153 F. 945 | 5th Cir. | 1907
having made the foregoing statement of the case, delivered the opinion of the court.
I. The sole question to be decided is whether or not the District Court had jurisdiction of the case presented by the petition of the trustee. The question must, of course, be answered by an examination of the relevant parts of the bankruptcy act of 1898. Act July 1, 3898, c. 543, 30 Stat. 544 [U. S. Comp. St. 1901, p. 3418]. The second section of the act makes tlie District Courts of the United States courts of bankruptcy and confers on them jurisdiction. Clauses 3 and 7 of the section are relied on as conferring jurisdiction in this case.
“Sec. 23. (a) The United States Circuit Courts shall have jurisdiction of all controversies at. law and in equity, as distinguished from proceedings in bankruptcy, between trustees as such and adverse claimants concerning the property acquired or claimed by the trustees, in the same manner and to the same extent only as though bankruptcy proceedings had not been instituted and such controversies had been between the bankrupts and such adverse claimants.
“(b) Suits by the trustee shall only be brought or prosecuted in the courts where the bankrupt, whose estate is being administered by such trustee, might have brought or prosecuted them if proceedings in bankruptcy had not been instituted, unless by consent of the proposed defendant, except suits for the recovery of property under section sixty, subdivision b, Midi section sixty-seven, subdivision e.” 30 Stat. 557, c. 541 [U. S. Comp. St. 1901, p. 3431], amended by Act Feb. 5, 1903, c. 487, § 8, 32 Stat. 797 [U. S. Comp. St. Supp. 1905, p. 686].
Disregarding the amendment for the present, this section, as originally written, confers jurisdiction on the Circuit, not on the District, Courts of all controversies at law and in equity, as distinguished from proceedings in bankruptcy, between trustees and adverse claimants of the bankrupt’s property. But this jurisdiction is conferred to the same extent only as the bankruptcy proceedings had not been instituted and such controversies had been between the bankrupt and the adverse claimant. The trustee can sue, in such cases, only in the courts where the bankrupt could have sued if proceedings in bankruptcy had not been instituted. The petitioner who sued in the District Court in the case' at bar sued as the trustee in bankruptcy of a Massachusetts corporation. The parts of the act quoted, if we construe the petition as presenting a controversy at law or in equity, as distinguished from a proceeding in bankruptcy, confers jurisdiction on such United States Circuit Courts and state court as would have had jurisdiction of .such a suit by the corporation if there had been no bankruptcy proceeding. But the statute does not confer jurisdiction in such cases on a United States District Court, not even when it is the court of adjudication. Bardes v. Hawarden Bank, 178 U. S. 524, 20 Sup. Ct. 1000, 44 L. Ed. 1175.
The opinion of the Supreme Court in Bardes-v. Hawarden Bank, construing the act as it stood before the amendment, seems to us conclusive of the proposition that the court of bankruptcy did not have jurisdiction of the case made by the petition, if the petition presents a controversy at law or in equity within the meaning of section 23 of the act.
2. The only other part of the act that might be referred to in this connection is section 70, subd. “e.” We quote it here, placing the part of it added by the amendment of 1903 in italics:
“(e) The trustee may avoid any transfer by the bankrupt of Ills property which any creditor of such bankrupt might have avoided, and may recover the property so transferred, or its value, from the person to whom it was transferred, unless he was a bona fide holder for value prior to the date of the adjudication. Such property may be recovered or its value collected from whoever may have received it, except a bona fide bolder for value. For the, purpose of such recovery any court of bankruptcy, as hereinbefore defined, and any state court which would have had. jurisdiction if bankruptcy had, not intervened, shall have concurrenl jurisdiction.” 30 Stat. 500, c. 511 [U. S. Comp. St. 1901, p. 3452], amended by Vet Feb. 5, 1903, c. 487, § 10, 32 Stat. 800 (U. S. Comp. St. Supp. 1905. p. 090].
Such jurisdiction as is conferred by this language relates to suits by the trustee to “avoid any transfer by the bankrupt of his property which any creditor of such bankrupt might have avoided.” The petition of the trustee in the instant case does not seek to avoid a transfer. It does not allege that the deed to Hull was made under circumstances that made it voidable at the suit of his creditors. In fact, it is.not alleged in the petition that the corporation owed any debts at the date of its transfer to Hull. No charge of fraud against creditors is made. On the contrary, it is alleged that the deed to Hull was based on a large consideration, not less than $25,000. A careful consideration o[ the trustee’s petition convinces us that it was not intended as a suit under section 70c, and that subdivision has not been cited by learned counsel for the trustee as conferring jurisdiction.
But there is another reason why section 70e cannot be relied on as
Even if the trustee’s petition was construed as presenting a case under section 70, subd. “e,” the court of bankruptcy would not have jurisdiction without the consent of-the defendant.
3. But it may be that the trustee’s petition is subject to another construction. It is alleged that the bankrupt was, at the date of the bánkruptcy proceedings, in possession of the real estate in question, and that the petitioner by operation of law became vested with the. title to all the property belonging to the bankrupt corporation, and came into legal possession thereof; and that the defendant, Joseph Hull, after the petitioner’s possession and right accrued, took wrongful possession of the property and refused to surrender it. If the' petition be construed to be a summary proceeding to obtain the possession of the property — a “proceeding- in ’bankruptcy” — and not a controversy at law or in equity, the question is: Would the District Court then have jurisdiction? Many cases have been cited that bear more or less on this question, and it may be conceded that, placing such construction on the trustee’s petition, the District Court of the United States for the Northern District of Florida would have had jurisdiction, if it had been the court of adjudication. But the petition shows that the corporation was adjudicated a bankrupt by a United States District Court in the state of Massachusetts, which has ' charge of the bankrupt’s estate and of its collection, distribution, and settlement. Cases cited by counsel that discuss the jurisdiction of
Courts of bankruptcy are created by statute, and they have no jurisdiction except that conferred by statute, either expressly or by implication. The second section of the bankruptcy act of 1898 makes the District Courts courts of bankruptcy, and creates their jurisdiction. There are 19 subdivisions of the section enumerating the powers conferred. The subdivisions 3 and 7, especially relied on by the learned counsel, have already been quoted. The section vests courts of bankruptcy with the jurisdiction described in its 19 subdivisions “within their respective territorial limits as now established, or as may hereafter be changed.” There are many cases construing the present statute, so well known that it is useless to cite them, holding that the court which adjudges a person a bankrupt has the power and jurisdiction in summary proceedings to take possession by receivers or marshals of the property of the bankrupt situate and being within the territorial jurisdiction of the court. The circumstances under which this power will be exercised or refused by the court of adjudication need not be discussed here. The question here relates, not to the jurisdiction of a bankruptcy court which has adjudicated a person a bankrupt, but to the jurisdiction of a court of another district which is called on to exercise summary jurisdiction in aid of another court of bankruptcy which made the adjudication and has charge of the bankrupt’s estate.
We find no provision of the act which expressly or impliedly makes provision for summary proceedings or for auxiliary or ancillary proceedings in another court of bankruptcy in aid.of the bankruptcy court that made the adjudication and has charge of the bankrupt’s estate. Congress, of course, could have adopted a scheme by which every District Court would be charged with the collection or administration of the bankrupt’s property in aid of or ancillary to the jurisdiction of the court of adjudication, but we find in the act no hint of such intention. On the contrary, the act limits the jurisdiction of the bankruptcy courts, including even the one of adjudication, by providing that suits by the trustee — with the exceptions we have noted — shall onfy be brought or prosecuted in the courts where the bankrupt whose estate is being administered by such trustee might have brought or prosecuted them if proceedings in bankruptcy had not been instituted.
We are of opinion that the District Court erred in overruling the plea to the jurisdiction.
The trustee is vested by the act with all the rights and title of the bankrupt, as well as with the rights of the bankrupt’s creditors, and, when he seeks to enforce rights or to recover property in another district outside of the territorial jurisdiction of the court which appointed him, he stands in the position of those whose rights he has
The petition for revision is allowed, the decree of the court of bankruptcy is reversed, and the petition of the trustee is dismissed.