Case Name: In re BAJARDI et al. Appeal of McLAUGHLIN, State Superintendent of Banks, et al.
Court: United States Court of Appeals for the Second Circuit
Jurisdiction: United States
Decision Date: 1926-01-04
Citations: 9 F.2d 797
Docket Number: No. 241
Parties: In re BAJARDI et al. Appeal of McLAUGHLIN, State Superintendent of Banks, et al.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 9
Pages: 797–799

Head Matter:
In re BAJARDI et al. Appeal of McLAUGHLIN, State Superintendent of Banks, et al.
(Circuit Court of Appeals, Second Circuit.
January 4, 1926.)
No. 241.
Albert Ottinger, Atty. Gen., of New York (Robert P. Beyer, Deputy Atty. Gen., of New York, of counsel), for appellants.
David W. Kahn, of New York City, for appellees.
Before HOUGH, MANTON, and HAND, Circuit Judges.

Opinion:
HOUGH, Circuit Judge (after seating the facts as above).
Appeal and petition to revise being mutually exclusive (In re Groton, etc. [C. C. A.] 5 F.[2d] 63), we note that the matter now before us does not fall within any of the cases specified in section 25a of the Bankruptcy Act (Comp. St. § 9609). The proper procedure, therefore, is by petition to revise. In re Richardson Co. (C. C. A.) 3 F.(2d) 600.
No reason is seen why either the state or the Attorney General should be considered as a party to this appellate proceeding. The motion was directed against the superintendent of banks alone; neither the Attorney General nor the state was made a party, and neither of them has anything to appeal from. We regard this matter as a petition to revise, brought by the superintendent of banks..
We discover no question of Jurisdiction raised by the moving papers or answering affidavits, and in the alleged errors enumerated in the petition no allegedly Jurisdictional point is raised, except that the court below "erred in interfering with and assuming Jurisdiction over the sovereign right of administration of the said securities imposed by law upon the state of New York through its proper administrative officer."
This does not go to the capacity of the court to adjudicate, but to the propriety of its decision. Thus the narrow question here raised is whether 'the statutory provisions •above enumerated have) first, sought to create a right in the superintendent of banks exclusive of all courts to administer upon funds deposited with him pursuant to section 161; and second, whether, if such a scheme be the legislative intent, it can be regarded as operative if and when the nation renders private bankers subject to the operation of a national bankruptcy system, and that private bankers are so subject is not doubted.
We do not find it necessary to discuss or decide the second point, or consider the cases relied upon. In re Salmon (D. C.) 143 F. 396; In re Sage (D. C.) 224 F. 525. But under the first point we feel assured that the Legislature never intended to hand over to the superintendent the exclusive liquidation and distribution of one particular fund, to the exclusion of those courts which, under either insolvency or bankruptcy statutes, would necessarily be charged with the care and division of the rest of the banker's property.
It is sought to spell such exclusive right out of the phrase in section 161 that "such stocks or bonds shall be registered in the name of the superintendent of banks officially as trustee. " But the whole statute must be read, and from such reading it is to us clear that such trusteeship was not intended to prevent a sale, or transfer, or disposal of the proceeds thereof, when directed by the "order of a court of competent jurisdiction."
It cannot be doubted that the District Court for the proper district, sitting in bankruptcy, is a court of jurisdiction competent to obtain and administer the property of the bankrupt, and all of it. The very purposes for which the deposit is required by the statute are sufficient to show that the stocks, etc., were regarded by the Legislature as tlio property of the banker for the payment of bis debts to a specified class of creditors.
It would require very strong language to compel belief that the state Legislature intended to invite conflict with the constitutional prerogative of the United States in respect of bankruptcies, and to inflict upon the creditors of an insolvent, or any class of them, the useless expenses of a double administration. It is well known that the practice below merely followed the procedure in several earlier bankruptcies of private bankers. Two of them reached this court. In re Rosett, 122 C. C. A. 617, 204 F. 431; In re Jarmulowsky, 169 C. C. A. 297, 258 F. 231.
The order is affirmed, with costs.