237 F. 737 | 5th Cir. | 1916
(after stating the facts as above).
At the time the Moore Company filed its petition in bankruptcy, said company was in full, undisturbed possession of all the plantations and property scheduled as assets in the bankruptcy; and, when the receivers were appointed, they took possession of all the property for the bankruptcy court, and they were in possession and control at the time the order complained of was entered.
The application of the Levert Company to the bankruptcy court for the appointment of one of their number as a co-receiver is a judicial admission of these facts, and it cannot be said that the bankruptcy court has seized and taken possession of property at the time in the possession 'and custody of the state court.
It seems therefore clear that, if we should concede that comity should prevail between the bankruptcy court and tire state court, the case presented does not show a proper and necessary case for the exercise of the same.
It is well settled that, under the Constitution and laws of the United States, bankruptcy courts are vested with superior and exclusive jurisdiction in the administration of the estate of the bankrupt. Section 11 of the Bankruptcy Law gives authority to the bankruptcy court to stay proceedings in actions against the bankrupt pending in other courts.
Any property surrendered by the bankrupt which could or should be released by the court from such administration can only be property in which, by reason of conceded and absorbing superior liens and privileges, the trustees in bankruptcy have no equity.
In the present case, the record fully shows that by reason of the set-off and counterclaim,of Moore Company against the Levert Company, provided for in section 68, Bankruptcy Law, and which could not be allowed in the state court, as well as by reason of the situation and prospects for the successful prosecution of the plantations in making
It follows that the order complained of cannot be sustained on the ground of comity, nor on the facts of the case as to the want of equity on the part of the trustees.
The petition to superintend is granted, and it is ordered and adjudged that the order of April 14, 1916, permitting the Revert Company to proceed in the state court, and practically turning over the property of the bankrupt to be administered in the state court, be, and the same is, vacated.