Evening bulletin. [volume] (Honolulu [Oahu, Hawaii]) 1895-1912, 1902-01-06
JUDGE ESTEE EXPOUNDS
n NEW POINTS
IN The BANKRUPTCY LAW
CONTINUED from page ~

! anu are given JuTlSulCllOn 10 dH'
point receivers and marshals. upon ap.
| plication of parties in interest d.
to take charge of the property OF
bankrupts after the filing of the peti.
ton and until II is dismissed or the
trustee is qualified. Section 2, sub.
division 3 of said Act.
And in addition to the jurisdiCtional
powers specifically enumerated, 1t Is
further provided that this Court shall
have power to make such orders. Is.
sue such process and enter such judg.
ments In addition to those specifically
provided for as may be necessary for
the enforcement Of the provisions OF
this Act. "-Scction 2. subdivision 10.
Indeed, 1t has been held that bank.
ruptcy proceeding Is in the nature OF
q proceeding in rem; the acquisition
OF jurisdiction is based upon the tax,
Ing possession by the Court. OF tho
debtors whole property and effects.
and upon its adjudication as to his
status. Hence the Federal Court in
which the bankruptcy proceedings are
commenced has Jurisdiction OF the
debtors whole estate wherever sit.
uatc.-Markinson VS.. Henry, Fed.
Cases No 9O9S.
Protection Of Creditors.
II Is further provided by subdivi
sion + of Section % of the Act. that
All levics, judgments. attachments
or other liens obtained through legal
proceedings against a person who IL
insolvent. at any time within four
months prior to the filing OF a petition
in bankruptcy against him, shall be
deemed null and void in case he is ad.
Judged a bankrupt and the property
affected by the lazy. judgment at.
tachment or other lien. shall be deem.
ed wholly discharged and released
from the same"
The decisions constituting this sec
ton are clearly to the effect that It
was the intention OF Congress by the
aforesaid section to prevent any cred
itor Of an insolvent debtor from OBJ
tanning any advantage over other
creditors by legal proceedings during
u period OF four months prior to the
filing OF a petition in bankruptcy,
whether voluntary or involuntary, anu
that all such liens were dissolved by
the adjudication.--lnr re Richards, 81
Fed 939; In re kenney, 1906 Fed. 1893:
| Bear vs.. Chase, 80 Fed. 900; st. Cyr
W. lbhl6hhlNt l'p T'us CNtt III "
Blair, los Fed. $50; lu re- Lesser. los
Fed. 2O3.
The province of the Court is 10 mar
shal the assets Ot the bankrupt 50
that there may be a proper admins
tration upon his estate. and also that
there may be a fair and just distribu.
ton thereof to his creditors entitled
thereto: and In 50 marshaling the as.
sets OF said estate, the Court mas full
power to restrain any State or Terri.
tOTial Court or officer from disposing
Of any Of said assets until the adjudI
cation by the United States Court Ol
the debtor as a bankrupt or the dis
missal Ut the petition.
The provisions OF the Bankruptcy
Act OF 1861, and which Act was IL.
ICrcc prior to the passage OF the Act
OF 1898, are practically the same as the
latter Act so lar as the jurisdiction III
the Court OF bankruptcy Is concerned I.
and there are numerous cases to b.
found where the Initcd States Courts
are sustained in their exercise Of thu
power to restrain all proceedings IN
State courts affecting the disposition
OF sale OF the property OF debtor
pending the decision OF the DiStric.
Court upon the question Of his bank.
ruptCy. This Is done so that the
rights OF all parties may be preserved
until the proper court can administer
upon the estate of the BANKRUPT or dis.
miss the petition as the facts upon the
hearing may disclose to be necessary.
In the case OF In re- Mallory, | Saw.
yer, IS, 3S Ted. Cases No. S99D. ait.
erwards affirmed by Judge Field on
appeal to the Circuit Court OF the
| Ninth Circuit, 1t was held that the
District Court had power to restrain
| thc State Court, In a case similar to
the case at bar and In a welI.Cunsldgr
ed opinion the Court said:
I'm voluntary cases. the filing OF the
petition Is an act OF bankruptcy, and
the debtor ut the same time surrCn
dcrs and Is forthwith adjudgCd bank.
rupt. The District Court Is thus cloth
cd At once In voluntary cases with jur.
iadictiOn over the debtor and his prop.
Crty. But where the proceeding is in.
voluntary, the debtor Is not adJu =, ed
. bankrupt until the return and hear.
ing oi the order 10 show cause. and
may not be then IL he have u sunlCirnt
defense. There is, therefore. good rea.
son for giving the Court power to en-.
Join between the time oil filing IN ,
creditors petition and the return oil
the order to show cause, as there u
IN these cases no voluntary surrender
OF the property and the title cannot
vest In the assignee until after adjudI.
cation"
See also the case OF Blake, MOfntt
& TOwne at al. vs.. Frances Valentine
Co. at al, 80 Fed. bgl ninth Circuit
where the Court held:
| ~ District Court vi the United
States a. court OF bankruptcy, under
the Act OF July /, 1895 has the power
10 enjOin the sale of property OF .
debtor under process from State
| Court. e"
The Court further holding that a
District Court mad the power to take
and "pr"Scry" the property until the
tune arrives when Il petilloa IN bans
IupiCy unh"T toe Act may be flied
against him, whore ii Is shown that
such process Is the result OF an act
! OF bankruptcy committed by the deb.
or since III" passage OF the act, In sui
i"rinL on" creditor to obtain a prefer
enc" through legal proceedings. Ii
"a kimbali. % Fed. 20. See also Ia,
decision OF this Court rendered in IT,.
matter ol the Bankruptcy Of Lum Man
suk. docidcd September 10Th. 1901.
Orders Of Court.