106 F. 873 | W.D. Ark. | 1901
On the 2d day of- February, 1901, a petition in bankruptcy was filed against John D. Bender, alleging, in substance, that .John D. Bender is insolvent, and that within four months next preceding the date of this petition the said Bender'committed an act of bankruptcy, in that he heretofore, to wit, on the 8th day of October, 1900, caused to be placed upon record in Sebastian county, Ark., mortgages given by him a short time previous thereto, securing certain of his creditors, and giving them a fraudulent preference over other creditors, he being at the time insolvent, as he and said creditors well knew. A proper service was had upon this petition. Two other petitions had also been filed prior thereto, and service had thereupon. On the 12th of March, no defense having been interposed, the petitions were consolidated, and John D. Bender adjudicated a bankrupt. On the 12th of March an affidavit was filed by Ira D. Oglesby, attorney for the petitioning creditors, alleging, in substance, that he had filed a bond for the seizure of said bankrupt’s personal property, and that said bankrupt had committed an act of bankruptcy by fraudulently disposing of his property, and was neglecting his property so that the same was liable to waste and deterioration in value, and to he improperly disposed of, and praying the court for a warrant of seizure. An order of seizure was, on the same day, issued, directing the marshal of said district to seize and take possession of all the estate, real and personal, of said John D. Bender, and all his deeds, hooks of account, and papers, and to hold and keep the same safely, subject to the further order of the court. By virtue of this writ, the marshal went to the saloon of the said bankrupt, found the defendant there in actual control of his saloon, and served the process upon him. Said Bender thereupon voluntarily gave him the keys, and surrendered the property, without protest, or without making known to the marshal that there were any claims whatever upon it, or without stating to him that he was in possession of the property as the agent of the said D. J. Young. The marshal thereupon took possession of the property, and is still in possession thereof as the property of the bankrupt. On the 15th of
Tin; question now arises whether or not the property, not having been forcibly taken from Render, but having been, without protest, surrendered by Render to the marshal as his assets, on a summary motion Young should have the property returned to him. It is urged by the counsel for Young that the principles decided in Bardes v. Bank, 178 U. S. 524, 20 Sup. Ct. 1000, 44 L. Ed. 1175, are decisive of the question at issue. I have concluded otherwise. In my opinion, that case has no beating whatever upon the controversy at issue. The question presented was entirely different. In that case a suit was brought in the district court of the United Htates for the Northern district of Iowa, sitting in bankruptcy, by Fred Bardes, a citizen of Iowa, as trustee in bankruptcy of the estate of Frank T. Walker, against the First National Bank of Iowa, a, corporation created and existing under the act of congress relating to national banks, and against citizens of Iowa and South Dakota, to sot aside a conveyance of goods alleged to have been made by the bankrupt within four months before the institution of the proceedings in bankruptcy to ilie defendants, and to compel them to account for the goods, or their proceeds, on the ground that the conveyance was in fraud of the provisions of the bankrupt act of July, 1898, and in fraud of the creditors of the bankrupt. The question was simply whether the district court of the United States sitting in bankruptcy had jurisdiction of such a suit. It was answered in the negative. It being the first case in which the court had been called upon to construe the provisions of the bankrupt: law with relation to the’ jurisdiction of the district courts sitting in bankruptcy, a somewhat elaborate opinion, discussing the various sections of the bankrupt law, was delivered;, but there was really no other question before the court except the one I have stated. That question turned upon section 23 of the bankrupt act, which is in the following language:
“Sec. 23. Jurisdiction of United States and State Courts. — (a) The United States 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 maimer and to the same extent only as though bankruptcy proceedings had not been instituted, and such controversies had been between tlie 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.”
It will be seen that paragraph “a” of section 23 relates to the jurisdiction of the circuit court of the United Slates in suits “'between Trustees as such and adverse claimants, concerning jiroperty acquired or claimed by the trustee.” The words “acquired or claimed” the court regards us synonymous, both alluding to property adversely, held by third parties, but which, by the Ierras of the bankrupt act, became vested in the trustee upon his qualification as such. Paragraph “b,” as the supreme court held, precludes the district courts of the United States sitting in bankruptcy from taking jurisdiction of
“That the courts of bankruptcy as herein defined » ⅜ * are hereby invested * * * with such jurisdiction at law and in equity as will 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 * * * (3) appoint receivers or the marshals upon application of parties in interest, in case the court shall find it absolutely necessary for the preservation of estates to take charge of the property of bankrupts after the filing of the petition and until it is dismissed, or the trustee is qualified.”
And section 69 provides as follows:
“The judge may, upon satisfactory proof, by affidavit, that a bankrupt against whom an involuntary petition has been filed and is pending, has committed an act of bankruptcy, or has neglected, or is neglecting, or is about to so neglect his property, that it has thereby deteriorated or is thereby deteriorating, or is about thereby to deteriorate in value, issue a warrant to the marshal to seize and hold it, subject to further orders.”
The precise action provided for by the portions of the bankrupt law above quoted is the very action that was taken in this'case, and the supreme court of the United States, in Bardes v. Bank, supra, say:
“The powers conferred on the courts of bankruptcy by clause 3, of section 2, and by section 69, after the filing of the petition in bankruptcy, and in case it is necessary for the preservation of the property of the bankrupt to authorize receivers or the marshals to take charge of it until a trustee is appointed, can hardly be considered as authorizing a forcible seizure of such property in possession of an adverse claimant, and have no bearing upon the question in what courts the trustee may sue him.”
While that precise question was not before the court in that case, and possibly the statement should be regarded as obiter, yet it is highly persuasive,' and in this case entirely so, of what is the proper construction of the provisions above quoted. In the case at bar, however, there was no forcible seizure of the property. The seizure was without force, without protest, without even the suggestion that there was a mortgage upon the property, or that it was claimed by any other person. It was found in the possession of the bankrupt.