Court Opinion

ID: 8865193
Source: CourtListenerOpinion
Date Created: 2022-11-26 18:02:18.888758+00
Date Added: 2024-06-11T17:05:58.292692
License: Public Domain

PARLANGE, District Judge
(dissenting). The matter which the record in this case presents for decision is whether the creditors of the *786bankrupt could proceed summarily in the court of bankruptcy to compel the purchaser at the sale of the bankrupt’s property by the assignee to deliver the property or its proceeds to the court of bankruptcy. Incidentally, the right of the purchaser to appeal to this court is contested. I concur fully in the conclusion reached by this court on the matters just stated, and which are, in my opinion, the only matters before this court for decision. The able and exhaustive opinion of the court shows that the court of bankruptcy was devoid of jurisdiction when proceeding against the purchaser as it did, and that the state court is the proper forum to settle the dispute between the purchaser at the assignee’s sale and the bankrupt’s creditors. The opinion of this court also shows that the purchaser, in coming to this court, mistook his remedy. It is clear that he should have proceeded by petition, and not by appeal. I agree fully that the indulgence of this court in treating, of its own motion, the appeal as a petition, is just and proper for the reasons stated in the court’s opinion. But I am constrained to dissent as to the intimation that the court of bankruptcy could not have taken possession of the bankrupt’s estate prior to the sale, and while it was in the hands of the assignee; and I must further dissent from the direction to the court of bankruptcy to proceed to decree damages, counsel fees, and costs against the creditors. The question whether a court of bankruptcy has power to take the bankrupt’s property from his assignee is not before this court. The circuit courts of appeals for the Second and Eighth circuits have, without a dissent, held that the court of bankruptcy may take the property from the assignee,1 and both courts referred, in their own able opinions, to the equally able opinion of Judge Brown, in Re Gutwillig, 90 Fed. 475. The will of congress, in matters of bankruptcy, is paramount. On such a subject a state statute could not prevail, and it is difficult to comprehend how an individual may defeat, or even impede, the will of congress. The assignee is the bankrupt’s agent. I do not see how the court of bankruptcy is deprived of power over the bankrupt’s property, because it is found in the hands of the bankrupt’s agent. But, be this as it may, it seems to me that the case before the court does not call in any manner for an opinion on the point, and that it would be wiser to defer a determination concerning it until it should come up as a contested issue. ?
It also seems to me that the court of bankruptcy should not be directed to proceed to impose damages, counsel fees, and costs on the creditors. There is no such demand before us, either in the pleadings or in the briefs. Litigants are usually careful to ask for all that they believe themselves to be entitled to, or that there is any probability of their-recovering. They often ask too much, and very seldom, if ever, ask too little. While I agree fully, as has been already stated, that a proper indulgence has been shown the appellant in view of the inevitable uncertainty attendant upon the putting into operation of a new and complex law, I believe that some indulgence should also be shown the creditors, or, at least, this court should not be so rigorous towards them as to impose upon them damages, etc., which have not been asked for.
*787I do not, understand this court to hold that the creditors cannot recover the bankrupt’s property or its proceeds from the purchaser. This court bolds that such recovery cannot be had by summary proceeding in the court of bankruptcy. It is evideui that this court would not undertake to say what the state court should decide if a suit -is brought there to recover the property or its proceeds from the purchaser. It may he that the state court will take the view that the sale is voidable.
Section (¡9 and section Be, referred to in the opinion of the court, both relate to bonds given to secure an alleged bankrupt against damages which may result to him from the seizure of his property. Neither section is intended to secure a person sitúa fed as is the purchaser in this case. No bond was given under either section. The bankrupt is not complaining of damages to his property. If bonds had been given under either of the sections just mentioned, he alone could have availed himself of them.
Furthermore, I am far from being certain that the court of bankruptcy has jurisdiction to try the question of damages. As the court of bankruptcy has no jurisdiction to entertain the proceeding of the-creditors, it is difficult to see how that court has jurisdiction to indict damages in that same matter. The' supreme court has said that a court which has no jurisdiction of a case cannot even award costs, or order execution for them lo issue. Mayor v. Cooper, 6 Wall. 247; Smith v. Whitney, 116 U. S. 175, 6 Sup. Ct. 570; Elk v. Wilkins, 112 U. S. 98, 5 Sup. Ct. 41. Under the very views so ably expressed by this court as to the restricted powers of the court of bankruptcy, I have grave doubts, to say the least, with regard t;o the power of the court of bankruptcy to cause to be framed and to determine an issue between the creditors and the purchaser as to the damages.