Littlefield v. Gay

| Me. | Apr 29, 1902

Strout, J.

The question here involved is whether the insolvency law of this state is superseded by the bankrupt act of the United States, as to debtors owing more than three hundred dollars and less than one thousand.

The insolvent law of this state is not wholly superseded by the bankrupt act, but when they come in conflict, the latter must prevail. Damon’s Appeal, 70 Maine, 155. So far as the person and subject matter falls within the provisions of the bankrupt act, and is within the jurisdiction of the bankrupt court, the state insolvency law is superseded and cannot be invoked. First National Bank of Guilford v. Ware, 95 Maine, 395; Ogden v. Saunders, 12 Wheat. 213" court="SCOTUS" date_filed="1827-03-13" href="https://app.midpage.ai/document/ogden-v-saunders-85530?utm_source=webapp" opinion_id="85530">12 Wheat. 213; Ex parte Eames, 2 Story, 324.

In the case before us Blackington, the insolvent debtor, owing less than one thousand dollars, was petitioned into insolvency in 1899 by his creditors, while the United States bankrupt act Avas in force. The state insolvency court took jurisdiction, decreed him insolvent and appointed the plaintiff assignee. This action is to set aside a conveyance by Blackington as a preference under the state laAv.

Under the bankrupt laAv Blackington could have gone into bankruptcy voluntarily, but could not be forced in by his creditors, under involuntary proceedings. He was asked to go in and refused. It is argued with great ability, that in that condition, the state insolvency law may be invoked. Plausible as the argument is, we do not regard it as sound. At any time after proceedings under the state law, Blackington could have voluntarily invoked the bankrupt law, and thereupon all proceedings under the state laAv would necessarily cease. The test of jurisdiction under the state law does not rest upon the volition of the debtor. If his person and property are or may be subject to the bankrupt laAv, then as to him and his possessions the state insolvency law is in abeyance and povrerless. Upon any other view, it would be in the poAver of the debtor at any time to oust the jurisdiction of the state court, after it had been assumed. This would result in great confusion. It may be avoided by holding as we do, that where the person falls within the purview of the bankrupt act, whether by voluntary or involuntary proceedings, the state insolvent law must be silent.

When this case was previously before the court, we said that there might be cases Avhere the insolvency court would have jurisdiction, notwithstanding the bankruptcy act. If such cases can arise, it can only be in instances not within the purview of the bankrupt act, where its provisions cannot be invoked either by the debtor or his creditors. This case does not fall within that rule.

It follows that the insolvency court was without jurisdiction in this case, and the appointment of plaintiff as assignee was unauthorized and void. He therefore has no standing in court.

Exceptions overruled.