Court Opinion

ID: 3579714
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:31:02.172527+00
Date Added: 2024-06-11T07:41:13.810300
License: Public Domain

This court in Cook v. Whipple (55 N.Y., 150), andThompson v. Sweet (73 N.Y., 622), held that State courts under the bankrupt act of 1867 had jurisdiction of actions brought by assignees in bankruptcy to enforce rights arising under the bankrupt act, to the property of the bankrupt, transferred in fraud of the act, or with intent to give a fraudulent preference contrary to its provisions. The same doctrine was declared by the United States Supreme Court inClaflin v. Houseman (93 U.S. 130), which is a final and controlling decision upon the point. In Kidder v. Horribin
(72 N.Y., 159), which was an action by an assignee in bankruptcy, brought after the revision of the United States Statutes in 1874, to recover a debt due to the bankrupt, it was held, that State courts are not deprived of jurisdiction of an action by an assignee in bankruptcy, to recover the assets of the bankrupt by section 711, of the revision. The reasons for this conclusion are fully stated in the opinion in that case, and the decision proceeded upon the ground that a suit brought upon a cause of action created by the bankrupt act, or existing independently of that act, was not a matter or proceeding in bankruptcy, within the meaning of that section.
This action is brought to set aside, and to have declared void, a chattel mortgage executed by the bankrupt to the defendant Patterson, on the ground that it constituted a fraudulent preference within the bankrupt act, and to compel *Page 158 
an accounting by the mortgagee in respect to the property received by him under the mortgagee. The reasoning in the case ofKidder v. Horrobin, applies in this case, and we are of opinion, that the jurisdiction of the State court in an action like this, which confessedly existed prior to 1874, has not been taken away, by the Revised Statutes.
The order of the General Term should therefore be affirmed, and judgment absolute ordered for the plaintiff on the stipulation, with costs.
All concur.
Order affirmed, and judgment accordingly.