аfter making the foregoing statement, delivered the opinion of the court.
In the view we take of the case, the petition for certiоrari sufficiently discloses the facts. If the proceeding in the District Court was a proceeding in bankruptcy and not an independent suit, no aрpeal lay to the Circuit Court of Appeals, and the jurisdiction of that court was confined to revision in matter of law “on due notice аnd petition” under clause b of section 24.
The distinction between steps in bankruptcy proceedings proper and controversies arising out of the sеttlement of the estates of bankrupts is recognized in sections 23, 24 and 25 of the present act, and the provisions as to revision in matter of lаw and appeals were framed and must be construed in view of that distinction.
Holden
v.
Stratton,
This distinction existed under the prior bankruptcy law,
*289
arid the then decisions in respect of a proceeding in bankruptcy and an independent suit are applicable. It was settled that the bankruptcy court was without jurisdiction to determine adverse claims to property, not in the possession of the assignee in bankruptcy, by summary proceedings, whether absolute title or only a lien was asserted.
Smith
v.
Mason,
The present act was plainly framed in recognition of the principle of these cases. Subdivision 7 of section 2 confers jurisdiсtion on the District Courts as courts of bankruptcy, to “cause the estates of bankrupts to be collected, reduced to money and distributеd, and determine controversies in relation thereto, except as herein otherwise provided;” and we held in
Bardes
v.
Bank,
• Petitioners asserted .this exprеss statutory limitation on jurisdiction and objected that the District Court could not proceed, but their objections were overruled. That they then did nоt abandon their claims did not amount to a waiver of their objections or to a consent to an exercise of jurisdiction against which thеy protested.
Louisville Trust Company
v.
Comingor,
“This brought the controversy within the ruling in Bardes v. Bank,178 U. S. 524 , and the questions attempted to be litigated before the referee and in the District Court as to the allowance of the two amounts could only be raised in the District Court by consent, and then only by plenary suit. If thе jurisdiction of the District Court was not consented to, then the state court, under the circumstances of this' case, was the proper forum, and the matters in dispute were to be disposed of there. ...
“The proceeding was purely summary. . . .
“The question is whether the District Court had jurisdiction to finally adjudicate the merits in this proceeding. . . .
“In many cases jurisdiction may depend on the ascertainment of facts involving the merits, and in that sense the court exercises jurisdiction in disрosing of the preliminary inquiry, although the result may be that it finds that it cannot go farther. And where in a case like that before us, the court erroneously retains jurisdiction to adjudicate the merits, its action can be corrected on review.
“We are of opinion that even if Comingor сould have consented to be pursued in this manner, he did not so consent. He was ruled to show cause, and the cause he showed defeated jurisdiction over the subject matter, that is jurisdiction to proceed summarily. He did not come in voluntarily, but in obedience to peremptоry orders, and although he participated in the proceedings before .the referee, he had pleaded hi claims in the outset, and he made his formal protest to the exercise of jurisdiction before the final order was entered.”
And since, as elaborately expounded in
Bardes
v.
Bank,
the
*291
District Court had no jurisdiction of an independent suit, it follows that the proceeding in that court could not be held-to have been such, as, indeed, in form, on reason, and on authority, it manifestly was not. But, nevertheless, the District Court had jurisdiction to determine whether it I could or could not proceed further.
Louisville Trust Company
v.
Comingor,
In the present casе, the receiver filed a petition reciting that he had taken possession of the property. This was denied. The District Court adjudged that the receiver had not at the time of filing its petition the right of possession, and that the National Storage Company, at that date, and also аt the time of the filing of the petition in bankruptcy, was entitled to possession and had possession. Nevertheless it retained jurisdiction and decreed payment to petitioners out of the proceeds of the sale.
The sale in the circumstances did not change the situation. The proceeds stood in place of the property and the order returning the proceeds was equivalent to, an order returning the property. This it was proper to do, whether the court had held that it lacked jurisdiction, or ruled in favor of petitioners on the merits. The Court of Appeals sustained the jurisdiction of the District Court upon the ground that it had acquired a fund and had jurisdiction to dispose of it, but we do not think that a court of bankruptcy can create a jurisdiction forbidden by statute. And in any view, the proceeding was a proceeding in bankruptcy. Being such, an appeal from the decree of the District Court under section 25a did not lie, and parties aggrieved could only invoke the supervisory power under section 24b.
Holden
v.
Stratton,
But this was an appeal and not a petition for revision, and hence it was that the Circuit Court of Apрeals reviewed the questions of fact and declined to accept the findings of the referee and the District Court. In the exercise of supervisory *292 power, it would have been confined to matter of law. We are clear that an appeal would not lie, and the dеcrees of the Circuit Court of Appeals must be reversed, with a direction to dismiss the appeals and remand the cause to the District Court for further proceedings in conformity with this opinion.
In our view the District Court should have declined upon its findings to retain jurisdiction, and in that event the deсrees for the return of the money should have been without prejudice to the right of respondents to litigate in a proper court, which modification we direct to be made.
Ordered accordingly.