In re Van Alstyne

COXE, District Judge (after stating the facts as above). The controversy in the Rice action was one of which the state court had jurisdiction both as to the parties and the subject-matter. The trustee in bankruptcy voluntarily submitted himself to the jurisdiction [931] of (be court. The, judgment determines, in effect, that other liens were paramount to Hie lien of the bankrupt and that his trustee has no available interest in the fund in the state court. It is a mistake to assume that the state court: attempted to administer the bankrupt’s estate. On the contrary that court was only called upon to deal with questions of priority among the creditors of the liochester Exhibition Company, Van Alslyne being one. The court decided that there were other liens on the property of the exhibition company superior to his. Not only had the court jurisdiction to determine this question, but the bankrupt, and subsequently the trustee, formally requested the court to decide it. The first prayer of the answer is “that the equities of all the parties to this action and the order of priority of said liens may be adjusted and determined between the parties.” The fund in the hands of the officer of the state court is not the property of the bankrupt, or the avails thereof; it: is not even property upon which either he or his trustee has a lien. It is, in short, a fund which a court, having a right to make the decision, has decided belongs to some one else. It is by no means certain that the bankruptcy court, even if it could take cognizance of the various questions of priority arising among the creditors of the exhibition company, would reach a conclusion different from that reached by the state court. It is, however, unnecessary to consider this aspect of the controversy, for the reason that the trustee voluntarily chose the state court as the tribunal to determine his rights and he is now bound by its decision. Not until March of the present year has he disputed in any way the jurisdiction of the state court. On the other hand he has openly recognized its jurisdiction by participating in all the proceedings Until after the final judgment. The judgment of the state court is binding upon the parties to that action. The motion for an injunction is denied and the temporary restraining order is vacated.