Case ID: f_152/html/0587-01.html
Source: Caselaw Access Project
Author: {"author": "J. B. McPHERSON, District Judge.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

In re KANE et al.
    (District Court, E. D. Pennsylvania.
    April 2, 1907.)
    No. 2,416.
    Iíankruptcy — Jurisdiction of Court — Funds in Hands of State Court.
    Where, at tlie time of the filing of a petition in bankruptcy, an attachment suit was pending in a state court in which a fund claimed by the bankrupts and also by others had been brought under the control of the court by a garnishment, such court is the proper tribunal to determine the rights of the several claimants thereto, and the bankruptcy court is without jurisdiction to make such determination, except by consent of all parties in interest.
    In Bankruptcy. On certificate from referee.
    David Davis, for claimant.
    James B. Givin, for bankrupts.
   J. B. McPHERSON, District Judge.

I do not think the referee gave sufficient weight to the attachment proceedings in the common pleas of Philadelphia County. These were begun nearly three months before the petition in bankruptcy was filed, and J. Joseph Murphy was summoned as garnishee. He then held in his hands, and still holds, the sum of $500, to which, either in whole or in part, there are several claimants, including each of the bankrupts. The money has never been in the control of the District Court, and its ownership is a fairly disputable question. Clearly, as it seems to me, the court of common picas is the proper tribunal to settle this controversy, unless all parties in interest have submitted themselves to the court in bankruptcy. The referee thought that such submission had been made, and therefore decided the case on the merits, and entered an order directing the garnishee to pay over to Mary Murphy the $500 now in his hands. In making this order, I think the referee was in error. It may be that Mary Murphy, Kane, and Sweeney did submit themselves to the jurisdiction of the District Court; but it is plain that the garnishee declined to follow this course, and that he has an individual claim upon part of the fund. He set up the pendency of the attachment proceedings at an early stage of the hearing before the referee, and duly renewed the'objection after the referee had made his report, thus preserving his rights and bringing the question before the court for determination.

The Court of Appeals of this circuit has, I think, in effect decided the point in Tennessee, etc., Co. v. Grant, 14 Am. Bankr. R. 288, 135 Fed. 322, 67 C. C. A. 676. It may be that Metcalf v. Barker, 187 U. S. 175, 23 Sup. Ct. 67, 47 L. Ed. 122, cited by the Circuit Court of Appeals, and apparently relied upon, in some degree at least, to support the decision of that court, should be regarded as somewhat more restricted in scope than may be indicated by the opinion in Tennessee, etc., Co. v. Grant. The later case of Clarke v. Larremore, 188 U. S. 488, 23 Sup. Ct. 363, 47 L. Ed. 55, in which Metcalf v. Barker is referred to and distinguished, may in effect have qualified Tennessee, etc., Co. v. Grant to some extent; but I do not think that it is for this court to pronounce with positiveness upon that question. If the Circuit Court of Appeals thinks that its ruling should be modified, it will no dou,bt take a fitting occasion to declare its opinion.

If the trustee sees proper to urge his claim against the fund in the common pleas, that court will no doubt permit him to intervene for the protection of the bankrupts’ interests, whatever they may be.

The order directing J. Joseph Murphy to pay $500 to Mary Murphy is' set aside.