232 F. 815 | 5th Cir. | 1916
(after stating the facts as above). The question to be decided is whether the trial court had jurisdiction to adjudge LI. R. Finn a bankrupt. Finn and the two creditors, Silsbe and Clarke, interposed objections, verified by affidavit, to the jurisdiction as follows:
“That the said Finn did not have his principal place of business and did not reside and did not have his domicile and did not transact any business whatever within the Southern district of Florida for a period of more than sir months next preceding the filing of said petition. That his residence and domicile during said time were in the city of New York, state of New York.”
The objections of the two creditors were filed prior to the order of adjudication, and those of the alleged bankrupt subsequent thereto. They were all overruled, without inquiry on the part of the court touching the facts. To determine whether the action of the court was erroneous, resort must be had to the Bankruptcy Act. That part of section 2 of the act, having application to the question under consideration, provides as follows:
“That the courts of bankruptcy as hereinbefore defined, viz., the District Courts of the United States in the several states, the Supreme Court of the District of Columbia, the District Courts of the several territories, and the United States Courts in the Indian Territory and the District of Alaska, are hereby made courts of bankruptcy, and are hereby invested, within their respective territorial limits, as now established, or as they may be hereafter changed, with such jurisdiction at law and in equity as w'ill enable them to exercise original jurisdiction in bankruptcy proceedings, in vacation in chambers and during their respective terms, as they are now or may be hereafter held, to (1) adjudge persons bankrupt who have had their principal place of business, resided, or had their domicile within their respective territorial jurisdictions for the preceding six months, or the greater portion thereof. * * * ”
By the terms of the act it appears that District Courts are invested with jurisdiction to adjudge persons bankrupt (1) who have had their principal place of business, or (2) who have resided, or (3) who have had their domicile within their respective territorial jurisdictions for the period of six months, or the greater portion thereof. The grant of jurisdiction is therefore not general in the sense that persons may he adjudged bankrupt, regardless of the place of their residence, etc. But the jurisdiction of the court over the estate of the bankrupt, the subject-matter of the proceeding, is confined by the terms of the act
But let us go a step further and suppose that a suit between citizens of different states is based upon a note for $1,800 and the defendant appears and consents to' the jurisdiction. Has the court the power or jurisdiction to proceed in the case? It certainly has general jurisdiction over the subject-matter, and in the case supposed jurisdiction of the person. But it has not jurisdiction over the subject-matter in the particular case simply for the reason that, by the terms of the statute, the matter in controversy, in order to confer jurisdiction, must exceed $3,000. And in such a case the court sua sponte, and over the protest of the parties, will take notice of the want of jurisdiction and dismiss the suit. Why? Because the law is thus written. And a like rule should apply and for a similar reason to a proceeding of this nature arising under section 2 of the Bankruptcy Act. The fact, therefore, that Finn first appeared in the present case by filing demurrers to the petition of the creditors, going to the merits of the controversy, without objecting to the jurisdiction, would not preclude him from timely asserting thereafter the want of jurisdiction. Indeed, under section 37 of the Judicial Code, the question of jurisdiction proper, as contra-distinguished from that of mere personal privilege, may be raised at any time during the progress of the litigation? It was raised in the present case by Finn, the alleged bankrupt, within a month after the order of adjudication and before any further proceedings were had, and by the two creditors, Silsbe and Clarke, prior to the order adjudging Finn a bankrupt. Hence it is evident there was no laches on the part either of the alleged bankrupt or of the two creditors.
We conclude, therefore, that if, in an appropriate proceeding instituted by the trial court, it be made to appear that the allegations, contained in the verified motions of Finn, Silsbe, and Clarke, are true, the court should proceed no further, except to dismiss the proceeding for want of jurisdiction. So far as we are advised the precise question here considered has not been passed upon by the Supreme Court, but the views herein expressed find support in the following authorities: In re Garneau, 127 Fed. 677, 62 C. C. A. 403; In re Plotke, 104 Fed.
It follows from the foregoing that the court was in error in overruling, or striking the motions calling in question its jurisdiction. The orders sought to be revised should therefore be reversed, and the causes remanded for further proceedings not inconsistent with the views above expressed. And it is so ordered.