Case Name: In re IVES et al.
Court: United States Circuit Court for the Eastern District of Missouri
Jurisdiction: United States
Decision Date: 1879-03
Citations: 13 F. Cas. 181
Docket Number: Case No. 7,115
Parties: In re IVES et al.
Judges: 
Reporter: Federal Cases
Volume: 13
Pages: 181–183

Head Matter:
Case No. 7,115.
In re IVES et al.
[5 Dill. 146; 19 N. B. R. 97.]
Circuit Court, E. D. Missouri.
March, 1879.
J. La Due and William R. Walker, for bankrupts.
John D. Davis, for objecting creditor, Harvey Bates.
[Reported by Hon. John F. Dillon. Circuit Judge, and here reprinted by permission.]

Opinion:
DILLON, Circuit Judge.
The decision made by the district court is supported in two opinions of an able and experienced bankruptcy judge. In re Little [Case No. 8,391], Blatchford, J.; In re Leighton [Id. 8,221], decided by the same judge. A contrary opinion was given by another very learned judge. Re Burke [Id. 2,156], Deady, J.
The question is one of considerable importance, doubtless, and I have considered it with some care; but inasmuch as the bankrupt act is now repealed, I shall dispose of it without extended argument in support of my conclusion.
The district court not only has bankruptcy jurisdiction, but is the only court of original jurisdiction in bankruptcy. The petition filed in that court by the bankrupts was in due form in every respect, and set forth all the facts as to residence and otherwise necessary to state a case within the jurisdiction of the court. An adjudication of bankruptcy on this petition was duly passed and entered. An assignee was appointed, a deed of assignment was executed, debts were proved, meetings of creditors held, and the estate administered. In due course, after the lapse of several months, the bankrupts applied for a discharge, whereupon one of the creditors, who had before proved a claim, appeared and opposed the discharge, on the ground that the court had no jurisdiction to grant it, by reason of the existence of a fact en pais, viz., want of residence- in the district for the requisite length of time before the filing of the petition in bankruptcy.
It is my judgment that the effect of a decree of adjudication cannot be thus overcome. This objection is not among those specified in the act as grounds of opposing the discharge. Rev. St. § 5110, 5111. The principle decided in Michaels v. Post, 21 Wall. [88 U. S.] 398, and in Sloan v. Lewis, 22 Wall. [89 U. S.]. 150, is inconsistent with the right to attack the decree of adjudication in this manner. "Such a decree," says the supreme court in the case first cited, "is in the nature of a decree in rem as respects the status of the-party, and in case the court rendering it has jurisdiction (a case within whose jurisdiction was shown by the petition filed therein), it is only assailable by a direct proceeding in a competent court, if due notice was given and the adjudication was correct in form." So in the case of Sloan v. Lewis, where the-record of the bankruptcy court showed on its face jurisdiction, it was held that the adjudication of bankruptcy was conclusive in a collateral action. "Where the record (of the bankruptcy court) shows jurisdiction," says the chief justice, "an adjudication -of bankruptcy can only be assailed by a direct proceeding in a competent court." 22 Wall. [89 U. S.] 157. An instance of such a direct proceeding is presented in Re Goodfellow [Case No. 5,536], Lowell, J. The decree adjudging the debtors to be bankrupt was never attacked in the district court. No petition or other direct proceeding to set the same aside was ever made. It is not attacked in the objections filed by Mr. Bates to the discharge of the bankrupts. It remains to-this present time unassailed and unreversed. The estate of the bankrupts has been administered under it.
It seems to me to be- against the general principles of the law relating to the effect of judgments and decrees of courts, and without any support in the special provisions of the bankrupt act, to allow a judgment, and especially such a judgment as a decree of adjudication in bankruptcy, to be overthrown, and all that has been done under it held to be void, in a proceeding in which the decree is not directly attacked, and where the question only arises incidentally on the application of the bankrupts for their discharge.
The decisions in the district courts referred to, holding a contrary view, were made before the decisions of the supreme court above cited, and are inconsistent with them, unless it can be held that the opposition to a discharge on this ground is a direct attack upon the decree adjudging the debtors to be bankrupt — a position I cannot admit to be sound.
The order of the district court dismissing the petition for adjudication is reversed, and the court ordered to overrule the fourth specification in opposition to the discharge, and to grant the discharge of the bankrupts. Ordered accordingly.