| E.D. Wis. | Dec 10, 1898
The petition by five creditors states a prima fació cause within the provisions of the recent act of congress for an adjudication of involuntary bankruptcy against the Bruss-Ritter Company as an insolvent: corporation of Wisconsin. The petition was tiled November 4,1898, mid on November 11, 1898, upon petition showing cause therefor, a. receiver of the effects of said corporation was appointed by order of this court. The motion to dismiss is founded solely upon the contention that tlie bankruptcy act of July 1, 1898, having postponed tlie tiling of any petition for involuntary bankruptcy until November 1,1898, was inoperative in the ease at bar, because an action was commenced in tbe superior court of Milwaukee county on October 27, 1898, founded upon alleged insolvency and fraud, to take possession of tbe assets of the corporation for the same purposes involved in the bankruptcy proceedings, pursuant to provisions of the Wisconsin statute, which action was pending when this petition was filed,
1. The intention of the act to have general force and effect from the date of passage is expressly declared in the concluding paragraphs a and b, as follows:
“a. This act shall go into full force and effect upon its passage: provided, however, that no petition for voluntary bankruptcy shall be filed within one month of the passage thereof, and no petition for involuntary bankruptcy shall be filed within four months of the passage thereof.
“b. Proceedings commenced under state insolvency laws before the passage of this act shall not be affected by it.”
The date of passage is also referred to in defining acts of bankruptcy in section 67, and there is no provision which gives countenance to, or even suggests, the legislative intent to postpone the force of the enactment, unless the postponement of time for filing petitions must be taken as conclusive of such purpose. Decisions interpreting the bankruptcy act of 1867 are cited as supporting the latter view. Judd v. Ives, 4 Metc. (Mass.) 401; Day v. Bardwell, 97 Mass. 246" court="Mass." date_filed="1867-10-15" href="https://app.midpage.ai/document/day-v-bardwell-6415034?utm_source=webapp" opinion_id="6415034">97 Mass. 246; Lothrop v. Foundry Co., 128 Mass. 123; Martin v. Berry, 37 Cal. 208" court="Cal." date_filed="1869-07-01" href="https://app.midpage.ai/document/martin-v-berry-5436862?utm_source=webapp" opinion_id="5436862">37 Cal. 208; and cases noted in last edition of Bump, Bankr. 98. These authorities are clearly inapplicable, as there is no parallel in the terms of that act with those here in question. Section 50 of the act of 1867 provided:
“That this act shall commence and take effect, as to the appointment of officers created thereby and the promulgation of rules and general orders, from and after the date of its approval: provided, that no petition or other proceeding under this act shall be filed, received or commenced before the first day of June,” 1867.
The terms were not clear in stating the time when the act should have full force, but were quite clear in naming alone for its immediate effect the preliminary appointments, rules, and orders, and then providing that no proceedings should be instituted before June 1st. Courts differed in fixing the time of its going into general effect, and it is unnecessary to discuss here the correctness of one view or the other. That which was upheld in the cases cited, namely, that it was not operative to suspend state provisions until June 1st, may well be assumed, for the purposes of this motion, as the sound interpretation. But there is
“Those various provisions ¡unroofing the rights and conduct of debtors and creditors are different from those previously existing in most of the states, and perhaps different from those found in the laws of any state; and they supersede all conflicting provisions. The only limitation upon the full and complete operation of the act upon its passage is that the right to begin proceedings is postponed one month in the ease of voluntary petitions and four months in the case of Involuntary petitions. Whenever the proceedings are commenced, Hie conduct oí the parties after the passage of the act is to be tested by its renuirements. The only saving clause affecting the jurisdiction of suite courts provides, for cases commenced in those courts before the passage of the act. The plain implication is that proceedings commenced in the state courts after the passage of the act are unauthorized. Tills is in accordance with the earlier language giving the statute full force and effect from the time of its passage, except that the filing of petitions is to be postponed for a short time. We aie of opinion that the language was chosen to make clear the purpose of congress (hat the new system of bankruptcy should supersede all state laws in regard to insolvency from the date of the passage of the statute.”
2. With the purpose of congress thus established to have the law take effect from July 1st, the proviso to postpone the filing of petitions thereunder, in volmffary cases one month and in involuntary cases four months, cannot operate to nullify that purpose for the reasonable jneparatory lime so direcied for commencing the proceedings. It is probably true, as counsel argues, (hat the authority granted to congress by the constitution to establish uniform laws on the subject of bank-rujitcy cannot be exercised by the mere abolition or suspension of state insolvency provisions without furnishing a system of remedies in their place. Bui such system is clearly provided by this act, and the tact that, petitions may not be received before the lime fixed is a mere regulation of procedure, — the time and manner of commencing actions being always subject lo regulation, — and in no sense can it be held that the remedies of suitors, which are presumably adequate and complete, are thereby impaired. There is no vested right in suitors to have the couris open at all times, either to entertain their actions or afford hearings without delay, and it is sufficient for the preservation of all rights