Wilcox v. Civil Sheriff of Parish of Orleans

McCORMICK, Circuit Judge, having stated the facts as above, delivered the opinion of the court. "We do not understand that either of the parties to this proceeding have excepted, either in the circuit court or in this court, to the action of the, judge. of the court of bankruptcy in transferring the administration, of the estate of -this bankrupt into-the circuit court [913] under section 601 of the Revised Statutes of the United States, or to have objected, either in that court or in this court, that the circuit court did not have jurisdiction to proceed therein as provided bisection 637 in reference to “any cause, civil or criminal, of whatever nature.” We refer to the matter only to announce that our action in this case may not he taken as indicating any view we may have as to the application of those sections of the Revised Statutes to this subject. We, however, invite the attention of the courts of bankruptcy and the' bar to the consideration of clause 8 in section 1, and to the definition of “courts of bankruptcy” repeated in section 2, and to clauses 3, 4, and 5 of section 38, of the bankrupt act of 1898, and to general order 3so. 12 (32 C. C. A. xvi., 89 Fed. vii.). The exception taken by the civil sheriff to the jurisdiction of the court below was taken to it as a court of bankruptcy, and not on the ground that it was the circuit court, and not (unbraced within the definition of “courts of bankruptcy.” In this court it is urged orally by counsel on behalf of the civil sheriff that this court is without jurisdiction, because the order of the court below is not such a judgment as may he reviewed on appeal or writ of error under section 25, and that the action taken is not sufficient to bring the subject to the attention of this court under clause “b” of section 24. Counsel for the trustee does not contend that the case is here by appeal, but he does insist that it is properly presented on his petition for review. In the preparation and presentation of this petition counsel was guided by the suggestions of this court in a case heretofore decided, in which we said: “In analogy to the rule prescribed for allowing appeals, and to the practice in allowing writs of error in cases at law, the petition for revision may be presented to and allowed by a judge of the court of bankruptcy, or any one of the judges of this court.” In re Abraham, 35 C. C. A. 592, 93 Fed. 783. In the case now before ns the bankruptcy proceedings were being conducted, as already mentioned, in the circuit court, which explains, if it needed explanation, the address of the petition to the circuit court. Section 24b provides that the power- of review conferred upon this court shall be exercised on due notice and petition by anv party aggrieved. It does not limit the time within which the petition shall be presented, allowed, and perfected. In this case the petition was presented to a judge of this court five days after the judgment wTas rendered which it seeks to have reviewed. It is not plain that immediate notice was not given to the parties, and the record shows that formal notice was served on the attorneys of record on the 1st day of August, 1900. The petition brings up the whole record of the action taken by the court conducting the bankrupt proceedings bearing upon the judgment sought to he reviewed, and we are clear, for the reasons stated in our opinion in Re Abraham, supra, that the petition for review and the action thereon, and the compliance with the order of the judge, properly bring before us the proceedings sought to be reviewed, and that the objection urged thereto is not well taken. . Counsel for the respondent sheriff further urge that the court of bankruptcy having been without jurisdiction' to grant the orders [914] prayed for in the rule taken by the trustee, and the court having denied the rule, that action can be Reviewed only, if at all, by an appeal to the supreme court. These questions are of perennial recurrence. It is to be observed that the question of jurisdiction is not the only one presented by the answer which the respondent sheriff made in the circuit court to the rule taken by the trustee; that in that court he submitted three other grounds on which he relied as defenses against the relief sought by the trustee. And it is to be observed further that the judge does not, on.the face of the order made by him, ground his action on the want of jurisdiction in the court. We think the question of jurisdiction of this court is not well taken in this case. The language of the* section cited seems clear to us: “The several circuit courts of appeal shall have jurisdiction in equity, either interlocutory or final, to superintend and revise in matter of law proceedings of the several inferior courts of bankruptcy within their jurisdiction.” The words “within their jurisdiction” manifestly relate to territorial limits, confining this court to the exercise of the jurisdiction conferred to superintend and revise in matter of law the proceedings of the several courts of bankruptcy in this circuit. As we have already noticed, the action we are asked to review was taken as in a court of bankruptcy. And, assuming (which is not contested by the parties to this proceeding) that the action was the action of a court of bankruptcy, we refrain from the citation of further authority to show our jurisdiction. The subject of the controversy was money in the hands of an officer of the state court, the proceeds of the sale of property made under a judgment and decree of the state court fixing the amount due by the defendant in the suit in that court, and decreeing the statutory privilege and right of pledge granted and fixed by the state law in favor of the plaintiffs in that suit. The suit was begun and proceeded to judgment, and there was a seizure thereundei of the property subject to the privilege and right of pledge, and the same was advertised for sale, all before the beginning of the bankruptcy proceedings in this case. The bankruptcy proceedings were not involuntary. The state court had the amplest possession of the subject of the controversy and full jurisdiction of the parties at the date of the institution of the bankruptcy proceedings. There is no' provision in the present bankrupt law which authorizes or permits the" courts of bankruptcy, by the use of either summary or plenary process, to stop the proceedings of the state court in a suit in which it had alreády, before the institution of the proceedings in bankruptcy, obtained possession of the subject-matter and jurisdiction of the parties. What effect the provisions of the bankrupt act may have to stay proceedings in a state court is a question of which that court has full jurisdiction to decide, subject to prescribed methods of review, and which the courts of bankruptcy may not attempt to limit or control without a manifest disregard of that comity which is an essential element of our public law, and under which our state and national systems of judiciary work in admirable harmony. Certainly with, and probably without, an order of the court of bankruptcy, the trustee in this case could have made his application to the state court [915] in the suit therein pending, setting up his claim, or the claim of the estate he represents, to the proceeds in question. Or, in answer to the rule taken in that court by the sheriff, the trustee could have fully presented the claims and had the rights of the bankrupt estate in the proceeds adjudged in that suit. If the personal property seized and held by H. B. McMurray, civil sheriff for the parish of Orleans, had been held by him in his individual capacity, and, upon demand made on him by the trustee for the delivery up of the property, that demand had been refused on the ground that he had a right to hold it for the satisfaction of other claims upon it, the case would then he brought within the provision of section 23b, as construed by the supreme court of the United States (Bardes v. Bank, 178 U. S. 524, 20 Sup. Ct. 1000, 44 L. Ed. 1175; Mitchell v. McClure, 178 U. S. 539, 20 Sup. Ct. 1000, 44 L. Ed. 1182; Hicks v. Knost, 178 U. S. 541, 20 Sup. Ct. 1006, 44 L. Ed. 1183); and as construed by this court in Re Abraham, supra; and the trustee could not proceed in the court of bankruptcy against McMurray to enforce the recovery thereof, except by his consent. And it seems to us that, for a stronger reason, the court of bankruptcy cannot entertain a suit or rule against him when he holds the personal property and effects, or the proceeds, not as an individual adverse claimant:, hut as the executive officer of a state court of competent original jurisdiction. It is unnecessary to notice the other matters set up in the sheriff’s answer. The judgment of the court of bankruptcy is affirmed.