IN
BE BRIGHT.
491
ment CRses. These latter cases, not having been removed to thiR court, remain, with all their incidents, in the hands of the state court. We have no to make any decree disposing of property which is within the control of another court of co-ordinate jurisdiction. The state and federal courts of this country, sitting as they do in the same 10calitil3s, and exercising a concurrent jurisdiction over many subjects, have great reason to observe with care the well-settled rule that the court which first gets possession of the subject-matter of a controversy must keep it until the controversy is decided, unless deprived of it by superior authority. In this case there will be a decree setting aside the judgment mentioned in the bill, but no order for the distribution of the fund in the hands of the sheriff. Application for such an order must be made to the state court.
In re BRIGHT, Bankrupt.(District (Jourt, E. D. Pennsywania. November 11, 1881.) 1. BANKRUP'.rcy-DISCHARGE-ASSENT FRAUDULENTLY PROCU£lED-ESTOPPEL.
A creditor, whose assent to the bankrupt's discharge was procured by the promise of a pecuniary consideration, is estopped from afterwards setting up the fraud as a ground of objection to the discharge; but other creditors, upon learning of the fraud, may object to the discharge upon that ground.
Motion for Discharge. The register, to whom was referred the specifications against discharge, reported the testimony, the material parts of which are referred to in the opinion, and recommended the discharge of the bankrupt. A. P. Spinney, for bankrupt. Benj. II. Haines and J. M. Washburne, for creditors. BUTLER, D. J. The specification of objection that Mr. West's procured by the bankrupt, or by Mr. assent to the discharge Torry for him, by means of a pecuniary consideration, is fully sustained by the proofs. Mr. West, when his assent was applied for, demanded $1,000, which thti bankrupt declared himself unable to furnish. Mr. West pointed to the judgments held by Mr. Torry, as a means of securing it. These judgments, which had been entered in Mifflin county as well as in Schuylkill, had simultaneously been sued out in both places; and while it seems that the entire amount due was realized in Schuylkill, $1,000, or nearly so, were collected, and still .Reported by Albert B. Guilbert, Esq., of the Philadelphia bar.
492
FEDERAL REPORTER.
in counsel's hands, in Miffiin. This money in Miffiin was pointe-d out by Mr. West as a means of securing what he required. The suggestion was adopted by the bankrupt; and by arrangement between himself, Torry, and Mr. West, the judgments were transferred, to enable the latter to obtain the money in Miffiin county. After the assent was thus obtained, it was discovered tha.t this money, (which, it would seem, should have passed to the assignee in bankruptcy, as the property of the bankrupt,) had previously been transferred by Mr. Torry to others, on the bankrupt's account. Mr. West, in consequence, realized nothing on his transfer. This latter fact, however, is unimportant. His· assent was obtained by means of the pecuniary consideration held out. That this consideration failed, and he was disappointed, is immaterial. He fully expected to obtain the money; and it is quite probable the bankrupt and Torry united in this expectation, for the former testifies that he did not know of the previous transfer, and the latter says he had forgotten it. In the assignment it is expressly stated that no such previous transfer had been made. I have no doubt that both West and the bankrupt expected the money to be paid on the transfer to West. West certainly did. \Vhether the bankrupt did or did not is immaterial; he held out this consideration, and by means of it obtained the assent. Still, if Mr. West alone appeared to resist the discharge we would hold him estopped, as respects this objection. Being a party to the fraud, we would not permit him to set it up, in his own relief. He complains only because he did not succeed in obtaining the unfair advantages which he sought. If he had received the money he would have been satisfied, and allowed his co-creditors to suffer from his fraud. But ,vhile the objection will not avail Mr. West, other creditors, who appeared on learning the facts, may urge it. They are not too late. They knew nothing of the fraud until the quarrel between the parties to it revealed the facts. That Mr. West may derive advantage from their interference is unimportant; the bankrupt is not in position to object. Without noticing any other specification presented, it IS sufficient to say that this is fatal. As the case stands the discharge cannot be allowed.
IN ItE JACKSON.
4:93
In re
JACKSON,
Bankrupt.
(DisericteCou.rt, 8. D. New Y urk. November 16, 1881.) 1. INJuKcnoN DISSOLVED-SECTION 5057-LulITATIONS-FRAUDULENT JUDGMENT. An injunction should be dissolved when it can no longer subserve any useful purpose. Where, prior to proceedings in bankruptcy, several executions had been levied on the bankrupt's property, and the sheriff had advertised it for sale thereunder, when he was stayed by injunction issued in the bankruptcy proceedings, but was afterwards allowed to sell and hold the proceeds, subject to the order ofthe court: and after paying certain prior executions, about which there was no controversy, there remained in the sheriff's hands $611, applicable next in order upon a judgment and execution of M.; but it was claimed by the assignee in bankruptcy, and also by certain subsequent execution creditors, that M. 's judgment was fraudulent and fictitious,. and M.'s proceedings under it had been stayed since 1874, and the assignee, though knowing the facts since 1875, had taken no steps to assail M.'s judgment,-held, that the assignee's right to attack M. 's judgment had, under section 5057, long since expired, and that 1he injunction should now be dissolved.
In Bankruptcy. Jas. Armstrong, for the motion. Jas. G. Graham, for the assignee. Darwin W. Esmond, for creditors. BROWN, D. J. Markowitz, the moving creditor, by virtue of a judg. ment, execution, and levy prior to the commeneement of proceedings in bankruptcy, obtained a legal lien upon the goods and chattels of the bankrupt. The goods were under advertisement for sale under this execution, and others, at the time of the filing of the petition in bankruptcy, on December 8, 1874. On that day an injunction was issued out of this court in those proceedings, restraining further proceedings by the sheriff. Afterwards it was so modified as to permit the sheriff to sell all the goods and chattels of the bankrupt levied on, and to retain the proceeds to abide the further order of the court. He was also permitted to pay two judgments prior to that of Markowitz, there being no controversy about them. After paying those judgments and the expenses of sale, a net balance of $611.39 remained in his hands, which was then, and has ever since been, claimed by Markowitz under his judgment of $2,040, which was next in order of lien. Payment to him has been prevented by the original injunction, which, as respects this judgment, has never been vacated, it 1;,leing claimed, not only on behalf of the assignee in bankruptcy, but also in behalf of two subsequent judgment creditors, that that judgment was fraudu· lent and collusive, and designed to give an unlawful preference to Markowitz, who is a brother-in-law of the bankrupt.
