Gilmer v. Wilcox

Eschweiler, J. The plaintiff here filed a claim for an unsecured contract obligation, not reduced to judgment, in bankruptcy proceedings in the federal court. In and by such bankruptcy proceedings all the assets, including the claim sought to be maintained by the plaintiff here, became subject to the primary and exclusive jurisdiction of the federal court until at least in some manner such assets or some part thereof had been renounced. Having, therefore, submitted his own claim to the jurisdiction of such federal court, and the right to pursue and collect all possible assets of the bankrupt company being by law now in the same federal court, it is to that court tha‘t application must be first [109] made and relief exhausted or denied before the state courts can or should entertain jurisdiction of such matters. That the trustee in such bankruptcy proceedings succeeds to all the rights of the bankrupt as to its assets, including claims such as this, cannot be questioned. McGovern v. Eckhart, 192 Wis. 558, 561, 213 N. W. 332; McGovern v. Kraus, 192 Wis. 564, 565, 213 N. W. 334; Miley v. Heaney, 168 Wis. 58, 90, 169 N. W. 64. In U. S. F. & G. Co. v. Bray, 225 U. S. 205, 32 Sup. Ct. 620, it is held that the proceedings therein, including the supervision and. control of the trustee, are intended by the bankruptcy act to be exclusive of all other courts (p. 217), and that such courts and they alone must proceed to final settlement and distribution in a summary way and are not at liberty to surrender such exclusive control to another tribunal (p. 218). Acme H. Co. v. Beekman L. Co. 222 U. S. 300, 307, 308, 32 Sup. Ct. 96, is to the same effect. The holdings of these respective decisions have been approved in such cases as Taylor v. Voss, 271 U. S. 176, 181, 46 Sup. Ct. 461; Lazarus v. Prentice, 234 U. S. 263, 266, 34 Sup. Ct. 851; White v. Stump, 266 U. S. 310, 313, 45 Sup. Ct. 103; May v. Henderson, 268 U. S. 111, 117, 45 Sup. Ct. 456; and Meek v. Centre County B. Co. 268 U. S. 426, 429, 45 Sup. Ct. 560. In the case of In re American & British Mfg. Corp. 300 Fed. 839, a full discussion of the subject is had. The complaint not only fails to show that application was made in the bankruptcy proceedings to have the trustee authorized or compelled to institute proceedings to collect on any possible liability of the two individual defendants for such unpaid balances, but it clearly negatives the idea that any such application was there made. The plaintiff here, by filing his claim in the bankruptcy proceeding and becoming a party thereto, clearly should have there first applied for relief as against assets within the exclusive jurisdiction of that court. [110] What the rights of the plaintiff might have been as against the two defendant stockholders if, prior to the bankruptcy proceeding, or subsequent, but without participating and in disregard of such bankruptcy proceeding, the plaintiff had pursued the remedies under ch. 286, Stats., — either under sec. 286.21, specially relied upon in the complaint, supra, which statute requires a court in which a judgment shall have been rendered in an action where the corporation, its directors, officers, or stockholders are parties, to proceed to ascertain the respective liabilities of such individuals, the present property of such corporation being insufficient to discharge its debts; or under sec. 286.18, here now first asserted, which permits the creditor of a corporation to maintain an action in the circuit court making, if desired, the corporation a party, where he seeks to charge the directors, trustees, or stockholders on account of any such liability created by law, — is in no proper manner now before us. The respective demurrers on the ground that the complaint does not state facts sufficient to constitute a cause of action were properly sustained. By the Court. — Judgment affirmed.