14 F. Cas. 380 | U.S. Circuit Court for the District of Eastern New York | 1869
It is claimed, that the district court had no jurisdiction over the foreclosure suit in the supreme court; that it was error to enjoin the proceedings therein; and that, if the court had jurisdiction, the proceeding to restrain the suit, and to adjudicate on the rights of the parties, should have been taken by bill, and not by an informal and summary proceeding.
1. 1 am inclined to think that the district court had jurisdiction in the case, under the first section of the bankruptcy act, which provides, that the jurisdiction thereby conferred shall extend to all controversies between the bankrupt and any creditor or creditors, and, among other things, “to the ascertainment and liquidation of the liens, and oilier specific claims thereon,” that is, on the assets¡ and, “to the adjustment of the various priorities and conflicting interests of all parties.” In the present ease, the proceedings were instituted in the supreme court of the state after the Kerosene Oil Company had been declared a bankrupt, and an assignment of its assets had been made. Whether or not it would be otherwise as to the jurisdiction, if the suit had been pending in the state court at the time of the institution of the bankruptcy proceedings, is a question I do not intend to determine in this ease.
2. But, I am of opinion that the proceeding by the assignee against the Guaranty and Indemnity Company should have been by bill in equity, and not in this informal and summary way. The 2d section provides, that the circuit courts shall have concurrent jurisdiction with the district courts, of all suits at law or in equity, which may be brought by the assignee in bankruptcy against any person claiming an adverse interest, or by such person against such assignee, touching any property, or rights of property, of the bankrupt, &c., but limits the suits, so that they must be brought within two years from the time the cause of action accrued for, or against, the assignee. The 8th section gives an appeal to the circuit court from the decrees of the district court, in all cases in equity, and a writ of error in cases at law, when the debt or damages claimed amount to more than five hundred dollars. The residue of the section applies principally to the case of a creditor whose claim has been rejected or allowed by the district court in the course of the bankruptcy proceedings, and has no application to the present case, as the Guaranty and Indemnity Company has not appeared as a creditor therein. The 9th section allows an appeal, or writ of error, from the circuit court to the supreme court, where the matter in dispute exceeds two thousand dollars.
Now, under the 2d section of the act, and the concurrent jurisdiction there conferred, this proceeding might have been instituted in the circuit court. It is a proceeding by the assignee against a person claiming an adverse interest, within the very words of the section; and, it seems to me, that a fair interpretation of them would require the proceeding to be a suit at law, or a bill in equity, as the ease might be. If so, I think the proceeding should be the same in the district court. It is by no means clear, that, under the 8th section, an appeal would lie to the circuit court, from a decision of the district court, in the summary proceedings in the present case.
I shall direct, therefore, that the petition of the assignee to the district court be amended, and be filed as a bill in equity; that, on
