The Montgomery advertiser., 1902-05-20
JUDGE JONES RENDERS IMPORTANT <,
 DECISION IN A BANKRUPTCY CASE

Judge Thomas @. Jones of the United States Court for the Middle and North ern Districts of Alabama in chambers yesterday rsndersd an. opinion in the case of Tune from the Northern District. which is of general iinportance.
 It settles some new questions as to the exempt property of bankrupts, and re- views many decisions on points on which there is great conflict in the authorities
 II decides that the levy of an attach ment against an insolvent man, taken within four months of his filing hts peti- ton in bankruptcy. when he is ajudged bankrupt releases not only the property l which goes to creditors, but also the l exempt property. It also holds that 1 summary proceedings, instead of a regu- lar law suit. can be resorted to compel delivery of the property where the person holds 1t under an attachment levy, if 1t is one that Is not protected by the bank rupt law, when the debtor Is declared a bankrupt. The decision in this case disposes of seventeen others, in which similar ques- tions were involved. Unless set aside by higher court, it will govern a good many question which have been perplsx- ing lawyers and referees. In bankrupt
 matters for long time.
 The, head notes and decision in the case
 are as follows:
 In the District Court of the United
 States, Northern Division of the
 - Northern District of Alabama.--In the matter of Thomas A. Tune. Bank rupt.--In Bankruptcy.
 i. Under the laws of Alabama. waiver of exemptions in a promissory note does not amount to 8 lien or pledge of any Of the debtors exempt property. or confer any ct tate or interest in 1t. The waiver may bring an estorpel into play. but only after judgment and execution on the debt.
 2. The court of bankruptcy should see to 1t, pending a discharge. that remedies for the collection of debts from which the discharge might absolve the debtor. shall not be perfected so as to condemn exempt property in satisfaction of debts from which the discharge intended to free It. / 3. Subdivision c Is destroyed by sub< division F of Section 0 of the bankrupt law. and the latter Is the only law TO garcing liens of attachment obtained against the iusolvent within four months of the adjudication.
 4 Whatever benefit results from the annulment of attachment liens extends | to exempt property. as well as to that which Is not exempt. It is the policy of | the law to allow the bankrupt as we'll as creditors to benefit by the changed sta l tus.
 | 5. An attachment ia a suit to coiiect simple contract debt can create lien only when perfected by valid judgment ! of condemnation. It Is a lien obtained through legal proceedings" and when the l insolvent debtor is adjudicated a bank | rupt. the bankrupt law annuls it.
 | 6. When the only right of possession | by a State court of attached property is | based on an attachment lien which Is annulied by the adjudication in bank ! ruptcy, the State court loses all 1urisdic- l ton of the rem. which is transferred into | the exclusive Jurisdiction of the court of bankruptcy. There is no longer any right of possession in the officer of the State 1 court, who then holds as bailee for the person rightfuiiy entitled to possession. l and becomes a trespasser If he fails to | deliver on proper demand.
 l 2. If in such case. the adjudication
 is timely and properly pleaded, the only | remaining Jurisdiction in the attaching court is to stay suit and await the deter mination as to the discharge. If such discharge Is granted and pleaded. the
 only jurisdiction is to dismiss or render
 ! Judgment for the defendant. If the dis l charge is not granted. or granted and q not pleaded. the court can render judg- \ ment only in personam: since the res was si itransferfed' by Ttfie~ adjudication to the
 exclusive Jurisdiction of the court of
 bankruptcy. and it's jurisdiction over the
 rem Is in no wise affected by the dis
 charge or refusal to discharge.
 S. The various decisions of the Supreme Court examined and reviewed: the result l held to be that a court of bankruptcy may inquire in a summary way as to an ad-
 verse claim, made by a stranger, to the
 property which belongs to the bankrupt
 If it appears that the claim is manifestly without foundation. 'it may order the | ,nI e. Ah tv,,G 0r1A punish refusal as contempt. without driving the trustee to resort to plenary
 suit to recover the property.
 g. The summary Jurisdiction as such ! matters Is busted. if determination of the validity of the adverse claims involves 1 the decision of matters in pals and the | weighing of conflicting evidence and l finding of facts, which. when presented.
 leave room for fair doubt as to the in-
 validity of the claim, since such a claim
 is not merely colorable. and delivery must then be compelled by suit in pien-
 ary proceedings in proper court.
 | 10. If, after attachment, and before | judgment the insolvent is adJudicated a bankrupt within four months. etc.. and properly pleads the discharge. the State
 court refuses to regard 1t, and neverthe-
 less renders judgment of condemnation, l and directs a sale of the property, the re- | ceiver or trustee is entitled to an injunc- | ton and mandatory order to its officer to surrender possession, but there should l first be a rule to show cause, on petition,
 to which the parties affected should be made defendants and an opportunity given them to be heard. before injunction
 issues; though If the exigency Is pressing. a temporary restraining order may be
 made until the matter can be heard. | Il. In cases of concurrent jurisdiction, the court first obtaining possession of the property administers it; but where that court loses jurisdiction, and it Is trans | ferred by operation of valid laws to a court of the United States, which has ex- elusive jurisdiction of the subject matter, the question becomes one of obedience | to the paramount authority of the Con-
 stitution and comity can have no infu- | ence in determining the right.
 12. When justices court. in which an attachment has been levied on property | of a defendant, under circumstances un- | der which the bankrupt law annuls 1t, | and the defendant duly pleads the adju- l dication and the justice disregards it and gives judgment of condemnation and or-