In brief, the two rooms constituted a large distillery beneath a dwelling house, separate therefrom and used as exclusively for business purposes as is any shop, factory, or store occupying the ground floor of a building beneath a second story occupied for household purposes.

The question of the legality of the search and seizure in such a case should be decided upon the principles announced by this court in Forni v. United States, 3 F. (2d) 354, cited with approval in Steele v. United States, 267 U. S. 498, 45 S. Ct. 414, 69 L Ed. 757, where this court held that a garage beneath a dwelling house, used for the storage of a large quantity of contraband liquor, was used for a business purpose; also the case of Dowling v. Collins, 10 F.(2d) 62, where it was held that, irrespective of the validity of the search warrant, the search and seizure were not unreasonable, in that the portion of the building searched was not that which was occupied as a private dwelling, but was the basement, which was used as an office for the transaction of the business of two distillery warehouses, in which large quantities of liquor were stored; also United States v. Mitchell (D. C.) 12 F. (2d) 88, where the defendant had a res

ed States District Court temporarily enjoining, at the suit of Charles G. Revelle, the receiver of the property of the Interstate Casualty Company, appointed by that court, the Chillicothe Furniture Company, a corporation, from farther proceeding in a suit in equity it had brought in the circuit court of Livingston county, Mo., to avoid and annul its promissory note for $50,000 and a deed of trust, hereafter called the mortgage, securing the note made on August 1, 1923, which were the property of the Interstate Casualty Company, held by Revelle as its receiver subject to a pledge to secure certain liabilities of the American General Indemnity Corporation, the payee in the note and mortgage.

The mortgaged property securing the payment of the note was eight acres of land in the city of Chillicothe, Mo., and the Chillicothe Furniture Factory building, equipment, yards, and trackage on the Wabash Railway. The mortgage was filed for record on November 17, 1923, and duly recorded.

The question in this case is, whether the United States District Judge below violated any established principle or rule of equity or committed an abuse of his discretion in enjoining temporarily until the further order of his court the Furniture Company from proceeding with the prosecution of its suit in the state court to avoid and annul its $50,000 note and mortgage, for the principles, rules, and practice in equity imposed the duty upon the district judge and intrusted to his sound judicial discretion, and not to the discretion of this court or any of its members, the duty to decide whether or not the Furniture Company ought to be temporarily delayed in prosecuting in the state court its suit to destroy its note and mortgage.

The payee in the note and mortgage, the Indemnity Corporation, was required by the statutes of Missouri as a condition of continuing its business in that state to deposit in cash or securities $200,000 as security for the payment of certain of its liabilities, and to keep them on deposit "in a strong iron box, which shall require two distinct and different keys to unlock the same, one key to be kept by the superintendent (the state superintendent of insurance) and the other by the company; and the box shall not be opened except in the presence of the superintendent or deputy, and said president, vice president, or authorized agent of the company." The statutes also provided that so long as the company so depositing should continue solvent the superintendent should "permit such company to collect and receive the interest or dividends on its securities so deposited and transferred,

and from time to time to withdraw any such securities on depositing other securities in the stead of those to be withdrawn, such new securities to be of the same value and of the kinds required by law in the first instance." Revised Statutes of Missouri 1919, § 6341.

At some time prior to January, 1924, the Indemnity Corporation and the superintendent of insurance had deposited in a box in the Telegraphers' National Bank securities of that corporation of the value of $208,000, one of which was this note and mortgage made by the Furniture Company. To that box the superintendent took and held one key and the Indemnity Corporation took and held the other key. Neither key would open the box without the use of the other, and the note and mortgage are still in that box.

In January, 1924, the Indemnity Corporation sold and assigned the $50,000 note and mortgage, subject to the pledge to secure certain of its liabilities evidenced by the keys and the box and its contents, to the Interstate Casualty Company, a corporation, and transferred all its rights and interest therein and delivered the key to the box to that company.

On August 14, 1924, in a suit in equity in the court below by a stockholder of the Casualty Company against the Casualty Company to collect, take, sell, and apply the proceeds of all its property to the payment of its creditors and stockholders, the court below appointed the plaintiff in this suit receiver of all the property of the Casualty Company of every nature and of all its rights and interests, and directed this receiver to proceed to collect, convert into money, and to distribute the proceeds thereof to the creditors and stockholders of the Casualty Company. The plaintiff immediately qualified as receiver, the Casualty Company delivered to him all its property, including its key to the deposit box in which the Furniture Company note and mortgage were deposited, and he has been since August 14, 1924, and is proceeding in the discharge of his duties as such receiver. On October 2, 1924, about 40 days after this suit was brought and the receiver was appointed, the Furniture Company brought a suit in the state circuit court against the Indemnity Corporation, the Casualty Company, the state superintendent of insurance, and others to set aside and annul its $50,000 note and mortgage on the ground that its president and secretary who signed the same were never authorized by its directors or stockholders to make this note and mortgage. On October 30, 1924, the state court temporarily enjoined the defendants, of which the receiver of the Casualty Company was not one, in that suit

railroad company covered by the mortgage of the Farmers' Loan & Trust Company and said, page 61 (20 S. Ct. 568): "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 co-ordinate jurisdiction from exercising a like power. This rule is essential to the orderly administration of justice, and to prevent unseemly conflicts between courts whose jurisdiction embraces the same subjects and persons."

A few moments' thoughtful consideration leaves no doubt of the indispensability of this rule. If any or every claimant of the invalidity of or of an adverse title to or interest in any note, mortgage, real estate, or other property of a defendant corporation in a suit brought to administer and distribute the proceeds of that property to its creditors could successfully invoke and use the jurisdiction of some other court than that in which the suit for administration and distribution was first brought, the result would be delay, confusion, and, ultimately, the necessary abandonment of such suits for the administration and distribution of the property of insolvent debtors. The Supreme Court further said in the Farmers' Loan & Trust Co. v. Lake Street Elevated R. Co. Case: "Nor is this rule restricted in its application to cases where property has been actually seized under judicial process before a second suit is instituted in another court, but it often applies as well where suits are brought to enforce liens against specific property, to marshal assets, administer trusts or liquidate insolvent estates, and in suits of a similar nature where, in the progress of the litigation, the court may be compelled to assume the possession and control of the property to be affected. The rule has been declared to be of especial importance in its application to federal and state courts. Peck v. Jenness, 7 How. 612 [12 L. Ed. 841]; Freeman v. Howe, 24 How. 450 [16 L. Ed. 749]; Moran v. Sturges, 154 U. S. 256 [14 S. Ct. 1019, 38 L. Ed. 981]; Central Bank v. Stevens, 169 U. S. 432 [18 S. Ct. 403, 42 L. Ed. 807]; Harkrader v. Wadley, 172 U. S. 148 [19 S. Ct. 119, 43 L. Ed. 399]."

In Mound City Co. v. Castleman, 187 F. 921, 924, 925, 110 C. C. A. 55, the suit in the state court was commenced by the filing of the complaint on March 20, 1907, but the summons was not issued until March 25, 1907, and it was not served until May 13, 1907, while the conflicting suit in the federal court was commenced on May 2, 1907. But this court held that the state court had acquired

exclusive jurisdiction of the property and that the subsequent attempt of the federal court to acquire such jurisdiction was futile.

In McKinney v. Landon, 209 F. 300, 306, 126 C. C. A. 226, 232, speaking of the acquisition of jurisdiction, this court said: "The most difficulty arises in determining when possession of property has been taken, when jurisdiction has attached to the exclusion or postponement of that of other courts. It is settled, however, that actual seizure or possession is not essential, but that jurisdiction may be acquired by acts which, according to established procedure, stand for dominion and in effect subject the property to judicial control. It may be by the mere commencement of an action the object, or one of the objects, of which is to control, affect, or direct its disposition. See Mound City Co. v. Castleman, 110 C. C. A. 55, 187 F. 921, and the cases cited. The principle often applies 'where suits are brought to enforce liens against specific property, to marshal assets, administer trusts, or liquidate insolvent estates, and in suits of a similar nature where, in the progress of the litigation, the court may be compelled to assume the possession and control of the property to be affected.'"

The suit in which the federal court made Revelle the receiver of the property of the Casualty Company, including its title and the joint possession of the $50,000 note and mortgage made by the Furniture Company, was and is a suit to marshal assets, to administer a trust, and to liquidate an insolvent estate in which the court below in the discharge of its judicial duties may be compelled in order to protect the rights and interests of the creditors and stockholders of the Casualty Company to assume the control and possession of the $50,000 note and mortgage and to sell or otherwise dispose of them and apply their proceeds according to the rules of law and equity in such cases, and this case falls directly under and is governed by the rules and authorities to which attention has now been called. This case falls under the established rule of law that: "The court which first acquires the lawful jurisdiction of specific property by the seizure thereof, or by the due commencement of a suit from which it appears that it is or will become necessary to a determination of the controversy involved, or to the enforcement of its judgment or decree therein, for that court to seize, to charge with a lien or trust, to sell or exercise like dominion over it, thereby withdraws that property from the jurisdiction of every other court, so far as necessary to accomplish the purpose of the suit, and entitles that court to retain the con