Case Name: ENRIQUE CERECEDO, Plff., v. JOSÉ MARIÁ CALDERÓN, Dft.
Court: United States District Court for the District of Puerto Rico
Jurisdiction: United States
Decision Date: 1914-05-20
Citations: 7 P.R. Fed. 85
Docket Number: No. 974
Parties: ENRIQUE CERECEDO, Plff., v. JOSÉ MARIÁ CALDERÓN, Dft.
Judges: 
Reporter: Porto Rico Federal Reports
Volume: 7
Pages: 85–91

Head Matter:
ENRIQUE CERECEDO, Plff., v. JOSÉ MARIÁ CALDERÓN, Dft.
San Juan,
Law,
No. 974.
On Motion foe Writ of Error.
Bankruptcy Law — Complete.
1. The bankruptcy law is a system complete in itself, and necessarily exclusive.
Bankruptcy Law — Administration.
2. All matters connected with the administration of a bankruptcy estate and bankruptcy proceedings are exclusively governed by the provisions' of the bankruptcy law. These are steps in bankruptcy,
Bankruptcy — Controversy.
3. If the question is not as to administration of assets, but as to whether certain property is assets of the estate or not, there is a controversy • arising in bankruptcy proceedings, winch is not necessarily cognizable in a Federal court.
Note. — As to whether question relating to bankruptcy is a Federal question, see note in 62 L.R.A. 535.
Appellate Jurisdiction — Judicial Code, § 252.
'4. Judicial Code, § 252, is a re-enactment of § 24(a) of tbe bankruptcy act of 1898. The words “appellate jurisdiction” therein used .are-to be taken in a general sense, and not confined to appeals in equity. They embrace also writ of error at law.
Appellate .Jurisdiction — Controversy in Bankruptcy.
5. The distinction between law and equity is preserved in the Federal courts. An appeal is proper in equity and a writ of error at law.
Supreme Court — -Appellate Jurisdiction in Bankruptcy.
6. The Supreme Court has appellate jurisdiction from the district of the United States for Porto Rico only in cases of $5,000, with certain exceptions, amongst which are steps in bankruptcy. The appellate jurisdiction as to controversies arising in bankruptcy is limited to amounts exceeding $5,000.
Federal Question — -Bankruptcy.
7. An appeal does not lie in a controversy as in bankruptcy on the theory that the bankruptcy law presents a Federal question. A Federal question is presented in an appeal as to steps in bankruptcy, but not as to controversies arising in bankruptcy proceedings.
Opinion filed May 20, 1914.
'Messrs. Swvage <& Francis for motion.
M.r, II. G. Molina for Enrique Cerecedo.

Opinion:
HamiltoN, Judge,
delivered tbe following opinion:
- The trustee in the bankruptcy estate of José Villa Espetery brought suit on the law side of this court against José María Calderón to recover' money alleged to have been withdrawn by the defendant, as a special partner, from the firm. Judgment was rendered for the plaintiff for a sum exceeding $2,000. The defendant now files a petition for a writ of error from this court to the Supreme Court. The application is resisted on the ground that this is not a case for which any review by the Supreme Court is provided by statute.
. 1. The bankruptcy law is a system complete in itself, except so far as it adopts equity or common-law rules. Being a complete system, it is therefore necessarily exclusive in all matters within its scope. Tefft, W. & Co. v. Munsuri, 222 U. S. 114, 121, 56 L. ed. 118, 121, 32 Sup. Ct. Rep. 67.
2. The bankruptcy act, however, covers other matters than bankruptcy proceedings. All matters connected with the administration of a bankrupt estate are bankruptcy proceedings and are governed by the provisions of the bankrupt law exclusively. Appeals can be had in such instances only according to the provisions of that act. If no appeal is provided therein, none can be allowed. Tefft, W. & Co. v. Munsuri, 222 U. S. 114, 118, 56 L. ed. 118, 121, 32 Sup. Ct. Rep. 67.
3. Inasmuch, however, as the trustee has to collect in assets, there may arise conflicts as to what are within the scope of bankruptcy, and what are without it. If, for instance, a trustee seeks to subject property which may or may not belong to the bankrupt, this is not a step in bankruptcy, but is a controversy arising in bankruptcy proceedings. Coder v. Arts, 213 U. S. 223, 53 L. ed. 772, 29 Sup. Ct. Rep. 436, 16 Ann. Cas. 1008. This class of cases is governed by an entirely different rule, and is not necessarily cognizable in a Federal court. When such proceedings are brought there, it is a matter of convenience, and not because it is a matter of bankruptcy. That may be tbe very question at issue. An instance in point may occur at tbe very beginning of tbe bankruptcy proceedings. If creditors' file a petition and tbe debtor denies bankruptcy and demands a jury, tbis proceeding is to all intents and purposes a common-law action (although in tbis instance necessarily in tbe Federal court), and both tbe conduct of the jury trial and of further proceedings in an appellate court is governed entirely by tbe usual forms of procedure in common-law cases. Elliott v. Toeppner, 187 U. S. 327, 47 L. ed. 200, 23 Sup. Ct. Rep. 133; Thompson v. Mauzy, 98 C. C. A. 457, 174 Fed. 611.
Tbe case at bar is of such a character. Being a suit by a trustee to subject property denied by tbe defendant as being bankruptcy assets, it was not a step in bankruptcy, but a controversy arising out of bankruptcy proceedings.
- 4. Tbe defendant in tbis cause claims tbe right of appeal from the judgment of tbis court under § 252 of tbe Judicial Code [36 Stat. at L. 1159, chap. 231, Comp. Stat. 1913,. § 1229], which is a re-enactment of § 24a of tbe bankruptcy act of 1898. That section reads as follows: "Tbe Supreme-Court of tbe United States is hereby invested with appellate-jurisdiction of controversies arising in bankruptcy proceedings,, from tbe courts of bankruptcy, from which it has appellate-jurisdiction in other cases; and shall exercise a like jurisdiction from courts of bankruptcy not within any organized circuit of tbe United States and from tbe supreme court of tbe District of Columbia."
On tbe other side, it is contended that tbis section relates-, only to appeals and that, under General Order No. 36, the time-for appeals is limited to thirty days.
Under, tbe Federal system tbe distinction between equity and common law is strictly preserved. An appeal wbicb brings, up botb law and facts' lies only in equity cases, and in common-law matters, sueb as jury trials, tbe remedy is a writ of' error, wbicb brings up tbe matter of law only. Elliott v" Toeppner, 187 U. S. 327, 334, 47 L. ed. 200, 203, 23 Sup. Ct. Rep. 133. It is not to be supposed, however, that controversies-would arise out of bankruptcy proceedings only in matters cognizable in equity. Indeed, tbe Supreme Court in tbe case' of Elliott v. Toeppner beld that a writ of error lies in jury cases. See also Frederick L. Grant Shoe Co. v. W. M. Laird Co. 203 U. S. 502, 51 L. ed. 292, 27 Sup. Ct. Rep. 161. But these cases came up to tbe Supreme Court by way of review from tbe circuit courts of appeals, to wbicb court they bad been taken, and from wbicb court they were brought under § 25 of tbe bankruptcy act. Tbe question at present is, Do tbe words "appellate jurisdiction" in § 24a authorize tbe writ of error in such a case as at bar, or are they to be limited to strictly matters in equity? Tbe next section (25) sends certain matters to tbe circuit court-of appeals in strictly bankruptcy administration, but it also provides for a review of controversies by means of certiorari.
5. It is, of course, true that tbe word "appellate" may be used in a general sense. Tbe generic word for a review by a higher court is "appeal." "Appellate" may indicate rather' tbe result than tbe method of review, and cover botb appeals proper and writs of error. It has been beld that "§ 24a relates to controversies arising in bankruptcy proceedings in tbe exercise by tbe bankruptcy courts of tbe jurisdiction vested in them at law and in equity by § 2, to settle tbe estates of bankrupts, and to determine controversies in relation thereto." Ilewit v. Berlin Mach. Works, 194 U. S. 296, 300, 48 L. ed. 986, 987, 24 Sup. Ct. Rep. 690. Tbis case was itself one of appeal proper, and the point that § 24a covers jurisdiction vested in bankruptcy courts at law as well as in equity may not be necessary to the determination of that case. It would seem to provide a double remedy, inasmuch as in § 25b "controversies may be certified to the Supreme Court of the United States from other courts of the United States." Following the Hewit Case, however, this court holds that a writ of error will lie in a proper case.
6. Whát, however, is a proper case ? Section 24a goes on to speak of this appellate jurisdiction as "arising in bankruptcy proceedings from the courts of bankruptcy from which they have appellate jurisdiction in other cases." The Supreme Court, of course, has general appellate jurisdiction from the district court of the United States for Porto Pico, but it has such jurisdiction under Judicial Code, § 244, only in cases of $5,000, unless the suit relates to copyright or similar matters, to which may be added steps in bankruptcy proceedings as such. We do not take it that the words "appellate jurisdiction in other cases" can be said to apply to such other case where an appeal will not lie, such as a case here under $5,000.
7. It may be contended, however, that a controversy of the nature of that at bar is one which involves a Federal question under § 244 of the Judicial Code (somewhat as in the case of Revised Statutes, § 709) where money value is immaterial. The theory of this contention is that a law of the United States is in question, inasmuch as the bankruptcy statute is such a law, and the controversy is whether the trustee appointed thereunder has the right to a certain fund or not; This- would'be going too far, as its principle would include every matter whatsoever arising not only in steps in bankruptcy, but in collateral controversies growing out of bankruptcy proceedings.
The conclusion, therefore, is that in such controversies the jurisdictional amount controls, and that, as this claim is one under the jurisdictional amount provided for writ of error from this court, the application must be denied.
It is so ordered.