UNITED STATES SUPREME COURT DECISIONS ON-LINE

1. A proceeding under the Bankrupt Act in which by petition in form the assignee sets forth articulately that A., B., C., &c., claim liens against the bankrupt's estate, the validity of each of which liens he, the assignee, denies, and in which he prays that the parties setting up the liens may be made parties, and be required to answer, each of them, all his charges and allegations as made, and be compelled, each of them, to set forth and state in their respective answers the particulars and facts upon which their respective claims are based, and than on final hearing, all questions and rights of each and all the parties may be ascertained and determined by the court, and that the petitioner be directed to sell the estate and distribute the proceeds, and in which the assignee prays that he may have such other and further relief in the premises, and "may be further directed in his duties as the nature of the case requires," in which proceeding the parties asserting the liens answer in form and the assignee replies in form, is a "case in equity" within the eighth section of the Bankrupt Act, which gives an appeal to the circuit court in all cases in equity, and is not a case for the general superintendence and jurisdiction by that court given in the second section of the act, in cases where no provision for the supervision of the circuit court is otherwise made.

2. The fact that a subpoena is not prayed for does not change this view, the defendants voluntarily appearing.

3. If such a case be taken into the circuit court under this general superintending jurisdiction given by the said second section, it is wrongly clubjuris

Page 90 U. S. 151

taken. No jurisdiction exists there so to review the case. And no appeal lies to this Court from the action of the circuit court made under such circumstances to hear and determine the merits.

4. Where a case has been so taken, and the decision reversing the decree of the district court is in favor of the party taking it, this Court will reverse the judgment or decree of the court below and remand the suit with directions to dismiss it.

5. But in the present case, where, owing to the lapse of time, the party who had the decision of the circuit court (reversing that of the district court) against him would be prevented from having, as matter of right, a review of the case by the circuit court on an appeal properly taken under the eighth section, this Court thought it fitting to suggest that perhaps, on a proper application, the district court would grant a review of the decree that it had rendered, which review, if granted, would lay the foundation, in case of an adverse decision, as before upon the merits, for an appeal in proper form to the circuit court.

By the Bankrupt Act it is thus in effect enacted:

"SECTION 1. That the several district courts be . . . courts of bankruptcy, and shall have original jurisdiction in their respective districts in all matters and proceedings in bankruptcy. . . . And the jurisdiction shall extend to all cases and controversies arising between the bankrupt and any creditor who shall claim any debt or demand under the bankruptcy, to the collection of all the assets of the bankrupt; to the ascertainment and liquidation of the liens and other specific claims thereon; to the adjustment of the various priorities and conflicting interests of all parties; and to the marshaling and disposition of the different funds and assets, so as to secure the rights of all parties, and due distribution &c."

"SECTION 2. That the several circuit courts . . . within and for the districts where the proceedings in bankruptcy shall be pending shall have a general superintendence and jurisdiction of all cases and questions arising under this act, and except where special provision is otherwise made may, upon bill, petition, or other proper process of any party aggrieved hear and determine the case [as] a court of equity."

"The powers and jurisdiction hereby granted may be exercised either by said court or by any justice thereof in term time or vacation. "

Page 90 U. S. 152

"Said circuit courts shall also have concurrent jurisdiction with the district courts of the same district of all suits at law or in equity which may be brought by the assignee in bankruptcy against any person claiming an adverse interest, or by such person against such assignee touching any property or rights of property of said bankrupt, transferable to or vested in such assignee."

"SECTION 8. That appeals may be taken from the district to the circuit courts in all cases in equity, and writs of error may be allowed to said circuit courts from said district courts in cases at law &c., when the debt or damages claimed amount to more than $500; and any supposed creditor whose claim is wholly or in part rejected, or an assignee who is dissatisfied with the allowance of a claim, may appeal from the decision of the district court to the circuit court; but no appeal shall be allowed unless it is claimed and notice given &c., within ten days after the entry of the decree or decision appealed from. No appeal shall be allowed unless the appellant shall give bond in manner now required by law."

"SECTION 9. That in cases arising under this act, no appeal or writ of error shall be allowed in any case from the circuit court to the Supreme Court of the United States unless the matter in dispute in such case shall exceed $2,000."

In this state of statutory law, one Vandeveer having been decreed a bankrupt in the District Court for the Northern District of Ohio, a certain Stickney, his assignee, filed a petition against him, Huss, Wilt, Paine, Adams, and two others, to determine whether certain claims set up as liens upon the bankrupt's estate were liens.

The petition set forth the decree of bankruptcy against Vandeveer. It then alleged:

1st. That at the time thereof he owned a tract of land which he had bought from Mrs. Adams, and that she set up a vendor's lien upon it, which lien the assignee alleged had no existence.

2d. That another tract which he owned purported to be encumbered by a mortgage to Paine to secure a note of $4000, but that no debt was due to Paine, and that the mortgage had no legal validity as against him the assignee. clubjuris

Page 90 U. S. 153

3d. That he had given a note and mortgage to one Huss for $4000, which note and mortgage were never delivered to Huss, but were recorded by Vandeveer, at about the time of their execution, without the solicitation or knowledge of Huss, and that they were void.

4th. That the petitioner had been advised that one Wilt also claimed some kind of lien upon the said lands, but how or by means of what mortgage or otherwise the petitioner was not advised, but denied that any such lien or liens were so held or existed in favor of any person or persons whomsoever.

The petition prayed:

"That the parties above named, and each of the them may be made parties defendant to this petition; that they and each of them be required to answer all and singular the charges and allegations aforesaid, and be also compelled to set forth and state in their respective answers hereto, each, the particulars and facts upon which any claim is made or based by such defendant or defendants; and that, on the final hearing hereof, all questions and rights of each and all the said parties may be ascertained and determined by this court, and that, by the order and judgment of this court, the petitioner be directed to sell the said lands and distribute the proceeds accordingly."

"And that the petitioner may have such other and further relief in the premises and may be further directed in his duties, as the nature of the case requires."

The petition did not pray for subpoena or other process.

Mr. and Mrs. Adams, as also Paine, waived it, however, and appeared. Wilt also appeared and answered.

Referring to the note and mortgage mentioned in the bill as given to Huss, and admitting their execution and record, Wilt alleged in his answer that he, Wilt, afterwards became surety for Vandeveer, for $3,260, and that in consideration of such suretyship, Vandeveer delivered the said note and mortgage to him, and that he had paid over $2,000 on account of such suretyship.

The assignee replied, denying that Vandeveer delivered the mortgage to Huss, and that Wilt had become surety, and clubjuris

Page 90 U. S. 154

denying payment by him, and all debt to him by Vanderveer &c.

Upon the hearing of these issues, the district court held that the mortgage never took effect, and decreed accordingly in favor of the assignee in bankruptcy.

Wilt thereupon filed his petition in the circuit court of the district for a review and revision of this decree under the first clause of the above-quoted section of the Bankrupt Law, which gives to the circuit court a general superintendence and jurisdiction of all cases arising under the act. [Footnote 1] He set up the same case in the circuit court which he had made in the district court, and prayed a reversal &c.

Without answering this petition, the assignee filed a plea to the jurisdiction of the court.

Upon the petition and plea the cause was heard, the petition sustained, and relief decreed as prayed for -- that is to say, the lien claimed by Wilt was decided to be a good one.

The assignee hereupon appealed to this Court as if thereto authorized by the Act of Congress, allowing appeals in cases of equity and maritime jurisdiction, [Footnote 2] which act enacts that from

"all final decrees rendered in any circuit court in any cases of equity or admiralty jurisdiction, an appeal, where the matter in dispute, exclusive of costs, shall exceed the sum or value of $2,000, shall be allowed to the Supreme Court of the United States, and that upon such appeal a transcript of the libel, bill, answer, depositions, and all other proceedings, of what sort whatsoever, shall be transmitted to the said court."

The record in the case, as sent here, contained sufficient extracts from the record to understand the case, but did not comply literally with the act just quoted. This defect, however, was not alluded to at the bar. clubjuris

Page 90 U. S. 158