Source: https://supreme.justia.com/cases/federal/us/93/130/
Timestamp: 2019-04-23 02:28:58+00:00

Document:
1. Under the Bankrupt Act of March 2, 1867, 14 Stat. 517, the assignee might sue in the state courts to recover the assets of the bankrupt, no exclusive jurisdiction having been given to the courts of the United States. Quaere whether such exclusive jurisdiction is given by the Revised Statutes.
3. The statutes of the United States are as much the law of the land in any state as are those of the state, and although exclusive jurisdiction for their enforcement may be given to the federal courts, yet where it is not given, either expressly or by necessary implication, the state courts, having competent jurisdiction in other respects, may be resorted to.
3. In such cases, the state courts do not exercise a new jurisdiction conferred upon them, but their ordinary jurisdiction, derived from their constitution under the state law.
assignee in bankruptcy of Comstock and Young, against Horace B. Claflin, under the thirty-fifth section of the Bankrupt Act to recover the sum of $1,935.57, with interest, being the amount collected by Claflin on a judgment against the bankrupts, recovered within four months before the commencement of proceedings in bankruptcy. The ground of the action, as stated in the complaint, was that they (the bankrupts) suffered the judgment to be taken by default, with intent to give Claflin a preference over their other creditors, at a time when they were insolvent and when he knew or had reasonable cause to believe that they were insolvent and that the judgment was obtained in fraud of the bankrupt law. The defendant demurred to the complaint, assigning as cause first that the court had no jurisdiction of the subject of the action; secondly that the complaint did not state facts sufficient to constitute a cause of action. Judgment was rendered for the plaintiff on the thirteenth day of January, 1873, and was subsequently affirmed both by the general term of the supreme court and by the Court of Appeals. This judgment is brought here by writ of error under the second section of the Act of Feb. 5, 1867, 14 Stat. 385.
The point principally relied on by the plaintiff in error is that an assignee in bankruptcy cannot sue in the state courts.
require much deliberate consideration had it not been already in effect decided by the Court.
"It is a mistake to suppose that the bankrupt law avoids, of its own force, all judicial proceedings in the state or other courts the instant one of the parties is adjudged a bankrupt. There is nothing in the act which sanctions such a proposition."
"The debtor of a bankrupt, or the man who contests the right to real or personal property with him, loses none of those rights by the bankruptcy of his adversary. The same courts remain open to him in such contests, and the statute has not divested those courts of jurisdiction in such actions. If it has, for certain classes of actions, conferred a jurisdiction for the benefit of the assignee in the circuit and district courts of the United States, it is concurrent with, and does not divest that of, the state courts."
Pp. 91 U. S. 525-526.
Voorhees v. Frisbie, 25 Mich. 476, and others, but we think that the former cases are founded on the better reason.
The assignee, by the fourteenth section of the Bankrupt Act, Rev.Stat. sec. 5046, becomes invested with all the bankrupt's rights of action for property and actions arising from contract or the unlawful taking or detention of or injury to property and a right to sue for the same. The actions which lie in such cases are common law actions, ejectment, trespass, trover, assumpsit, debt, &c., or suits in equity. Of these actions and suits the state courts have cognizance. Why should not an assignee have power to bring them in those courts as well as other persons? Aliens and foreign corporations may bring them. The assignee simply derives his title through a law of the United States. Should not that title be respected by the state courts?
The case is exactly the same as that of the Bank of the United States. The first bank, chartered in 1791, had capacity given it "to sue and be sued . . . in courts of record, or any other place whatsoever." It was held, in Bank v. Deveaux, 5 Cranch, 61, that this did not authorize the bank to sue in the courts of the United States without showing proper citizenship of the parties in different states. The bank was obliged to sue in the state courts. And yet here was a right arising under a law of the United States, as much so as can be affirmed of a case of an assignee in bankruptcy. The second bank of the United States had express capacity "to sue and be sued in all state courts having competent jurisdiction, and in any circuit court of the United States." In the case of Osborn v. Bank, 9 Wheat. 738, 815 [argument of counsel -- omitted], it was objected that Congress had not authority to enable the bank to sue in the federal courts merely because of its being created by an act of Congress. But the Court held otherwise, and sustained its right to sue therein. No question was made of its right to sue in the state courts.
Under the bankrupt law of 1841, with substantially the same provisions on this subject as the present law, it was held that the assignee could sue in the state courts. Ex Parte Christie, 3 How. 318, 44 U. S. 319; Nugent v. Boyd, 3 How. 426; Wood v. Jenkins, 10 Met. 583.
been reached, the general principle being that where jurisdiction may be conferred on the United States courts, it may be made exclusive where not so by the Constitution itself, but if exclusive jurisdiction be neither express nor implied, the state courts have concurrent jurisdiction whenever, by their own constitution, they are competent to take it. Thus the United States itself may sue in the state courts, and often does so. If this may be done, surely, on the principle that the greater includes the less, an officer or corporation created by United States authority may be enabled to sue in such courts. Nothing in the Constitution, fairly considered, forbids it.
The general question whether state courts can exercise concurrent jurisdiction with the federal courts in cases arising under the Constitution, laws, and treaties of the United States has been elaborately discussed both on the bench and in published treatises -- sometimes with a leaning in one direction and sometimes in the other -- but the result of these discussions has, in our judgment, been, as seen in the above cases, to affirm the jurisdiction, where it is not excluded by express provision or by incompatibility in its exercise arising from the nature of the particular case.
When we consider the structure and true relations of the federal and state governments, there is really no just foundation for excluding the state courts from all such jurisdiction.
under the laws of the United States, may be prosecuted in the United States courts or in the state courts competent to decide rights of the like character and class, subject, however, to this qualification -- that where a right arises under a law of the United States, Congress may, if it see fit, give to the federal courts exclusive jurisdiction. See remarks of MR. JUSTICE FIELD in The Moses Taylor, 4 Wall. 429, and Story, J., in Martin v. Hunter's Lessee, 1 Wheat. 334, and of MR. JUSTICE SWAYNE in Ex Parte McNeil, 13 Wall. 236. This jurisdiction is sometimes exclusive by express enactment and sometimes by implication. If an act of Congress gives a penalty to a party aggrieved without specifying a remedy for its enforcement, there is no reason why it should not be enforced, if not provided otherwise by some act of Congress, by a proper action in a state court. The fact that a state court derives its existence and functions from the state laws is no reason why it should not afford relief, because it is subject also to the laws of the United States, and is just as much bound to recognize these as operative within the state as it is to recognize the state laws. The two together form one system of jurisprudence which constitutes the law of the land for the state, and the courts of the two jurisdictions are not foreign to each other, nor to be treated by each other as such, but as courts of the same country, having jurisdiction partly different and partly concurrent. The disposition to regard the laws of the United States as emanating from a foreign jurisdiction is founded on erroneous views of the nature and relations of the state and federal governments. It is often the cause or the consequence of an unjustifiable jealousy of the United States government which has been the occasion of disastrous evils to the country.
It is true, the sovereignties are distinct, and neither can interfere with the proper jurisdiction of the other, as was so clearly shown by Chief Justice Taney in the case of Ableman v. Booth, 21 How. 506, and hence the state courts have no power to revise the action of the federal courts, nor the federal the state, except where the federal Constitution or laws are involved. But this is no reason why the state courts should not be open for the prosecution of rights growing out of the laws of the United States, to which their jurisdiction is competent, and not denied.
A reference to some of the discussions, to which the subject under consideration has given rise, may not be out of place on this occasion.
"that the state courts will be divested of no part of their primitive jurisdiction further than may relate to an appeal, and I am even of opinion that in every case in which they were not expressly excluded by the future acts of the national legislature, they will, of course, take cognizance of the causes to which those acts may give birth. This I infer from the nature of judiciary power and from the general genius of the system. The judiciary power of every government looks beyond its own local or municipal laws and, in civil cases, lays hold of all subjects of litigation between parties within its jurisdiction, though the causes of dispute are relative to the laws of the most distant part of the globe. . . . When, in addition to this, we consider the state governments and the national government, as they truly are, in the light of kindred systems, and as parts of ONE WHOLE, the inference seems to be conclusive that the state courts would have concurrent jurisdiction in all cases arising under the laws of the Union where it was not expressly prohibited. "
These views seem to have been shared by the first Congress in drawing up the Judiciary Act of Sept. 24, 1789, for, in distributing jurisdiction among the various courts created by that act, there is a constant exercise of the authority to include or exclude the state courts therefrom, and where no direction is given on the subject, it was assumed in our early judicial history that the state courts retained their usual jurisdiction concurrently with the federal courts invested with jurisdiction in like cases.
their discoveries and inventions, which was passed in 1793, gave treble damages for an infringement, to be recovered in an action on the case founded on the statute in the circuit court of the United States, "or any other court having competent jurisdiction" -- meaning, of course, the state courts. The subsequent acts on the same subject were couched in such terms with regard to the jurisdiction of the circuit courts as to imply that it was exclusive of the state courts, and now it is expressly made so. See Patent Acts of 1800, 1819, 1836, 1870, and Rev.Stat.U.S., sec. 711; Parsons v. Barnard, 7 Johns. 144; Dudley v. Mayhew, 3 Comst. 14; Elmer v. Pennel, 40 Me. 434.
"the supreme, superior, district, or circuit court of some one of the states, or of the territorial districts of the United States, or a circuit or district court of the United States."
So, by acts passed in 1806 and 1808, jurisdiction was given to the county courts along the northern frontier of suits for fines, penalties, and forfeitures under the revenue laws of the United States. 2 Stat. 354, 489. And by Act of March 3, 1815, cognizance was given to state and county courts generally of suits for taxes, duties, fines, penalties, and forfeitures arising under the laws imposing direct taxes and internal duties. 3 Stat. 244.
These instances show the prevalent opinion which existed that the state courts were competent to have jurisdiction in cases arising wholly under the laws of the United States, and whether they possessed it or not in a particular case was a matter of construction of the acts relating thereto. It is true that the state courts have in certain instances declined to exercise the jurisdiction conferred upon them, but this does not militate against the weight of the general argument. See United States v. Lathrop, 17 Johns. 4. See especially the able dissenting opinion of Mr. Justice Platt, id., 11.
instituted courts-martial, as well as provided a complete code for the organization and calling forth of the militia, the entire law of Pennsylvania on the same subject might well have been regarded as void. Be this as it may, it was only a question of construction, and the Court conceded that Congress had the power to make the jurisdiction of its own courts exclusive.
"The propriety of entrusting the construction of the Constitution and laws made in pursuance thereof to the judiciary of the Union has not, we believe, as yet been drawn in question. It seems to be a corollary from this political axiom that the federal courts should either possess exclusive jurisdiction in such cases or a power to revise the judgment rendered in them by the state tribunals. If the federal and state courts have concurrent jurisdiction in all cases arising under the Constitution, laws, and treaties of the United States, and if a case of this description brought in a state court cannot be removed before judgment nor revised after judgment, then the construction of the Constitution, laws, and treaties of the United States is not confided particularly to their judicial department, but is confided equally to that department and to the state courts, however they may be constituted."
See the subject further discussed in 1 Kent's Com. 395, &c., Sergeant on the Const. 268; 2 Story on the Const., sec. 1748, &c.; 1 Curtis's Com., secs. 119, 134, &c.
The case of Teal v. Felton was a suit brought in the state court of New York against a postmaster for neglect of duty to deliver a newspaper under the postal laws of the United States. The action was sustained by both the supreme court and Court of Appeals of New York, and their decision was affirmed by this Court. 1 Comst. 537; 12 How. 292. We do not see why this case is not decisive of the very question under consideration.
that we hold that the assignee in bankruptcy, under the Bankrupt Act of 1867 as it stood before the revision, had authority to bring a suit in the state courts wherever those courts were invested with appropriate jurisdiction suited to the nature of the case.

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