Court Opinion

ID: 9653603
Source: CourtListenerOpinion
Date Created: 2023-08-23 17:49:41.799244+00
Date Added: 2024-06-11T18:13:00.313804
License: Public Domain

DENMAN, Circuit Judge.
I concur. The appellee seeks the adjudication of contract debts. While the debts are property of the appellee, their situs is in the Washington District of the lower court, where the appellee resides. State Tax on Foreign-Held Bonds, 15 Wall. 300, 320, 21 L.Ed. 179. Hence the phrase of 77B “wherever located” cannot be interpreted to give extraterritoriality to the property in the debt.
Whatever right to compel the persons claimed to be owing the debt to appear in the 77B proceeding must arise from one of two sources. (1) One is that portion of subdivision (a) of 77B concerning the power of the court which “shall have and may exercise all the powers, not inconsistent with this section, which a Federal court would have had it appointed a receiver in equity of the property of the debtor by reason of its inability to pay its debts as they mature.”
This refers to what is known as an equity receivership as distinguished from a receivership . in foreclosure proceedings. Duparquet Huot & Moneuse Co. v. Evans, 297 U.S. 216, 56 S.Ct. 412, 80 L.Ed. 591. In such an equity receivership the court has the power to compel debtors of the corporation in receivership to litigate the debts by ancillary proceedings in the receivership. White v. Ewing, 159 U.S. 36, 38, 15 S.Ct. 1018, 40 L.Ed. 67; Riehle v. Margolies, 279 U.S. 218, 223, 49 S.Ct. 310, 312, 73 L.Ed. 669. This right, however, is confined to debtors who are in the district in which the proceeding is pending, unless they voluntarily appear in the proceeding. It does not extend the process of the District Court beyond the district. Lion Bonding Co. v. Karatz, 262 U. S. 77, 87, 43 S.Ct. 480, 483, 67 L.Ed. 871.
(2) The other source from which the power to make valid service of its process beyond the district in suits purely in *370personam and not for the protection of property extraterritorially located, is subdivision (o) of 77B as follows: “In proceedings under this section and consistent with the provisions thereof, the jurisdiction and powers of the court, the duties of the debtor and the rights and liabilities of creditors, and of all persons with respect to the debtor and its. property, shall be the same as if a voluntary petition for adjudication had been filed and a decree of adjudication had been entered on the day when the debtor’s petition or answer was approved.”
In the ordinary voluntary proceeding in bankruptcy the District Court has not the power to bring into the bankruptcy proceeding the debtor to the bankrupt estate, whether he resides within or without the district in which the bankruptcy proceeding is pending. 11 U.S.C.A. § 46(b); Kelley v. Gill, 245 U.S. 116, 119, 38 S.Ct. 38, 62 L.Ed. 185. Certainly here is no warrant for the extraterritorial service of the court’s process in suits at law purely in personam.