Court Opinion

ID: 8639752
Source: CourtListenerOpinion
Date Created: 2022-11-24 19:51:14.332629+00
Date Added: 2024-06-11T16:56:03.711223
License: Public Domain

BOND, Circuit Judge.
This cause having been presented and argued on the last days of the term, we are allowed no time to file an opinion in writing, and will only state briefly the conclusions to which we have i come, and which we think are decisive of ■ the case:
First. We are of the opinion that the jurisdiction of the United States courts in bankruptcy is an exclusive jurisdiction.
Second. That although the state courts have jurisdiction, under their statutes, to settle and arrange the affairs and distribute the assets of an insolvent corporation, their jurisdiction is at an end the moment the corporation is adjudicated a bankrupt by the district court; and in this respect we can see no difference between the proceedings of a state court under a particular statute relating to insolvent corporations, and its proceedings under its general powers as a court of equity to wind up the affairs of an insolvent corporation.
Third. That we are of the opinion that the act of congress of February 13th, 1873, applies only to such orders relating to the ratable distribution or payment of dividends as the state courts may have passed prior to the commencement of proceeding in the district courts, or prior to its adjudication in bankruptcy, for the ratable distribution or payment of dividends.
It seems to the court plain, also, that no question of comity between courts can arise in this case, for, aside from the numerous decisions quoted in argument, determining the exclusive jurisdiction of the United States court in bankruptcy, the act of February 13th, 1S73, renders the matter certain; for congress would never have directed the bankrupt court to obey any orders passed by a state court prior to its decree in bankruptcy, if the bankrupt court could take no jurisdiction of an insolvent corporation’s affairs, after bill filed in a state court, to wind up their affairs. In this case there has been no order of a state court respecting payment or distribution. There has been no receiver appointed to take possession of the effects of the insolvent corporation. The court has required the officers of the company to remain in possession and make no transfer. They have not so made transfer; the transfer was by operation of law, upon the application for the benefit of the provisions of the bankrupt act, to the district court. We do not think a state court can, by any process, prevent a party from applying to the district court for the benefit of the provisions of the bankrupt law. We think the objection that the injunction against Watson, a creditor of the bankrupt, was improvidently issued, because he was not a party to the petition in bankruptcy, is not well -taken. All the creditors of a bank*429rupt are parties to the proceedings, especially so far as an order for the preservation of the assets is concerned. For these and other reasons, which we have not time to note, much less to enlarge upon, this petition must be dismissed.
[For another report of this proceeding, see Case No. 2,735.)