The New York herald., 1877-09-22
UNITED STATES SUPREME COURT.
BANKRUPTCY OF THE STATE AND
FEDERAL COURTS.

FEDERAL COURTS.
WASHINGTON, Sept 81, 1877.
Tho following decision has been rendered by the
United States Supreme Court
No 4S Horace B. Ciain, plaintiff In error, Julius
Houseman, assignee in bankruptcy of d. b. Comstock
and Van h. Young-ln error to the Supreme Court Of
the State of New York.
This action was brought in May. 1872, in the New
York supreme Court, county OF Kings, by julius
HOuseman ass 'gnee IN bankruptcy Of Comstock L.
Young, against Horace b. Cla1in, under the thirty
fifth OF the Bankrupt act to recover tue
81 s35 81, with interest," being the amount collected
by Claim on judgment against the bankrupls recov-
cred within tour mouths before the commencement OF
proceedings III bankruptcy. The ground OF action,
stated in the complaint WAS that lhey (the bankruptcy
suffered the judgment be taken by DEFAULT with in
TO give Cahn preference over their Oncr credi
knew or had reasonable cause TO believe that they
were nsolvent, aud that tho judgment was Obtainsd
fraud oil the Bankrupt law. The defendant de-
INJURED TO the complaint, assigning as cause first,
that the Court had jurisdiction OF the subject OF
the action; second, that the complaint did state
facts sufficient to constitute a cause OF action Judg
mcnt rendered Tor the plalnuf 18Th day OF
January, 1873 and was subsequently affirmed boln by
the General Term OF the supreme Court and by the
Court OF Appeals. This judgment Is brought here by
writ OF error undcr the 1867, which superscdes
the twenty-Gflh section OF the Judiciary act
The point principally relied on by the plaintiff in
error that gnec IN bankruptcy cannot sue in
the State courts. II Is argued that the cause of
action arises purely and solely out OF the provisions
act OF Congress, and can only be prosecuted IN
tue courts Of the United States the state
ing no jursd the subject II recently
settled that The several district courts Of
the United states have jurisdiction under Bank
rupt law i causes arising out OF proceedings In bank
ruptcy pending in other districts. There mad been
much doubt the SUBJECT but 1t finally
scttlcd at ths last term OF this Court IN
favor of tho jurisdiction. (Latnrop vs. Drake, 9l
u. ;. Rcp 5l6) Had the dccigion been otner-
wise. rs ior "a long period was generally supposed
10 be the law, assanccs In bankruptcy, the posi-
ton OF tho plaint,n In error Is correct.
would been utterly without remedy to collect the
assets the bankrupt IN districts other than that IN
which the bankruptcy proceedings were pendne.
Nener Stale courts nor The federal courts could
have Jurisdiction. The revised statutes,
whether Inadvertently or not. have made the Jursdc-
ton o. the United Sialcs courts exclusive in a mat
ters and proceedings In bankruptcy" (Sec Ill
Whether this regulation will or Will not anec the cog
nziucc penary acons and suits II Is not necessary
now TO determine Al all events the question VI such
cogD zance be met IN this case. ana pcing I'M
portant tho principles involved would require nuch
deliberate consideration had II not been already IN
effect decided by the Court (Lathrop VS.. Drake and
Eystcr We. GanL Reaihrmed IN substance as iol.
lows
Under the Bankrupt act OF 1867 the assignee might
the State courts to recover the assets oil the
bankrupt exclusive Jurisdiction beng gwen 70 the
OF tho United STATES whether sucn exclusive
jurisdiction Is gwen by the Revised Statues qun,e
Inc laws oil tue Unied States are as much the law
of the lana any State State laws are, and, al
though IN their enforcement exclusive Jurisdlction
may gwen TO the federal courts, yet where such
exclusive Jusdict not given or necessarily im-
pied the state courts, having competent jurisdiction
In other respects, may be resorted u.
In such Cases tue state courts do not exercise new
jurisdiction conferred upon them, Dut tncr ordinary
Jursd derived from thor constitution under the
state law. Affirmed.
Mr. Justice Bradley delivered the opinion.