The opinion of the court was delivered by: SCHOONMAKER
This suit was originally filed in equity on March 28, 1938. The plaintiff, as trustee in bankruptcy of Colonial Iron Company, was seeking to set aside an agreement of April 6, 1937, whereby the bankrupt corporation had pledged and transferred to defendant a quantity of pig iron located in Somerset County in this District, as a pledge for $125,000 advanced by defendant to the bankrupt, on the ground that the pledge-agreement of April 6, 1937, was fraudulent and void as against the creditors of the bankrupt, the agreement not having been recorded in the Prothonotary's Office of Bedford County, Pennsylvania, where said pig iron was located.
On May 2, 1938, the defendant, by its attorneys, appeared in the case and moved to transfer the cause to the law side of the court, because the plaintiff had a plain and adequate remedy at law, asking in its motion that in case the action was transferred to the law side of the court, the defendant be granted leave to object in its answer or other defense, to the jurisdiction of this court to hear and determine the same.
The motion to transfer the case to the law side of the court was heard, but in the meantime the new Rules of Civil Procedure, 28 U.S.C.A. following section 723c, had intervened; and in an opinion filed October 27, 1938, 28 F.Supp. 645, this court held that while under the old practice the cause of action was one for the law side of the court and not in equity, yet, under the new rules, such transfer was not necessary and the case would proceed as a civil action under the new rules. Accordingly, this court made an order of November 4, 1938, allowing defendant twenty days to answer the complaint.
On November 23, 1938, the defendant filed a motion to dismiss for lack of venue in this District. After hearing the argument of counsel, this court then filed an opinion on February 21, 1939, holding that as this was a local action for the recovery of pig iron, or its value, the venue was properly in this District. The defendant then moved for a reargument of its motion to dismiss, and leave to do so was granted. The plaintiff contends that, as the defendant cannot now have this case transferred to the law side of this court, his reservation of the right to object to the venue in this suit, if it reached the law side of the court, is ineffective. There is merit in this contention. By its very motion to transfer to the law side of the court, the defendant submitted itself to the jurisdiction of this court, and admitted the jurisdiction at least to make the transfer. Having made that motion it could not hold in reservation any right to object to the venue of the suit. Certainly not, if we apply to this suit the new Federal Rules of Civil Procedure, in which we now have but one action where the plaintiff may have such relief as it is entitled to in this case, either legal or equitable.
There is every reason to hold jurisdiction in the instant case. The pig iron in controversy is located in this District. The agent of the defendant in charge of the property in question was served in this District, and there has been no motion to set aside such service. This is a bankruptcy case involving property in this District, and, therefore, while a plenary action is necessary, this court still has jurisdiction of the res.
While the plaintiff in this case might have a legal remedy, we are not so sure that we were right in our first opinion in stating that the remedy at law precluded plaintiff from having equitable relief. This is certainly a case where equitable relief might be afforded plaintiff in setting aside the transfer of the pig iron by the bankrupt to the defendant, if that transfer is found to be fraudulent, as alleged in the complaint.
A remedy at law does not exclude one in equity, unless it is equally prompt and certain, and in other ways efficient, and where equity can give relief, plaintiff ought not to be compelled to speculate on the chance of obtaining relief at law. See American Life Insurance Co. v. Stewart, 300 U.S. 203, 204, 214, 57 S. Ct. 377, 81 L.Ed 605, 111 A.L.R. 1268.
However, any discussion in the instant case as to whether he should be on the law side or the equity side of the court, would seem to be idle. Under Rule 2 of the Federal Rules of Civil Procedure, 28 U.S.C.A. following section 723c, there is but one form of action known as a "civil action." Substantive rules of law remain unchanged, and there is now but one procedure for their enforcement. The Federal statutes relating to actions brought on the wrong side of the court and to equitable defenses and equitable relief (See 397 and 398 of 28 U.S.C.A.), are superseded, as there is now only a "civil action" in which all relief must be obtained that could formerly have been secured at "law" or in "equity." If a party wants a jury trial and demands it pursuant to Rule 38, he must be accorded that right, if he was entitled to it at common law, or if it has been granted to him by Federal statute.
Our conclusion is that the defendant cannot set up the distinction between an action at law or in equity to defeat the jurisdiction of this court; and that we will now proceed with the case to determine what, if any, relief, the plaintiff is entitled to. With that in view, we will rescind and vacate our order of November 12, 1938, insofar as it finds that the bill of complaint presents no ground for equitable relief, and deny the defendant's motion to dismiss the action.
Defendant will be allowed twenty days from the date of the order to answer the complaint.
An order may be submitted ...