Court Opinion

ID: 8755929
Source: CourtListenerOpinion
Date Created: 2022-11-26 11:45:56.345147+00
Date Added: 2024-06-11T17:01:15.251733
License: Public Domain

NEWMAN, District Judge,
after stating the case as above, delivered the opinion of the court.
We are to determine, on this petition for review, whether the judge of the District Court erred in sustaining the demurrer and dismissing the petition.
Section 2 of the bankruptcy act of July 1, 1898, c. 541, 30 Stat. 545 [U. S. Comp. St. 1901, p. 3420], grants to the District Courts, among other powers, the power “to transfer cases to other courts of bankruptcy.” Section 32 of the bankruptcy act (30 Stat. 554 [U. S. Comp. St. 1901, p. 3434]) is as follows:
“In the event petitions are filed against the same person, or against different members of a partnership in different courts of bankruptcy each of *692■which had jurisdiction, the cases shall he transferred, by order of the courts relinquishing jurisdiction, to and be consolidated by one of such courts which can proceed with the same for the greatest convenience of parties in interest.”
The District Court in Alabama, in the order transferring the case to Tennessee, found that the District Court of the Eastern District of Tennessee “can proceed with the bankruptcy proceeding against the Southern Car & Foundry Company for the greatest convenience of parties in interest,” and thereupon transferred the case and relinquished jurisdiction to the Tennessee court. No effort was made to review this action of the District Court in Alabama transferring the case to Tennessee. The order went into effect apparently without objection, and the Tennessee court has been since that time, and is now, engaged in administering the entire estate of the bankrupt.
The question presented by this record is whether the District Court in Alabama had jurisdiction to make the order transferring the case to Tennessee, and not whether the Tennessee court had jurisdiction of the case. The original petition of the Kyle Lumber Company sets up that the order transferring the case to Tennessee was improvidently made, and is void for want of primary jurisdiction in the said District Court for the Eastern District of Tennessee. In its amended petition the same averment is made, and further that the order of transfer was and is void for want of jurisdiction, and ought to be set aside and vacated. The contention of the petitioner, as we gather it, is that the action of the District Judge in Alabama in transferring the case to Tennessee was void for want of jurisdiction, because the Tennessee court had no jurisdiction to entertain the case in bankruptcy against the Southern Car & Foundry Company.
We think the two propositions are separate and entirely distinct. The district judge in Alabama might well find and determine that the Tennessee court was a court having jurisdiction .of the bankruptcy proceeding, and be in error in so determining, and yet he would have had jurisdiction to make the order. Jurisdiction to make an order is one thing, and the correctness of the order so made is an entirely different thing. By the very terms of the act, the district judge in Alabama had jurisdiction to transfer this case to the District Court in Tennessee, as another court having jurisdiction, and where it would be to the greatest convenience of the parties to have it proceed. Having jurisdiction to entertain the motion and make the order of transfer, the action of the court, even if the Tennessee court had no jurisdiction of the case, would not be void, but erroneous, and subject to review and correction on proper proceedings for that purpose.
We may assume that the judge of the District Court in Alabama, before making the order of transfer, considered the question of the jurisdiction of the Tennessee court. He could only transfer the case, by the express terms of the bankruptcy act, to another court “having jurisdiction,” and a necessary part of the action transferring the case was to find that the Tennessee court had jurisdic*693tion of the bankruptcy proceeding. Where a court reaches a conclusion like this from the record presented, and makes an order based thereon, the proper method of correcting this action, if erroneous, ‘ is not by motion to vacate or annul, but by review of the order itself in a proper way in the proper appellate court.
Corporations may be created in one state, and have places for transacting business in several other states. They may have a manufacturing plant, as in this instance, in states other than that of their incorporation. In such cases it may often become necessary to determine where the principal place of business of the corporations, outside of the state of their creation, is. Such an issue, when presented to the court for determination, becomes largely a question of fact — at least, a mixed question of law and fact; and, when decided and judgment entered, such judgment can no more be set aside and vacated because erroneous, than any other judgment involving law and fact.
The New Jersey court undoubtedly had jurisdiction of the case. The effect of the order there, transferring the proceedings to the Tennessee court, need not be considered, further than to say that it was before Judge Jones, and was an order of a court of competent jurisdiction, relinquishing jurisdiction to the Tennessee court, when he made the order in Alabama. The order of the New Jersey court set out in the petition presented in Alabama involved, so far as is now material, precisely the question for determination there; that is, whether the Tennessee court was a proper court to which a transfer of the bankruptcy proceedings should be made, and jurisdiction relinquished for the greatest convenience of the parties in interest. The action of the New Jersey court, therefore, was before the Alabama court as a decision of a court of undoubted jurisdiction upon the same question, and, indeed, upon the same subject-matter.
We do not mean, in what has been said, to express any opinion as to whether or not the District Court in Tennessee had jurisdiction of this proceeding in bankruptcy. We rest our decision upon the ground that the District Court in Alabama had jurisdiction to make the order of transfer, and that the correctness of its order transferring the case cannot be brought before this court for review by the method adopted here.
Considerable progress must have been made in the District Court of Tennessee in the administration of this estate in bankruptcy, in view of the time which has elapsed since the proceeding was instituted there, and the cases from the other courts transferred to that court. Two courts have found that it was for the greatest convenience of all the parties in interest that the estate should be administered there. It does not seem that it would be beneficial to any one that the further progress and complete administration of the estate in that court should be interfered with. There should, therefore, not be such interference unless the law absolutely requires it. We find no such legal requirement here.
The petition to revise the action of the District Court is denied.