the case, to throw il.uYldoubt upontheiactua.l ,gobd,falthof 1 tbe i def&ndant in'· oocupying, lmpr'oving,a;nd tax6il on the, land .for over thirteen: yeare;:and I think'his'titll8 by adverse pOBsEl8siongPed. Finding,> "Judgment fOr the de· fendant." > ", 1;[: . l'l'_d 1 _; I ,
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In re, DONNBLLtand : · ! . .:. "
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" The creditor!ofan'involuntary bankropt"who hits obtained a pr'ef1 erence;ov'erot]wr crewtofs by proCll,Cdirigaib. · debtor, P0Dl,6 ,in, py ans\ of the in bank11lptcy. ' . , , , ': _ -
2. SAME-JURISDIOTION-DEFECTIVE VERIFICATION:' j ,'The failure of 'a ndtary to'alb of a ,!WtitjQI}j::8lJd,.tbe pJ:()ofS of ,debtll!Of: ,case of :UP,t. court.-[ED. I I '" '. ;' " '," J) I . " , . tj: !':. d
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. In Bankrupt,oy. ; On application to; proceedings.
set "aside :bankrttpte.)t ' ,:,1 'f 'il "ij',,(l
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. Jvhn Schamp, for assig!1ee ,a.nd'Iietitbiooing NIXON, D.J. ,This iBlliuappiJica.tiontt> jlnd set aside ,the case for jurisdiction. " I "d I"i,; J 'i',' hfll f,;i,f;:': 'h' It appears..that H1Iigl'iosJ carrying on thebusirles8; of, btl toh.!rs ,iti' thi;l' nity.of,PJll.tersofi; New Jersey, Qn theleleventh 'day'of ITIiI;ti the:; petitioner, Willard'E.Du;dley I at ca.ttle, at the, price of ipayitlg £ot·,the, !SlLnill\:bi their. ohecks, .payaba,e somell daYBiafter:diate ;'?th;ltl!tha( bSit1 tIe were driven over'to the city! 'of :NeWi,York" tered, and; sold in after the ,pur.chils0\ to ;f0:v'3ueh 15rieesJ:8.$ {louId be obtlJoiried [otth>e(lmme ;,iihat :the! saridI 'Ul1icrW1Y./beiiE'g advised of these, proceedings' ibef(>tl:Ltfie tyJ1(5feeda J@f
'784
FEDERAL REPORTER
of the slaughtered animals ,had been paid over to the bank rupts, to-wit, on the thirteenth .of July, 1877, caused a writ of·a,ttachmentto issue,out of the supreme court' of New York against Donnelly & Hughes" directed to the sheriff of the city and county of New York, who. f,)ubsequently 'made a return that by virtue of the said attachment he collected certain moneys that appeared to belong to the debtors, Donnelly & Hughes; that whilst holding the same a judgment was obin attilChment, ipwhiqh a writ of exetained by cution was 20, 1877; .that,L he paid, said moneys'to the plaintiff, one J ahn P. Brothers claimed that the defendants had been adjudicated bankrupts, as of the twentieth of July;' 1877, and tht he ha,dbeen duly ap: pointed assignee in bankruptcy, and that, as demanded all the moneysiu pis' he '001lected in said afterwp.rds made application, to the c.ourt for ,!lin order. upon the sheriff requiring him to pay over,saidmOrieys, and that. pending thesaia'application, the sheriff paid into the. cburt $2,180.08, the amount of the judgment in attachment, and the; accrued interest to' the date of said payment, November 22, 1871. It further ,appearathat Judge Lawrence decided that the assignee wltfl .entitled to the money as assets of the bankestate ;thata:nappea1wAs taken to the general term . from his decision; but, befor&,any hearing upon the appeal. the same was withdrawn by oonsent, and the respective parties entered,i:n.to a writtenagraement that. out bf the moneys in controversy there should be first paid to Dudley, the petitioner, the aum of $-380 'for, the costs ande!X:penses' of the attachm6Iltproceedinga, .anp that the residue thereof, ing·to $l,SOO.OS, paid to Brothers as; ,the assignee ,the said payments were made upon therexpressunderstanding and agreement"that the ar* in,;nQ manner or way prejudice' any rights. cAaim" oro-wnership .whiohtbe ,plaintiff, Willard E. Dudley, ,may,b,siv,$ upon or to the said and upon the stipulatioll! llln ,the of the assignee that the question of the · ' . : 1.,:J 1", '" i'." "
IN ..RE DONNELLY.;
'185
ownership Of the said money may be' determined by motion or rule, made by or on behalf, of 'the said Dudley,in: the district court of the United States for the district of N,ew Jersey, and tbat the assignee should waive any objection to the right of the court to determine it summarily. ,',' On the sixteenth of April, 1878, Dudley filed,bis ;petition itt this setting forth the foregoing facts,. and 'ptaywhy he 'should, not,pay' the ing that the assigpeeshow said $1,800.08 to the petitioner. " "i' The assignee answered the petition, claimirig the right ,to 'retain the money or assets Of the bankrupt;; estate: for the ,benefit of the' generalcreditors.J EvidlmCetwas upon. a reference tothe"lo:egister 'having ithe bllJDknuptoyproceedings .in charge; but be-fOlie the' :&lise came before'the:court itor hearing upon the merits, to-wit;- November 30,. '1880, the petitioner filed' another petition here; settiJ;lg.up that Brothers had no claim upon the fund, for, the reason that he was-llClt the'assignee of :Do;nnelly & the adjudication in bankruptcy against them being voidfbr want of ju:risdiction of the court over the case., It isinsisted that this is a jurisdictional matter, and 0.8 such takes precedetlCe of all other matters, and that it may be raised at any time by anyone who is party to the bankruptcy proceedings. This seems at once to suggest the question whether a creditorof'a bankrupt, who has obtained a preference o,ve,r other creditors by proceedings in attachment aga..insthis debtor, will be by petition and contest the validity of the adjudication in bank. ruptcy.· Such'a question is decidedbyltsoertaining who are parties to aereditora'petitiop.. Some. of the bankrupt courts have held that only the petitioning on the one part, and the bankrupt on p.rope,rlypartiesto the proceedings, (see Karr v.' Whittaker, ,Jj N.B. R. 123 ; Boston, H. cf; E. R. 5 N. B. R. 232; In re Buak,6 N. B. R. 179;) .while others havem.aintained ithat ,an inVOluntary petiti{)D 'partakes of the nature oLa;: proceeding in -rem, in 'which· all· the dreditors of. the bankrupt. ha Vc6: ,a, direct and hence' are' entitled to be' heard whenever they can satisfy the court that their rights as creditors are to be affected by v.5,no.9-50
786 In rcBoston, H.d B, R. R. 6 N. B. E: '209jFogcrty v. iGinty,.!! N.B. R. 461; In re Derby, 8 N. ,B.'R.106. I think the latter to be the better opinion, and 'tlu.tt the proceeding in this ;oase is maintainable by the
taching creditor, lien is divested by the adjudication -by the :&Xpress terms, of the law. , Various grounds are alleged in the petition"and were urged in tl)e:,argumant at the hearing, whythelprooeedings should be dismissed for want of jurisdiction by the court, but only cone seems to ,have been urged with confidence by the oonnsel for the petitioner, to·wit, that the creditors' petition ruptoy,and also the debts: of the petitioning cr.editors, were 'verifiedbefol;eanotary public, and that· the notary failed to ..affix to the depol!lition and proofs his notarial seal. It:J:night, perhapl!l,t be ti, sufficient, answer to the 'objection ,to say that the affidavit!l and proofsweJ!e not taken until the moIith ,of .July, 1877, and: that the' oongress of the United States, on' the fifteenth' of August, 1876, (19 St. at Large, 206,) passed an :act a,uthorizmg,:I).otariespublic "to take depositions, and do !allothElr act!:3in relation to taking testimony, to be used in ;the courts of, the United States; [and] to take acknowledgments andaffidaw.ts, 'in the s/tme manner and with tbesame ·effectas oommissioners of the United Statel!lcircuit courts may now lawfully taKe, or do." The bankrupt law, as originally ,enacted, provided that the petition and 'inventory, in yoluntary cllises,shbnld be verified 'by' theoairh of thepeti·tioner, taken eithe:r'befdta' the district' judge" 'or 'the register, ilr a commissioner of ,t.lie circuit court. !tdid not, in terms, ,l'equire any: verification 'of the. petition in involuntary cases j hut the 8upremecourt;!in preparfug theAe:J:ms of proceedings, :and in analogy. to thepr-ovisions of the actin 'Voluntary .cases, .required: a: verification of an involuntary petition by the same ·. The twentieth section of thea;mendment of June 22, 1874, authorized notariespubHc to take proof oj est8Jte of however, that stwh proof :should be'certified by the 'notary and attested by his . -tnreand official seal. The a!Jo\'e-:'C'c:ted aatf}f' August
, IN RE,D.ONNELLY. \
1876, greatly entarged 'their powers; and from the terms 'of thei :section it iILqtiitemal1ife.St, that cong1'ess j designed to confer upon them the same authority, in regard to taking .tes:-i tin1.6nyandaffid$vita to-bensel}. in the courts of ,the Unit'ed States, as. 'W3,s],then'pos8'essed by tM;commissioners of the circllit court. Thiaat,atute,'unlikethe :a.e;t ofc1874\ is silent as tosuchoflieer.s a.t.testing"theil'acts.by ,their ,official seah It is, ,therefol"6,\tloubtful whether;' in this <iistril1t; -the" courts; of the United' Stllite.s fwoulddeem such aq. attestation ,indis"" pensable,'cspeciall;y,a;s the laws of the state eocpresslyprovide: thai .no: 5hcheeritifica'tion is necessary tOi the validity or sufficiency ;ofany 'oa.trh, affirmation, or affidavit.,i: See 'f Act, rela- , ;§2. ' tive t06athsand,affidavits/' Rev.:St: dwelling upon this view,·r am of;the opinion' thaLthe defeets alluded, to are:matters affecting the ity of, the, proceedings; rather than the jurisdiction of the court. The books are full of cases tothis'·>elIect,althoughit. is admitted that there are some respectable· authofities to the Jurisdiction :dbes, not 4epend' ripon tna manner or the methed of:.verifying either the>petition:orproofs of debt. Ifire Simmons, 10 N. R R.' 2531, In rrei Raynor;, 11 Blatchf. 43; E:x pitrte"Jewett; lIN.B. JR. ,443; In 'te,MdKibbeii, N. B. R; O'l;Inrt llannibel,' 15 R'lRR. 2'37:; ITf re'Rochev. Fore;, B; R. 461;! Inr.eG., W. ;In .re Simmons:,supraj, ,the' late Judge; Longyear,AollowingJ bis previous decision In f'11;McNa:ughton,8. N> B. R. held, that the jurisdiction oftha COlU:t depended upon the verifi'cation of the petition; that the banlp'upt aet not expl!6Ssly xequire any' ¥l3rificatiol1 r in' involuntary caseS'; i. ahchthatill'verifi.cli.tiori 'wl!'slonly neces8any under the' rulea.;aqdregtm..laiions'(1)f the ,supreme coqr,t ipl to found upon :tbe petition; a.n order'U'poD: :the debtor to !S1row:c8ili'Be why. heshduld. not;be'ad.j:udged Ii bankrupt. ,; , ; I 'In re :'RaytidrI supra, :the- late: j uage Woodruff ilistihotly in: timates,by ,biB; whole,couYB6 'of that the 'question of jririsdietion'isqotinvolved:ill'the:method of'signiilg or the maurier 9f' an.tlreriticating,.the"petition in 'bankruptcy, iI1! invol'"
FEDERA.Li REPORTER.
untary eaee!!!; where the petition itself sets 'forth ,all the facts mateJ.'lial to·the-claim made:: by the 'creditors to an adjudication. : In Ex parte Jewett, supra; Judge Lowell repudiates the idea that the jurisdiction of the court is involved in the proper verification of the petition, or of the claims of the petitioning creditors. He says: "The district court has jurisdiction in bankruptcy of every person, residing within the district, who owes $300 of provable debts; and when a paper which purports to be a petition in bankruptcy, and which alleges such residence and indebtedness, is filed, and an order of notice has been duly served, there' is and can be no jurisdictional fact remaining, if the residence and indebtedness to the extent of $300 are admitted. The court may then proceed to allow or refuse amendments, or anything else proper for a court to do that has undoubted jurisdiction of the sub. ject-matter and the parties." In. re D.W. Gitchell, supra, the same question arose before Judge Blatchftlrd, which is presented here, and was UJ;ged as aground for dismissing tqeproceedings·. It was an involuntary case. :T.he' ,petition w,as:filed on the twenty-fifth of ruary, 1875, \before the ,d,dtblf Aughst 15, '1876,oocame a law; Ther.e was:a, :defalllton the return of the rille ttl show cause. 'A.n cadjudication' waili ordered, andean assignee' regularlY appointed,'who proceeded to thamotnth'of November foil'owing a creditorpiesented to the CO'lilirt a petition, praying that ,the adjudication of bankruptcy and the proceedingsthexeunder be vacated,' forthei reason that the original- petition had: been verified before a notary public, an officer not then; qualified to perform such: an act. The learned, judge, ,speaking, of the verification of the petition bya noba:l'Jypublic, said: ",This 'Was irregullllr, but the irregularity did not affect the jurisdiction of th& court. If, before the adjudicatib:nwas'entered, the irregularity had been brought to thenl?tice of the court, it could 'and would have been reme.lied. ,But the question as to whether the petition is verified before· a proper officer is ,one of practice and not of jurisdic-
:INi U'DONNlllLLYi'
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tiO,ljl. It ilj competent for·,the court to decide that it is verified before a proper officer, and" whenthEJ colllrt;! ha.S80 decided, f1,nd. an order of ,adjudication Jhs,s been entered, itisttloHl.te for the debtor, or for any creditor, to raise the question. An order of adjudication is a judgment, and is as effective as any other judgment to cure irregularities in practice which do not touch the jurisdiction of the court." The serious consequences which would result from holding, in conformity with the petitioner's claim, that any irregularity or defect in the preliminary proceedings renders the adjudication void abinitio, 'are forcibiy stated by Judge Woodruff in In re Raynor, 8upra. No title to real estate,' acquired under' bankruptcy proceedings, would be safe; to extent the bankrupt's property had been administered and distributed, or how many suits ,have been instituted and successfully maintained by the assignee to recover real or personal estate which the bankrupt had, disposed of in fraud of his w.ould belis,bleto be disttirbedandl\lnatany:siage .althe .proceedings, if th!3courfl'is bound' to tJ'eat such· irregularities arid defectsasjurisdiational 'faetsi : ·In,the,present ca.se more than:iliree :years elapnd from:ihe: date of Jadjudioation before any questionw8s 'l·a.ised.l. Intbe meantime the as&gnee,nn:eODsciqus, risk,: and upon the regularityo£ thei.mjndicationand. the 'validity:of dutiel!lot hisappointment,! has; been! pel'fobnmg'generally hispositiorlj 'coniprdmising,)claims, bringing'iactions, and'disl. ",. tributing 'aiSsets.' :, ,;Treating the'36ljudicatioh as void, lie and is' liable as a m-espasser for the honest execution of a trust which ,the .coutt obliged him to perfotm by viriua df: his Such considerations· are not cot1el.uSt\te tion ,ofthelawcontended'ror,by 'the petitioner; but they afford 'for believing- ;that the' congresS; in very reasonable friming rthe:act; ·nev.ef,iinteluled atf intllrpretationsh()uld be: giv.entQ!itwhiGh' would'lead to such result'S'." It fol1dwB t' fro1nthis"viaw, that any oitregularity 'iIi 'tEll·ilying thE!,tyQtition:,&rthe:d'ebis of; thepetitiOIiing: creditors, may I' , , "
FEDEBaL REPaRTER.
),leJlmended,tmnc',pro if any ,amendment deemed' to make ,the proce-edingi;,cregular..-c' tQ,vacate and set aside :theadjudicatiou. is' deniec{..' .'! ! . ) "J , I
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A discharge in pankruptcy can . the domestic
QREDITOR-DoMESTIC FORUM:,
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to the suit of a foreign, .'
·Demurrer to Plea of Discharge.! ! ',' ; "1; ',Myers IX Arnstein, for demurrer. :MMshall« Barclay,eo7Jtra. -,U3REAT,: D;,J. >:A demurrer is inlerposedtothe answer of' Eickerman, who plea.ds discnarge in baril>!ruptey..The plaintifftillan,ali n,non.resident, insis1ting uponhi$Cdemand against, the defendant I 'and that,a discharge in lawll 'of the United States does not,rllliev6'1the defimdant of plaintiffs, The: r:proposition involved pertains to international. la,wll; 'cQuoernihg which to be no discQm·. If law/!!! as'aJ;riong the states of this country,. cousideredl"' the fullest eJCpo.. : sition of which is given in Cook v. Moffet, 5 How. 307, or, as t9 foreign;demands, inMurra'lv. De RottiYl'hem,. 6J ohmCh. 52, it:will be al!!certain(,)d that the rule is this.: An insolvent. law-, or baI1bup't- law, has n(;): extraterritorial 'force. If,theparty Ilues, ·despitethe:inso!ventor,bankrtipt discharge, in the .law of the forum, he 'must oodeptthe rules perta.ining withtheexeepticw..of,9.11ch modifications as spring from' of out atate and.federalgovernments.. As t'M the laws of the federailgovernment in bankruptcy a.re supxeme,;. a $uffioientj whether the creditor is a ·of a 'state <>thel'tb;an thatinwhi!lh ·the:bfl,nkrupt is a re'sident, or is an alien, a 'resident of a foreign country. Of