Case ID: ala_125/html/0436-01.html
Source: Caselaw Access Project
Author: {"author": "HARALSON, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Turrentine v. Blackwood.
    
      Action of Detinue.
    
    1. Detinue; can not be maintained against trustee in bankruptcy. Where a Federal court has acquired jurisdiction of the estate of a bankrupt, and the trustee in bankruptcy, duly and regularly appointed, in obedience to the orders of the court appointing him takes into his possession the property constituting the estate of the bankrupt and holds it subject to the control of the court, a third party, claiming to own a part of such property, can not maintain an action of detinue in a State court against the trustee in bankruptcy to recover a portion of said property; and in an action of detinue against such trustee, a plea in abatement averring such facts presents a complete answer to the jurisdiction of the State court and is not demurrable.
    2. Jurisdiction of estate in bankruptcy; effect of concurrent jurisdiction. — Where State and Federal courts have concurrent jurisdiction over the property of a bankrupt the court which first exercises its jurisdiction over such property has the right to retain it to the exclusion of the other; and where an estate in bankruptcy is being administered by a Federal court, no State court can interfere and take from the Federal court possession of any part of such estate.
    3. Action of detinue against trustee in bankruptcy; admissibility of evidence. — In an action of detinue brought against one who has taken possession of the property sued for, as a trustee in bankruptcy, under the orders of the Federal court, where there is a plea of abatement to -the jurisdiction of the State court, averring that the property was held by thé defendant as trustee in bankrupt cy, it is permissible for the defendant in his examination as a witness to testify that he acquired possession of the goods sued for from the sheriff of the county where the suit was brought, by presenting to him the order of the district court directing that he, the defendant, should take possession of the estate of the bankrupt, and that as such trustee, he held the property at the time of the institution of the suit.
    4. Same; same. — In such a case, the fact that at the time the defendant, as trustee in bankruptcy, took possession of the property sued for, the plaintiff notified him that said property did not belong to the bankrupt, but was the property of the plaintiff, and that it was his property at the time the bankruptcy court ordered the trustee to take charge thereof, is irrelevant to any of the issues involved, and evidence of such fact is inadmissible.
    Appeal from the City Court of Gadsden.
    Tried before the Hon. John H. Bisque.
    This was an action of detinue brought by the appellant, B. C. Turrentine, against the appellee, J. E. Black-wood, to recover one hundred and eight bags of flour. The suit was originally commenced in a justice of the peace court. From a judgment by the justice of the peace in favor of the defendant, the plaintiff appealed to the city court of Gadsden. In this court the defendant filed the following plea in abatement: “Defendant says that on the 26th of October, 1898, one J. Walter Ware filed his petition in the district court of the United Stales for tlie Southern Division of the Northern District of Alabama, praying to be adjudged by said court a bankrupt within the purview and meaning of the bankruptcy act passed by the Congress of the United States on J uly 1st, 1898. That thereafter, to-wit, on the -day of October, 1898, he was duly adjudged such bankrupt -under said bankrupt law, and the first meeting of his creditors was held on November 11th, 1898, at which time defendant was duly elected the trustee in bankruptcy of the said bankrupt by the creditors of said bankrupt, as provided by law; that his election was duly confirmed by the court and that he duly qualified for said office, as required by law. That under the order of the said bankrupt court of the United States for the Southern Division of the Northern District of Alabama, defendant as such trustee went into possession of a certain stock of general merchandise set forth in said petition in bankruptcy, as the property of said bankrupt, among which was the property here sued-for. That he holds the same as such trustee under and by an order of the'bankrupt court of the United States, which said order was made and entered on, to-wit, the 21st day of November, 1898. Wherefore defendant prays judgment that said suit be dismissed for want of jurisdiction.” To this plea the plaintiff demurred upon the following grounds: 1. Said plea is no answer to the complaint. 2. Said plea fails to show that the property is not the property o'f plaintiff. 3. Said plea does not set up such a state of facts as ousts this court of jurisdiction. 4. It fails to show that the bankrupt court ordered-the defendant as such trustee to take possession of the plaintiff’s property. 5. It fails to show that the bankrupt court of the United States for the Southern Division of the Northern District of Alabama has exclusive jurisdiction of the acts of trustees under said act. This demurrer was overruled.
    The material facts of the case are sufficiently shown In the opinion.
    The defendant, as a witness, testified that he knew the property ’in controversy, and that it was in the possession of the sheriff in the store which was formerly occupied by the bankrupt Ware, in Anniston, Alabama; that he got possession of this property, together with the other property of the bankrupt from the sheriff, after he had presented the order of the Federal court to him. The said witness was then asked: “How he took possession of said goods?” The plaintiff objected to this question, because it called for immaterial and irrelevant evidence, and upon the court’s overruling his objection he duly excepted. The witness answered that he took possession of the property “as trustee of the estate of J. Walter Ware, bankrupt, and held such property as such trustee.” The plaintiff moved tó exclude this answer upon the ground that it was irrelevant and immaterial, and duly excepted to the court’s overruling his motion.
    The plaintiff offered evidence to show that at the time the trustee was appointed he, the plaintiff, gave said trustee notice that the property here sued for belonged .to liim and tliat such notice was given to 'the trustee before the Federal court ordered him to take charge of the bankrupt’s estate; that the property Here sued for belonged to the plaintiff and was, at the time the United States court ordered the trustee to take charge of it, tli e property -of pi aintiff.
    Upon objection on the.part of the defendant to the introduction of such evidence the court sustained the ■objection and the plaintiff duly excepted.
    The cause was tried by the court without the intervention of a jury, and upon the hearing of all the evidence, judgment Avas rendered in favor of the defendant. The plaintiff appeals, and assigns as error the several rulings of the trial court to which exceptions were reserved.
    Burnett & Culli, fur appellant.
    The district court ■cannot restrain the State courts, but it can restrain parties litigant in the State courts, Avhenever it becomes necessary to give force and effect to the jurisdiction and power conferred upon it by the bankrupt act.— In re Dudley, 1 Penn., L. J. 302; In re Wm. Ghristey, 3 How. 292; Irving v. Hughes, 2 B. E-. 62. Even § 71,1 of the U .S. Rev. Stat., which gaAre exclusive jurisdiction to the Federal courts ewer all matters and proceedings in bankruptcy does not extend to actions brought by assignees to collect the assets of bankrupts.— Wonts v. Young, 17 B. R. 90; Kidder v. Hockrobin, 18 T>. R. 146; Hill r. Fleming,39 Ga. 662.
    The evidence shows Avithout conflict that the property Avas not in the possession of the bankrupt when the trustee took charge, but he himself swears that it was in the possession of the sheriff of Etowah county, from whom he received the goods. A person whose property has been seized under a Avarrant may sue the marshall in a State court. — Marsh v. Armstrong, 11 B. R. 125; s. 0., 20 Minn. 81; Buck v. Golbreath, 7 Minn. 810; In re Marks, 2 B. R. 575.
    A trustee in bankruptcy cannot maintain a suit to set aside a conveyance by the bankrupt in a Federal court, if the requisite citizenship does not exist. — Bwtnet't v. Morris Her. Go., 91 Fed. Rep. 365.
    
      J. E. Blackwood and Hood & Murphree, contra,.
    cited J. I. Case Plow Works v. Finks,.81 Fe'd. Rep. 529..
   HARALSON, J.

This suit was brought in the State? court by the plaintiff, Turrentine, against the appellee,, Blackwood, defendant, to recover from him personal, chattels in specie. Before the suit was brought^ the defendant had been duly elected and qualified as trustee in: bankruptcy of one Ware, who had filed his petition to be adjudged a bankrupt, in the District Court of the-United States for the Southern Division of the Northern District of Alabama. That court, on the 21st of November, 1898, made the following order: “In the matter-of J. Walter Wain in bankruptcy: — In this matter, the bond of J. E. Blackwood, trustee, having been approved, if is ordered by the court that the property mentioned! in the petition in this court be turned over to- the said J. E. Blackwood as such trustee.” It was -shown that the property sued for, together with a stock of goods, was at the time in the hands- of the sheriff of Etowah county in this State, kept in 'a storeroom -in Gadsden in-said county, where the bankrupt, Ware, had carried on a general merchandise business; that under said order the defendant, as such trustee, went into the possession of said goods and still holds file same, delivered to him by said sheriff.

These and other facts proper to show the rightful possession of said property by the defendant as trustee, and that the jurisdiction -of said United States court to administer said bankrupt’s estate had attached, and further, that its jurisdiction was exclusive for that purpose, were pleaded to the jurisdiction of the State court to entertain this suit -to take the property -out -of -the possession of defendant as trustee and the custody of the bankrupt court, proceeding to administer the same. The case was tried upon the amended plea No. 1 of the defendant. A demurrer was interposed to it, -on -several grounds, which was properly -overruled by the court.

It must be conceded that the bankruptcy court has no jurisdiction -over -a State court, but it has complete-jurisdiction -of the assets of the bankrupt and' his creditors, and may fine and imprison any of them for proceeding in the State, court to interfere with the 'assets, of the bankrupt, without the permission of the district court. — Brandenburg on Bankruptcy, 100, and authorities cited. The same author 'states that “The jurisdiction of a State court does not extend to the administration of the assets of an insolvent bankrupt, but the-property * * * should be surrendered into the-court of bankruptcy to be there administered upon, * * * and any creditor who holds a claim against the estate of the bankrupt, Avhich might be provecí in bankruptcy, AA'hether the debt is secured by lien or not, can only enforce such debt in the State court upon permission of the district court.” — p. 101; Collier on Bankruptcy, 21. See also 1-Iigh on Beceivers, §254; In re Anderson, 23 Fed. Rep. 482, 496.

Conceding that the State 'and Federal courts have 'concurrent jurisdiction in certain instances over the bankrupt’s property, another principle is universally acknoAA'ledged, “that AAdien 'two courts have concurrent juisdiction, that AAdtich first takes cognizance of the ease-has the right to retain it to the exclusion of the other; that if a trust estate is being administered by a court of competent jurisdiction, or when property is in gremio Jegis of a court of rightful jurisdiction, no other court can interfere and Avrest from it the possession and jurisdiction first obtained.” — Gay, Hardie & Co. v. Briarfield C. & I. Co., 94 Ala. 308; Gould v. Hays, 19 Ala. 438; 12 Am & Eng. Encyc. Law, 292. The Supreme Court of the United States, referring to the same subject, say: “These rules have their foundation, not merely in' comity but on necessity. For if one court may enjoin, the other may retort by injunction; and thus the parties be without remedy, being liable to a process for contempt in 'one ‘if they dare proceed in the other. Neither can one take property from the custody of the-other by replevin, or any other process, for this would produce a conflict extremely embarrassing to the 'administration of iustice.” — Peck v. Jenness, 7 How (U. S.), 624-5; Case Plow Works v. Finks, 81 Fed. Rep. 529, 531, Southern Granite Co. v. Wadsworth, 115 Ala. 570. The-•last case cited.was one similar in its essential features to •the one in hand, where the question here presented was fully considered and decided adversely to the contention ■of the plaintiff:.

There was no error in allowing the defendant to answer that he presented the order of the district court to the sheriff and as trustee acquired the possession of the goods from him, and held the property as trustee. While the suit was agninst him individually, he had the right to show that he held as trustee, and not otherwise. Furthermore, there was no pretense that he acquired and held possession of the property otherwise than as trustee. — So. G. Co. v. Wadsworth, supra. Nor was there error in. refusing to allow the proof, that at the time the trustee took 'possession, the plaintiff notified •him that the property sued for belonged to him, and that it was his property at the time the bankruptcy court ordered the trustee to take charge thereof.

The cause was tried without the intervention of a jury. The court finding the issues in favor of the defendant, 'abated the writ of detinue, in which there was no ■error.

Affirmed.