Court Opinion

ID: 8820525
Source: CourtListenerOpinion
Date Created: 2022-11-26 15:31:19.328378+00
Date Added: 2024-06-11T17:04:37.126015
License: Public Domain

HOUGH, Circuit Judge
(after stating the facts as above). [1] Under the Constitution bankruptcy is wholly a creature of statute, and under the present act of 1898 no authority can be found for staying suits by or against bankrupts, except section 11 (Comp. St. § 9595). This is true, notwithstanding that upon other and more general principles of law the bankruptcy court may stay suits, even in state courts, which interfere with the administration of the estate in charge of such bankruptcy court. In re Friedlaender, 233 Fed. 250, 147 C. C. A. 256; In re Amy (C. C. A.) 263 Fed. 8.
[2] It seems to have been thought below that, since a discharged bankrupt is for purposes of administering his estate still subject to the jurisdiction of the bankruptcy court (In re Margolies [C. C. A.] 266 Fed. 203), therefore such bankrupt might apply to that court for protection against what he conceived to be the erroneous action of the state tribunal. This is wrong; the nature of a discharge was pointed out in the Margolies Case, supra, and it has been too often said to need citation that, while the granting of a discharge is a function of the bankruptcy court alone, the effect thereof is for any court in which it is duly pleaded or otherwise submitted for judgment.
In the ordinary case, such as this suit of Niles v. Havens, a discharge is a defense; such defense is one that the state or any other court is bound to consider (Hill v. Harding, 107 U. S. 631, 2 Sup. Ct. 404, 27 L. Ed. 493), and if error is committed in failing to accord to the discharge its due weight, the way is open to the national Supreme Court (Dimock v. Revere, etc., Co., 117 U. S. 559, 6 Sup. Ct. 855, 29 L. Ed. 994). But no authority exists for leaving the tribunal, where the discharge was or might have been pleaded, and enj oining the collection of a judgment against a discharged bankrupt because the bankruptcy court thinks that some other tribunal erred either in fact or law as to the effect of such discharge. - ■
The bankruptcy courts possess no such revisory powers; the true doctrine was early pointed out by Brown, D. J., in Re Rosenthal (D. C.) 108 Fed. 370. The point was distinctly ruled in a case not distinguishable from this in Hellman v. Goldstone, 161 Fed. 913, 88 C. C. A. 604, and In re Weisberg (D. C.) 253 Fed. 833, correctly covers the whole matter.
The order under review is reversed, with costs.