Opinion ID: 1550675
Heading Depth: 1
Heading Rank: 2

Heading: Jurisdiction of the Court under the Statute

Text: Appellants argue that: Seventh Proposition: By the terms of the statute the court was without jurisdiction. Since this question attacks the jurisdiction of the court under the terms of the applicable statute, it would seem, in some respects, more orderly to treat of it before we proceed to the treatment of res judicata. We have reversed the treatment of the two points because it is necessary in res judicata to treat of the Ashton and Bekins cases in considerable detail, and with this treatment in mind our treatment of the other point may be more readily understood. The argument of appellants under this point runs somewhat as follows: If the Bekins case did not overrule the Ashton case on the question of Federal power, then it follows that the Supreme Court in the Bekins case must have decided that the District involved was not a governmental agency. This argument is premised upon the holding of the Ashton case that since the agency there involved was a state agency, the statute there in question usurped the governmental powers of the State. The Court in the Bekins case held that the second Act did not usurp the sovereign powers of the State. Appellants then carry their argument  since the District involved in the Bekins case was determined not to be a state agency, then the Ashton case is still the law. The District involved in the principal case is a state agency under California decisions, therefore the Court has no jurisdiction. But appellants' conclusion is wrong. The Court in the Bekins case did not premise its decision on the fact that the District involved was not a state agency, but rather that the Act as drawn did not usurp state powers. Let us quote again from the Bekins decision, 304 U.S. page 51, 58 S.Ct. page 815, 82 L.Ed. 1137, wherein the Court quotes the Committee on the Judiciary: `The bill here recommended for passage expressly avoids any restriction on the powers of the States or their arms of government in the exercise of their sovereign rights and duties. No interference with the fiscal or governmental affairs of a political subdivision is permitted. The taxing agency itself is the only instrumentality which can seek the benefits of the proposed legislation.   ' The Court then states: We are of the opinion that the Committee's points are well taken and that chapter 10 [§§ 81-84] is a valid enactment. The statute is carefully drawn so as not to impinge upon the sovereignty of the State.   The remainder of the reasoning of the Court is upon the basis that while state agencies may be immune from taxation by the federal government, still consent of the state may remove that obstacle; that it follows, therefore, that a state may consent to bankruptcy power over its agencies being conferred upon the federal courts. Let us quote further from the Court's opinion (p. 54 of 304 U.S., page 816 of 58 S.Ct., 82 L.Ed. 1137): The bankruptcy power is competent to give relief to debtors in such a plight and, if there is any obstacle to its exercise in the case of the districts organized under state law it lies in the right of the State to oppose federal interference. The State steps in to remove that obstacle. The State acts in aid, and not in derogation, of its sovereign powers. It invites the intervention of the bankruptcy power to save its agency which the State itself is powerless to rescue. Further, the Supreme Court may have found procedural differences in the two Acts to justify the conclusion that the later Act did not impinge the sovereign rights of the State. Assuming that it did so, we do not deem it within our province to reexamine the procedural aspects of the two Acts to say that the Supreme Court was wrong in its determination that there was a distinction. The premise upon which the Appellants base their entire argument having fallen, there is nothing left to their point. The Bekins case held without question that the Act is constitutional as applied to a California Irrigation District, organized under the same California Statute as the one here involved. That case is binding upon us.