Pollock & Co. v. Hill

SOMERVILLE, J. Prior to the adoption of the Revised Statutes of the United States, which was on June 22d, 1874, the chancery courts of this State had jurisdiction to entertain a bill filed by an assignee in bankruptcy, to assail and set aside transfers of property made by the bankrupt, in fraud of the rights of his creditors, or in fraud of the assignee as their trustee or fiduciary representative. — Barnard v. Davis, 54 Ala. 565; Bradley v. Hunter, 50 Ala. 265; Claflin v. Houseman, 93 U. S. 130; Cook v. Whipple, 14 Amer. Rep. 202 [S. C. 55 N. Y. 150]. Since the adoption of these statutes, however, and the enactment, on the same day, by Congress, of the law of June 22d, 1874, amendatory of the bankrupt act of 1867, the jurisdiction, of the Federal courts has been exclusive as to all actions instituted by an assignee in bankruptcy for the recovery or collection of the assets of the bankrupt, unless such actions can be brought within the influence of the exception created by the amendment. — U. S. Stat. at Large, vol. 18, part 3, p. 178; Laws of U. S. p. 210, § 2. In order to confer such jurisdiction upon the State courts, two prerequisites are essential. The first is, that the court hav [517] ing charge of the estate of the bankrupt, which is of course the court in which the bankrupt proceedings are pending, shall authorize or direct the assignee to sue in the State courts; and the second is, that the amount in controversy in such action shall not exceed the sum of five hundred dollars. This question was considered by this court in Glover, Assignee, &c., v. Love, 68 Ala. 219, where the conclusion above indicated was reached. See Dodd v. Hammock, 59 Ga. 403; Sherwood v. Burns, 58 Ind. 502; Olcott v. Maclean, 73 N. Y. 223. In this cause the bill was filed in April, 3879, and the Chancery Court was, therefore, without jurisdiction over the subject-matter in controversy, under the principle above declared. The record shows that the fair value of the laud conveyed by the bankrupt to the appellants was about two thousand dollars. It fails further to show that the assignee had any authority conferred on him by the bankrupt court to bring this suit in a State court. He was authorized and directed merely “to take charge ■of all the assets, real and personal, of said bankrupt in the State of Alabama, and to bring suit for the recovery of all real and personal property, in the State of Alabama, rightfully belonging to the estate of said bankrupt.” There is nothing said here 0-about suing in the State courts. No authority to this end is given to the assignee. ’Without the requisite order, the Federal courts in this State constituted the proper forum for the litigation here presented. The chancellor erred, therefore, in taking jurisdiction of the case as made by the record. His decree must be reversed, and a decree is rendered in this court dismissing the complainant’s bill at his cost.