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clauses, are entitled to little or no weight. Carter v. Hobbs (D. C. 1899) 92 Fed. 594, 1 Am. Bankr. Rep. 215.
The proceeding contemplated by the bankruptcy act is not a mere personal action against the bankrupt for the collection of debts, but is also a proceeding in rem to impound all of his nonexempt property and to distribute it equitably among his creditors; and hence the court must, if possible, so construe the act as to secure uniformity in its administration. Hills v. F. D. McKinniss Co. (D. C. 1910) 188 Fed. 1012, 26 Am. Bankr. Rep. 329. In construing its terms giving or excluding its benefits, resort must be had to their meaning in the common law, rather than in the local law of the state where the proceedings are had. Austill v. Crawford (1845) 7 Ala. 335.
In construing the bankruptcy law, the federal courts are not bound by decisions of state courts upon similar terms in the insolvency law of the state. In re Knight (C. C. 1871) 8 X. B. R. 436, Fed. Cas. No. 7,880; In re Plotke (1900) 104 Fed. 964, 44 C. C. A. 282, 5 Am. Bankr. Rep. 171. The construction or interpretation of the various provisions of the bankruptcy act, as settled by the decisions of the federal courts, particularly the Supreme Court, will be accepted and applied by the state courts, in all cases before them arising under or involving that statute, without an independent consideration of the question presented, it applicable rulings of the federal courts are brought to their notice. Rugely v. Robinson (1851) 19 Ala. 404; Burnham v. Ft. Dodge Grocery Co. (1909) 144 Iowa, 577, 123 N. W. 220; Stewart v. Hoffman (1905) 31 Mont. 184, 77 Pac. 689, 81 Pac. 3; Mount v. Manhattan Co. (1886) 41 N. J. Eg. 211, 3 Atl. 726; Wagner V. Burnham
(1909) 224 Pa. 586, 73 Atl. 990; Ferrell v. Madigan (1882) 76 Va. 195; Bank of Garrison v. Malley (1910) 103 Tex. 562, 131 S. W. 1064; Broadnax v. Bradford (1874) 50 Ala. 270; Russell v. Cheatham (1847) 8 Smedes & M (Miss.) 703; Kreitz v. Egelhoff (1910) 231 Mo. 694, 132 S. W. 1124.
4. Repealing acts.-Section 60b; as amended June 25, 1910 (post, § 9644), did not repeal section 67f (post, $ 9651), and hence a petition by a bankrupt's trustee to enjoin the enforcement of the judgment recovered against the bankrupt within four months was not defective for failure to charge that the creditor at the time he recovered the judgment had reasonable cause to believe its enforcement would effect a preference. In re Petersen (1912) 200 Fed. 739, 119 C. C. A. 183.
5. Retroactive operation.-A retrospective effect will not be given to Act June 25, 1910, § 8, amending § 47a, subd. 2 (post, $ 9631), by giving trustee in bankruptcy the rights of a creditor holding a lien so as to defeat title of conditional vendor under a contract of sale, which because unregistered was, under Code Va. 1904, § 2462, void as to lien creditors without notice. Holt v. Henley (1914) 34 S. Ct. 459, 232 U. S. 637, 58 L. Ed. 767, reversing decree (1912) 193 Fed. 1020, 113 C. C. A. 87.
Section 47a(2), as amended by Act June 25, 1910, 8 8 (post, § 9631), is purely remedial and may properly be given a retroactive effect and applied to contracts of conditional sale made prior to its enactment which by the state law are void as to certain classes of creditors. In re Farmers' Co-operative Co. of Barlow, N. D. (D. C. 1913) 202 Fed. 1008.
CHAPTER TWO Creation of Courts of Bankruptcy and Their Jurisdiction § 9586. (Act July 1, 1898, c. 541, § 2, as amended, Act Feb. 5, 1903,
C. 487, § 1, and Act June 25, 1910, c. 412, SS 1, 2.) Courts of
bankruptcy; jurisdiction and powers. The courts of bankruptcy as hereinbefore defined, viz, the district courts of the United States in the several States, the supreme court of the District of Columbia, the district courts of the several Territories, and the United States courts in the Indian Territory and the District of Alaska, are hereby made courts of bankruptcy, and are hereby invested, within their respective territorial limits as now established, or as they may be hereafter changed, with such jurisdiction at law and in equity as will enable them to exercise original jurisdiction in bankruptcy proceedings, in vacation in chambers and during their respective terms, as they are now or may be hereafter held, to (1) adjudge persons bankrupt who have had their principal place of business, resided, or had their domicile within their respective territorial jurisdictions for the preceding six months, or
the greater portion thereof, or who do not have their principal place of business, reside, or have their domicile within the United States, but have property within their jurisdictions, or who have been adjudged bankrupts by courts of competent jurisdiction without the United States and have property within their jurisdictions; (2) allow claims, disallow claims, reconsider allowed or disallowed claims, and allow or disallow them against bankrupt estates; (3) appoint receivers or the marshals, upon application of parties in interest, in case the courts shall find it absolutely necessary, for the preservation of estates, to take charge of the property of bankrupts after the filing of the petition and until it is dismissed or the trustee is qualified; (4) arraign, try, and punish bankrupts, officers, and other persons, and the agents, officers, members of the board of directors or trustees, or other similar controlling bodies, of corporations for violations of this act, in accordance with the laws of procedure of the United States now in force, or such as may be hereafter enacted, regulating trials for the alleged violation of laws of the United States; (5) authorize the business of bankrupts to be conducted for limited periods by receivers, the marshals, or trustees, if necessary in the best interests of the estates, and allow such officers additional compensation for such services, as provided in section forty-eight of this act; (6) bring in and substitute additional persons or parties in proceedings in bankruptcy when necessary for the complete determination of a matter in controversy; (7) cause the estates of bankrupts to be collected, reduced to money and distributed, and determine controversies in relation thereto, except as herein otherwise provided; (8) close estates, whenever it appears that they have been fully administered, by approving the final accounts and discharging the trustees, and reopen them whenever it appears they were closed before being fully administered; (9) confirm or reject compositions between debtors and their creditors, and set aside compositions and reinstate the cases; (10) consider and confirm, modify or overrule, or return, with instructions for further proceedings, records and findings certified to them by referees; (11) determine all claims of bankrupts to their exemptions; (12) discharge or refuse to discharge bankrupts and set aside discharges and reinstate the cases; (13) enforce obedience by bankrupts, officers, and other persons to all lawful orders, by fine or imprisonment or fine and imprisonment; (14) extradite bankrupts from their respective districts to other districts; (15) make such orders, issue such process, and enter such judgments in addition to those specifically provided for as may be necessary for the enforcement of the provisions of this act; (16) punish persons for contempts committed before referees; (17) pursuant to the recommendation of creditors, or when they neglect to recommend the appointment of trustees, appoint trustees, and upon complaints of creditors, remove trustees for cause upon hearings and after notices to them; (18) tax costs, whenever they are allowed by law, and render judgments therefor against the unsuccessful party, or the successful party for cause, or in part against each of the parties, and against estates, in proceedings in bankruptcy; (19) transfer cases to other courts of bankruptcy and (20) exercise ancillary jurisdiction over persons or property within their respective territorial limits in aid of a receiver or trustee appointed in any bankruptcy proceedings pending in any other court of bankruptcy.
Nothing in this section contained shall be construed to deprive a court of bankruptcy of any power it would possess were certain specific powers not herein enumerated. (30 Stat. 545. 32 Stat. 797. 36 Stat. 838, 839.)
In this section, as originally enacted, clause 5 thereof was as follows:
by receivers, the marshals, or trustees, if necessary in the best interests of the estates;"
It was amended by Act Feb. 5, 1903, c. 487, § 1, cited above, by adding to clause 5, at the end thereof, the words "and allow such officers additional com. pensation for such services, but not at a greater rate than in this act allowed trustees for similar services."
It was further amended by Act June 29, 1910, c. 412, § 1, by changing the provision added by said previous amendment so as to read "and allow such officers additional compensation for such services, as provided in section fortyeight of this act;" making said clause 5 read as set forth here.
In the section, as originally enacted, also, the numbered clauses ended with clause 19, as follows:
"and (19) transfer cases to other courts of bankruptcy."
It was amended by said Act June 29, 1910, c. 412, § 2, cited above, by striking from clause 19 the word "and," and adding a new clause, to be known as clause 20, making the section read as set forth here.
Section 19 of said first amendatory Act Feb. 5, 1903, c. 487, 32 Stat. 801, provided that the act should not apply to bankruptcy cases pending when it took effect, but that such cases should be adjudicated and disposed of conformably to the provisions of the original act.
Section 14 of said second amendatory Act June 25, 1910, c. 412, 36 Stat. 842, also provided that the act should not apply to bankruptcy cases pending when it took effect, but that such cases should be adjudicated and disposed of conformably to the provisions of the original act as previously amended.
Further as to extradition of bankrupts see post, $ 9594. See, also, ante, 8 1695.
Notes of Decisions 1. Jurisdiction of courts of bankruptcy 35. Taxation of costs.
36. Fees of attorneys. 1. Courts of bankruptcy.
37. Attorney for bankrupt. 2. General principles of jurisdiction in
38. Attorneys for petitioning and othbankruptcy.
er creditors. 2. Jurisdiction of bankruptcy courts ex
39. Attorney for receiver. clusive. 4. Waiver of objections to jurisdiction. 5. Territorial limits of jurisdiction.
1. JURISDICTION OF COURTS OF 6. Jurisdiction dependent on residence or
BANKRUPTCY . domicile.
1. Courts of bankruptcy.-The bank7. Principal place of business. 8. Length of duration of residence or
ruptcy act intends and provides for only domicile.
one court of bankruptcy within each 9. Jurisdiction dependent on amount of judicial district, although there may be debts.
several district judges attached to, or 10. Jurisdiction of bankrupt's person.
authorized to hold, the court. 11. Summary jurisdiction.
Steele (D. C. 1908) 161 Fed. 886, 20 12. Equitable jurisdiction and powers.
Am, Bankr. Rep. 687. 13. Ancillary jurisdiction.
A district court does not cease to 14. Jurisdiction to reverse or set aside former proceedings.
exist because of a, vacancy in the office 15. Conflicts ol jurisdiction with state of judge, in such sense that proceedcourts.
ings in bankruptcy may not be institut16. Effect of appointment of receiver ed therein; but in such a case it is the by state court.
duty of the clerk to receive and file the 17. Property in possession of sheriff.
petition when offered, and it seems 18. Power to enjoin proceedings in
that he may also issue a subpæna therestate courts. 19. Practice in bankruptcy.
on, tested in his own name. 20. Powers and authority of judge.
Urban & Suburban Realty Title Co. (D.
C. 1904) 132 Fed. 140, 12 Am. Bankr. 11. Receiverships in bankruptcy pro.
Rep. 687. ceedings
2. General principles of jurisdiction in 21. Appointment of receiver.
bankruptcy. A court of bankruptcy 22. Powers and duties of receiver,
derives all its jurisdiction from the 23. Continuing bankrupt's business.
statute which creates it. In re Wil24. Claims of third persons against re
liams (D. C. 1903) 120 Fed. 38, 9 Am, ceiver or estate. 25. Actions by and against receiver.
Bankr. Rep. 741; Jobbins v. Montague 3. Ancillary receiverships.
(D. C. 1872) 6 N. B. R. 509, Fed. Cas. 27. Accounts and compensation of receiver.
No. 7,330. Its proceedings are open Fees of receiver's attorney.
to collateral impeachment on questions 29. Sales of property by receivers.
of jurisdiction. Adams v. Terrell (D. III. Taxation of costs and fees
C. 1878) Fed. Cas. No. 796. The rec
ord of a bankruptcy court must disclose 30. Power to award costs.
the facts necessary to confer jurisdic31. Amount and items of costs. Costs on appeal.
tion in any particular case.
Smith v. 33. Persons entitled to costs.
Engle (1876) 44 Iowa, 265. But com34. Persons, property, or funds liable for pare In re Columbia Real Estate Co. costs.
(D. C. 1900) 101 Fed. 965, 4 Am.
Bankr. Rep. 411; Allen v. Thompson (D. C. 1882) 10 Fed. 116. When the jurisdiction of a court of bankruptcy is shown to have attached, the subsequent proceedings are presumed to have been regular, and the decision of the court, whether correct or not, on every question properly arising in the case, is binding and conclusive on all other courts until reversed on appeal. In re Casey (D. C. 1912) 195 Fed. 322, 28 Am. Bankr. Rep. 359; In re Marion Contract & Construction Co. (D. C. 1909) 166 Fed. 618, 22 Am. Bankr. Rep. 81; In re Columbia Real Estate Co. (D. C. 1900) 101 Fed. 965, 4 Am. Bankr. Rep. 411.
In a bill filed in a state court by a bankrupt to enjoin a judgment which had been included in his schedule, it was not necessary to plead the jurisdiction of the court which granted the discharge. Reed v. Vaugn (1847) 10 Mo. 447.
A court of bankruptcy has unlimited jurisdiction in respect of its powers over proceedings in bankruptcy, conferred by this section, Sabin v. LarkinGreen Logging Co. (D. C. 1914) 218 Fed. 984, judgment affirmed LarkinGreen Logging Co. v. Sabin (C. C. A. 1915) 222 Fed. 814. But it has no jurisdiction under the bankruptcy act of independent suits at law or in equity. Maryman v. S. G. Dreyfus Co. (Ark. 1915) 174 S. W. 549.
The jurisdiction of bankruptcy courts includes everything necessary to settle, administer, and distribute the bankrupt's estate, but it does not include the protection of property set over to the bankrupt as exempt from adverse liens. Jeffries v. Bartlett (C. C. 1884) 20 Fed. 496, 498.
The general rule that a court has no power to set aside or modify its judgments or decrees after the term does not apply to orders and decrees in a bankruptcy proceeding as to which there are no separate terms. Burr Mfg. & Supply Co. (1914) 217 Fed. 16, 133 C. C. A. 126, reversing order (D. C. 1913) 209 Fed. 138.
The fact that a state is a creditor of the bankrupt, and therefore in a certain sense a party to the proceeding, does not affect the jurisdiction of the bankruptcy court. In re Greenville & C. R. Co. (D. C. 1872) Fed. Cas. No. 5,787.
Where proceedings in bankruptcy affect property not embraced in the assets of the bankrupt, they can bind only such persons in interest as have actual notice of them; but in so far as the proceedings affect only the assets in bankruptcy, they are in the nature of proceedings in rem and conclusive upon all persons, actual notice not being essential to the jurisdiction of the court. Hanover Nat. Bank v. Moyses (1902) 186 U. S. 181, 22 Sup. Ct. 857, 46 L. Ed. 1113, 8 Am. Bankr. Rep. 1; In re Judkins (D, C. 1875) Fed. Cas. No. 7,
560; Rayl v. Lapham (1875) 27 Ohio St. 452.
3. Jurisdiction of bankruptcy courts exclusive.-The jurisdiction of the bankruptcy courts in all proceedings in bankruptcy is exclusive of all other courts, and such proceedings include all matters of administration, such as the allowance, rejection, and reconsideration of claims, the reduction of estates to money, and its distribution, the determination of the preferences and priorities to be accorded to claims presented for allowance and payment in regular course, and the supervision and control of trustees and others who are employed to assist them. United States Fidelity & Guaranty Co. v. Bray (1912) 225 U. S. 205, 32 Sup. Ct. 620, 56 L. Ed. 1055, 28 Am. Bankr. Rep. 207.
The jurisdiction of a court of bankruptcy over the property of a bankrupt estate is exclusive from the time of the filing of the petition, and it has no power to surrender its exclusive control over the administration of such property to any other court. Hence a court of bankruptcy will not direct the surrender of vessels, in the possession of its receiver and admittedly belonging to a bankrupt estate, to an admiral. ty court to answer to the suit of a libel. ant, who desires to enforce maritime liens against them, although for a liability which arose before the bankruptcy. The Casco (D. C. 1916) 230 Fed. 929.
Upon a valid adjudication of bankruptcy, the jurisdiction of the court of bankruptcy, which attaches from the time of the filing of the petition, to administer the property of the bankrupt, is exclusive, and no other court, after the filing of such petition, can make any order or decree which will deprive it of such exclusive jurisdiction, nor the court of bankruptcy itself properly surrender it to another court. In re Sage (D. C. 1915) 224 Fed. 525, 35 Am. Bankr. Rep. 436; Commercial Trust & Savings Bank v. Busch-Grace Produce Co. (C. O. A. 1916) 228 Fed. 300.
In all matters which properly concern the administration of an estate in bankruptcy, the jurisdiction of the proper federal court is exclusive and not to be shared with any state court, and is plenary and not to be interfered with. In re Anderson (1885) 23 Fed. 482; In re Barrow (D. C. 1868) 1 N. B. R. 481, Fed. Cas. No. 1,057; Newman v. Fisher (1873) 37 Md. 259.
The purpose of the bankruptcy law is to bring all the property of the bankrupt into the court of bankruptcy for administration, and that court is furnished with all the needful power to collect the assets, settle all conflieting claims or liens upon such property, and cause it to be distributed to those who are entitled to share in it. Sacchi (C. C. 1872) Fed. Cas. No. 12,200.
All the property and estate of the bankrupt are considered as in custodia legis from the date of the adjudication, if not from the time of filing the petition. In re Weinger, Bergman & Co. (D. C. 1903) 126 Fed. 875, 11 Am. Bankr, Rep. 424; In re Wells (D. C. 1902) 114 Fed. 222, 8 Am. Bankr. Rep. 75; Beekman Lumber Co. v. Acme Harvester Co. (1908) 215 Mo. 221, 114 S. W. 1087; Zeigler v. Shomo (1875) 78 Pa. 357. And all such property is under the jurisdiction and control of the court of bankruptcy, in which court alone all persons who claim rights in * the property so sequestrated, or who seek to participate in its distribution, must assert their claims, the jurisdiction of the federal court in this particular being not only paramount but exclusive. Leidigh Carriage Co. v. Stengel (1899) 95 Fed. 637, 37 C. C. A. 210, 2 Am. Bankr. Rep. 383; Carter v. Hobbs (D. C. 1899) 92 Fed. 594, 1 Am. Bankr. Rep. 215; In re Fisher (D. C. 1899) 98 Fed. 89, 3 Am. Bankr. Rep. 406; In re Smith (D. C. 1899) 92 Fed. 135, 2 Am. Bankr. Rep. 9; In re Anderson (D. C. 1885) 23 Fed. 482; Davis v. Anderson (D. C. 1872) 6 N. B. R. 145, Fed. Cas. No. 3,623; Zeigler v. Shomo (1875) 78 Pa. 357.
All the property which is brought within the administration of the court of bankruptcy is subject to its sole orders and disposition, and so remains during the entire time the proceeding in bankruptcy is pending. Markson v. Haney (1874) 47 Ind. 31.
An adjudication of bankruptcy vests the bankruptcy court with exclusive jurisdiction to administer the property of the bankrupt, as against any state court which may have obtained possession of such property through proceedings instituted within four months prior to the adjudication, and it is immaterial that the proceedings in the state court were for the enforcement of valid liens not affected by the bankruptcy act. In re Knight (D. C. 1903) 125 Fed. 35, 11 Am. Bankr. Rep. 1.
When the lien of an attachment from a state court is annulled by an adjudication in bankruptcy, such court loses jurisdiction of the property, which passes into the exclusive jurisdiction of the court of bankruptcy, and the question of comity cannot affect such jurisdiction. In re Tune (D. C. 1902) 115 Fed. 906, 8 Am. Bankr. Rep. 285.
When a general assignment for the benefit of creditors is made by a debtor, the same being an act of bankrupt. cy, the right immediately arises in his creditors to have the estate administered under the bankruptcy law; and where the enforcement of this right is demanded by a proper proceeding within four months after its inception, no action by any court in any suit brought after the commission of the act of bankruptcy can defeat it, without the consent of the court of bankruptcy,
whose jurisdiction is exclusive, and, on the making of the adjudication, relates back to the act of bankruptcy. In re Knight (D. C. 1903) 125 Fed. 35, 11 Am. Bankr. Rep. 1.
The bankruptcy law gives to courts of bankruptcy full power to enjoin all persons within their jurisdiction from doing any act that will interfere with
prevent its due administration, whether such persons are parties to the proceedings or not; and where they are litigants in a state court, no rule of comity requires the court of bankruptcy to compel persons whose rights under the bankruptcy law as jeopardized by such litigation to resort to the state court for protection. In re Hornstein (D. C. 1903) 122 Fed. 266, 10 Am. Bankr. Rep. 308.
4. Waiver of objections to jurisdiction.-An alleged bankrupt who files a motion to dismiss the petition against him, and appears in court to testify in support of allegations made therein, thereby waives any merely technical objection to the jurisdiction of the court over his person and estate. In re Smith (D. C. 1902) 117 Fed. 961, 9 Am. Bankr. Rep. 98.
In a proceeding in bankruptcy against stockholders of a corporation to compel the delivery of their stock to the bankrupt's trustee, the stockholders, by answering to the merits, waive any objection to the jurisdiction of the court to determine the issue of title to the stock. In re Mills (D. C. 1910) 179 Fed. 409, 25 Am. Bankr. Rep. 278.
5. Territorial limits of jurisdiction.When the jurisdiction of a court of bankruptcy has attached in a particular case by the filing of a petition and an adjudication thereon, the authority of the court in respect to the case is not territorially restricted to the boundaries of the judicial district or of the state, but it has jurisdiction of the debtor's entire property and estate, wherever situated, of debts and claims, wherever payable, and of creditors, wherever they reside. Babbitt V. Dutcher (1910) 216 U. S. 102, 30 Sup. Ct. 372, 54 L. Ed. 402, 17 Ann. Cas. 969, 23 Am. Bankr. Rep. 519; Wood v. Henderson (1908) 210 U. S. 246, 28 Sup. Ct. 621, 52 L. Ed. 1046, 20 Am. Bankr. Rep. 1; Thomas v. Woods (1909) 173 Fed. 585, 97 C. C. A. 535, 23 Am. Bankr. Rep. 132; Staunton v. Wooden (1910) 179 Fed. 61, 102 C. C. A. 355, 24 Am. Bankr. Rep. 736; In re Dempster (1909) 172 Fed. 353, 97 C. C. A. 51, 22 Am. Bankr. Rep. 751; In re Muncie Pulp Co. (1907) 151 Fed. 732, 81 C. C. A. 116, 18 Am. Bankr. Rep. 56; Guardian Trust Co. v. Kansas City Southern Ry. Co. (1909) 171 Fed. 43, 96 C. C. A. 285; In re Granite City Bank (1905) 137 Fed. 818, 70 C. C. A. 316, 14 Am. Bankr. Rep. 404; Markson v. Heaney (C. C. 1871) 4 N.