Year: 1875

L.


ERRONEOUS JUDGMENT


WASHINGTON August 20 1873
No. 37-october Term, ls74-Edson T. Stckney,
assignee in bankruptcy of j. yanderyeer, appellant
VS. Harrison wt-Appcal from the Circuit Court for
the Northern District OF Ohio.


Mr. Justice Clifford delivered the opinion of the Court
Circuit have concurrent jurisdiction with the
district of the district of all suits at law
in equity which may or shall be brought by the assig
neo in bankruptcy against any person claiming ad
interest in any property rights of property OF
the bankrupt transferred to or vested In such assig
nee, by such person against such assignee,
touching any such property rights of property
transferred to or vested in such assignee in the for
mcr "a Stat at Large 51S) Appeals in such cases
may be taken from the district courts in all cases Of
equity and wrts of may be allowed from the cir
cult courts to the district courts in all cases law
arising under that provision where the debt damages
claimed amount than $500 provided tho party
claiming such appeal or writ of error shall scasonaby
comply with the conditions set forth in the eighth
ton of the Bankrupt act "a i'd, 520 Cases of the
kind may also be removed from the Circuit Court the
Supreme Court if the matter in dispute shall exceed
$1,000 if the party appealing shall comply with the acts
OF Congress regulating such appeals, and writs
by error from the Supreme Court the Circuit Court
n Stat at Large S3 IA i'd 521 2 i'd 24) Appli-
cation was made by the present appellant as such
assignee to the District Court of the district where the
bankrupt proceedings pending to determine
whether certain pretended liens upon certain described
lands belonging to the estate of the bankrupt
valid and operative and that he the assignee should
be directed by tho decree of the Court to sell the lands
and distribute the proceeds Three OF the persons
parties respondent appeared and waived the issu
and service of process and entered their appearance
in the suit Besides those the appellee here also
appeared and filed an answer, which is under oath
hnira llNr mari
TO the application, but the petition alleged that he
claimed some lien upon the promises and the
petitioner denied the existence Of any such lien Re-
sponsve that and to the prayer of the petitioner that
all questions and rights OF each and all the parties
therein named should be determined by the Court the
appellee such respondent pleaded to the effect that
the bankrupt, on the 81 of August 1859, executed
promssory note to John Huss or bearer for the sum OF
81 OOO and that he secured the by mortgage OF
the described lands that he the appellee the 4th
Of September following became surety for the bankrupt
TO certain national banks therein named in several
p.omissory notes, amounting in the aggregate to the
Of So, 260 and that the bankrupt at the same time
delivered to him the said FIRST mentioned
note and the mortgage collateral security to
protect him from his liability as such surety
by him to the Recorder and duly recorded in the
proper county that he has since been compelled to pay
two of said notes amounting 10 81 800 and that he Is
bound pay the residue with accrung Interest," and nc
AYERS that part OF the amount paid by him has
ever been refunded to him by the debtor Based upon
these representations he prays that the whole amount
for which he became surety may be decreed TO be lien
upon said lands Subsequently the assignee filed
ply to the answer OF the appellee, Wnch he alleges
that the mortgage note and mortgage made and
executed to the mortgage therein named without his
knowledge consent and the assignee denies that the
were ever delivered to the mortgage, as al
legged in the answer, and he AYERS that
he has no knowledge whether the appellee
ever became surety for the bankrupt whether
the mortgage note and mortgage ever delivered
him for the purpose represented, whether he has
paid anything such surety or whether any part
Of aid is still outstanding against him; and there
fore he the appellant denies each and all OF said aega
tions Superaddcd to such denals he also sets up in
avoidance of the pretended lien Of the appellee that be-
the appellee, well knew at the time of such delivery
that the debtor insolvent and unable to pay his
great debts and that the promssory note and mortgage
were delivered him by the debtor contemplation of
insolvency and bankruptcy-to wit within four
months before the filing Of the petition against him
under which be was adJudged bankrupt; and the ap-
pcant such assignee also charges that the appellee
had reasonable cause to believe ut the time that the
debtor was insovent and that he act
ing in contemplation of insolvency and with


view to evade and defeat the provisions OF the Bank
ruIt act Proofs we're taken on both sides from which
it appeared that the debtor the 30th of January,
1870 made general assignment Of all his property for
the general benefit of all his creditors he being largely
nsOlvent and the proofs also showed that the debtor
was subsequently adjudged a bankrupt in tho usual
course of proceeding and that the appellant here
duly appointed assignee Of his estate. Enough also
appears the transcript to warrant the statement that
the District Court oyerrulcd the allegations Of the
answer fled by the appellee and entered decree that
the lien claimed by him as such surety was in
operative and invalid, not only for the amount
actually paid, but also for the amount for which
he the appellee, such surety, still remains liable.
Power is undoubtedly vested in the Circuit Court to
such decree appeal if the appeal is perfected
and taken in ten days az provided in the eighth section
of the Bankrupt act but appeal claimed by
the losing party, any appeal allowed by
the District Court Instead Of that the appellee, on the
Both Of March, 1871 filed his petition Of review In tho
Circuit Court OF the district requesting that court 10
the supervisory jurisdiction which is conferred
upon the circuit courts by the first clause Of the second
section OF the Bankrupt act, in which petition he
charged that the decree of the District Court that the
lien set up in his answer to the original petition
imperative aud invalid is erroneous and hc prayed
that the finding and decree of the District Court may be
reversed vacated and set aside and that he hc petit
toner, for review, may be restored TO oil his just
rights Pursuant TO the petition of the appellee tho
Circuit Court passed order that the parties respond
en if thoy elect to answer the petition review shall
hle the before the dag named in the order
but filed by the respondents; and
the parties having subsequently been heard upon the
petition OF review the Circuit Court entered a decree


that the decree Of the District Court be reversed with
costs and that the lien claimed by the petitioner in
view more fully set forth in the record, is good
and valid lien upon the premises Pending tho petition
Of review tho assignee, by leave Of the
of the Circuit Court to INQUIRE into The
matters in controversy, in and form a. set
forth in the petition Of review but the Circuit Court
notwithstanding that plea entered the decree reversing
the decree Of the District Court and the assignee took
appeal to this court thereto authorized by the
act OF Congress allowing appeals in Of equity and
/ Of admiralty and OF marine jurisdiction e Stat. at
Large 244) Two principal objections taken to the
proceedings tending show that this Court has no
Jurisdiction hear and determine the case under the
powers conferred by tho Bankrupt act.-FirsL
Because the original pleading in the District Court Il
suit VA equity, commenced under the third clause Of
the second section Of the Bankrupt act which could
only be removed into the Circuit Court by appcal as
provided in the eighth section Of that act Second Be


cause the appeal VIII not lie from the Circuit Court 20 tins
Court from the decree of the Circuit Court rendered In
petition Of roview Glod under the supervisory iurs


dicion conferred upon tho Circuit Court by the first
clause Of the second section Of the sad Bankrupt act


In such case-where neither the Circuit Court nor
this Court have jurisdctiUn--the Court say If the
former Court has entered Judgment or decree for the
complainant this Court will the Judgment and
remand The cause with directions dismiss the suit
| And IL SO ordered