Source: http://www.law.cornell.edu/supremecourt/text/293/367
Timestamp: 2015-01-31 12:57:52
Document Index: 19729115

Matched Legal Cases: ['§ 46', '§ 47', '§ 431', '§ 431', '§ 8', '§ 46', '§ 46', '§ 13', '§ 96', '§ 46']

SCHUMACHER, Sheriff, v. BEELER. | LII / Legal Information Institute
Supreme Court aboutsearch liibulletin subscribe previews SCHUMACHER, Sheriff, v. BEELER.
293 U.S. 367 (55 S.Ct. 230, 79 L.Ed. 433)
Decided: Dec. 17, 1934.
[HTML] Messrs. Coleman Avery, John W. Peck, and Frank H. Shaffer, Jr., all of Cincinnati, Ohio, for petitioner.
In granting the writ of certiorari, we limited our review to the question of the jurisdiction of the District Court under section 23b of the Bankruptcy Act. That provision, and its immediate context, section 23a, are set forth in the margin.
44 Stat. 664, 11 U.S.C. 46(a)(b), 11 USCA § 46(a, b).
The trustee's petition, which the Circuit Court of Appeals treated as a bill of complaint, did not allege diversity of citizenship. Nor did it contain clear and sufficient averments showing that the complainant, as against the sheriff claiming under a judgment recovered and an execution issued more than four months before the bankruptcy, had possession of the property in question by virtue of which the District Court would have jurisdiction of the suit irrespective of the consent of the defendant.
We think that the latter view is the correct one. The provisions of the earlier bankruptcy acts and the purpose and significance of section 23 of the Act of 1898, as originally enacted (
30 Stat. 552), were elaborately considered in Bardes v. Hawarden Bank, 178 U.S. 524, 20 S.Ct. 1000, 44 L.Ed. 1175. Section 8 of the Act of August 19, 1841 (
5 Stat. 446), conferred on the Circuit Courts concurrent jurisdiction with the District Courts of all suits, at law or in equity, between assignees in bankruptcy and adverse claimants. This broad grant of jurisdiction was continued in section 2 of the Act of March 2, 1867 (
14 Stat. 518). Lathrop v. Drake, 91 U.S. 516, 23 L.Ed. 414. The Act of 1867 recognized and emphatically declared the distinction between proceedings in bankruptcy, properly so called, and independent suits between assignees in bankruptcy and adverse claimants. Jurisdiction of such suits was conferred upon the District Courts and Circuit Courts of the United States by the express provision to that effect in section 2 of that act, and was not derived from the other provisions of sections 1 and 2, conferring jurisdiction of proceedings in bankruptcy. Bardes v. Hawarden Bank, supra, page 533 of 178 U.S., 20 S.Ct. 1000. The jurisdiction of such suits in law and equity was of the same character as that conferred upon the Circuit Courts by the eleventh section of the Judiciary Act of Sept. 24, 1789, 1 Stat. 78 (Morgan v. Thornhill, 11 Wall. 65, 80, 20 L.Ed. 60) and the conferring of that jurisdiction upon the federal courts did not divest or impair the jurisdiction of the state courts over like cases. Eyster v. Gaff, 91 U.S. 521, 525, 23 L.Ed. 403; Bardes v. Hawarden Bank, supra, pages 532, 533 of 178 U.S., 20 S.Ct. 1000.
It was with this legislative background that the Congress undertook the framing of the Act of 1898 (
30 Stat. 544). The distinction between proceedings in bankruptcy and suits between trustees in bankruptcy and adverse claimants was maintained. As appellate jurisdiction had been vested in the Circuit Courts of Appeals by the Act of March 3, 1891 (
26 Stat. 826), the Act of 1898, in lieu of the 'general superintendence and jurisdiction' given to the Circuit Courts by the Act of 1867 (section 2) 'of all cases and questions' arising in bankruptcy, conferred upon the Circuit Courts of Appeals the jurisdiction 'to superintend and revise in matter of law the proceedings of the several inferior courts of bankruptcy within their jurisdiction.' Section 24b (11 USCA § 47(b). But the Circuit Courts at that time were still courts of original jurisdiction and, by section 23 of the Act of 1898, the Congress provided the extent to which the Circuit Courts should have jurisdiction of suits at law or in equity between trustees in bankruptcy and adverse claimants. Section 23, as originally enacted, was as follows (
30 Stat. 552, 553):
'Sec. 23. Jurisdiction of United States and State Courts.
By section 289 of the Judicial Code of 1911 (
36 Stat. 1167), 28 USCA § 431 note, the Circuit Courts were abolished; and by section 291 of that act (28 USCA § 431 note) it was provided that wherever, in any law not embraced within the Judicial Code, any power or duty is conferred or imposed upon the Circuit Courts, that power and duty shall be deemed to be conferred and imposed upon the District Courts. This provision had the effect of amending section 23a of the Bankruptcy Act so as to make it apply to the United States District Courts instead of the United States Circuit Courts. Formal amendment, to conform the language of the section to the fact, was made by the Act of May 27, 1926, § 8, 44 Stat. 664 (11 USCA § 46(a).
After the decision in the Bardes Case, and by section 8 of the Act of February 5, 1903 (
32 Stat. 797, 798), section 23b was amended by adding, after the words 'unless by consent of the proposed defendant,' the following: 'except suits for the recovery of property under section 60, subdivision b, and section 67, subdivision e.' 11 USCA § 46 note.
The excepted suits are those brought by the trustee in bankruptcy to recover property transferred by the bankrupt in effecting preferences made voidable by the Act, and suits to recover property conveyed by the bankrupt in fraud of creditors within four months prior to the filing of the petition in bankruptcy. The effect of the exception was to remove, as to these classes of cases, the requirement in section 23b of the consent of the defendant as a condition of the exercise of jurisdiction. The Act of 1903 also amended sections 60b, 67e, and 70e, so as to provide that in suits to recover property under those sections 'any court of bankruptcy,' and 'any state court' which would have had jurisdiction if bankruptcy had not intervened, 'shall have concurrent jurisdiction,' Act of February 5, 1903, §§ 13, 16, 32 Stat. 799, 800 (11 USCA §§ 96 note, 107(e), 110(e). The scope of the amendment of section 23b by the Act of 1903, in the light of the amendment by the same act of section 70ea question which was left undetermined in Harris v. First National Bank, supra (page 385 of 216 U.S., 30 S.Ct. 296)was passed upon in Wood v. A. Wilbert's Sons Shingle & Lumber Co., supra (pages 389, 390 of 226 U.S., 33 S.Ct. 125, 128). The Court there decided that the amendment of section 70e could not be regarded as intended to create a conflict with the amendment of section 23b, which did not include in the exception suits brought under section 70e. The Court said: 'In other words, the respective sections and their subdivisions confer jurisdiction on the designated courts so far as it is dependent upon the character of the suits, but when the condition expressed in subdivision b of section 23 exists, the consent of the defendant determines the court, except when the suit is 'for the recovery of property under section 60, subdivision b, and section 67, subdivision e.' These special exceptions exclude any other.'
By the Act of June 25, 1910 (
36 Stat. 840), section 23b was further amended so as to include in the exception suits for the recovery of property under section 70, subd. e, 11 USCA § 46. See Weidhorn v. Levy, 253 U.S. 268, 272, 40 S.Ct. 534, 64 L.Ed. 898.
See Whitney v. Wenman, 198 U.S. 539, 552, 25 S.Ct. 778, 49 L.Ed. 1157; Murphy v. John Hofman Co., 211 U.S. 562, 568570, 29 S.Ct. 154, 53 L.Ed. 327; Hebert v. Crawford, 228 U.S. 204, 208, 33 S.Ct. 484, 57 L.Ed. 800; Taubel, etc., Company v. Fox, 264 U.S. 426, 432, 434, 44 S.Ct. 396, 68 L.Ed. 770; Isaacs v. Hobbs Tie & Timber Co., 282 U.S. 734, 737, 738, 51 S.Ct. 270, 75 L.Ed. 645; Stration v. New, 283 U.S. 318, 321, 326, 51 S.Ct. 465, 75 L.Ed. 1060; Page v. Arkansas Natural Gas Corporation, 286 U.S. 269, 271, 52 S.Ct. 507, 76 L.Ed. 1096.