Court Opinion

ID: 6861209
Source: CourtListenerOpinion
Date Created: 2022-07-23 20:48:52.321096+00
Date Added: 2024-06-11T16:05:14.805485
License: Public Domain

FOSTER, Circuit Judge
(dissenting).
Of course, in many cases where a state court has custody of the res in a suit to foreclose a definite lien prior to bankruptcy, the bankruptcy court ought not to interfere. In this ease I agree with the conclusion of the District Court that the proceeding in the state court was on a general creditor’s bill and the receiver was appointed to hold the property for all the creditors. The lien of the state of Texas was unliquidated, indefinite as to amount, and did not cover any specific property that could be identified when the suit was filed. The lien was inchoate before judgment. It is fundamental that when a sovereign state voluntarily goes into court she is to be treated the same as any other litigant. There is no doubt that the corporation was insolvent. 'The claim for taxes could be adjudicated and all the rights of the state preserved in the bankruptcy proceedings. The jurisdiction of the bankruptcy court was superior to that of the state court and it owed the state court no comity. The ends of justice and its'orderly administration would be better served by affirming the action of the District Court.
For these reasons, I respectfully dissent.