Munroe v. Raphael
288 U.S. 485 (1933)

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U.S. Supreme Court

Munroe v. Raphael, 288 U.S. 485 (1933)

Munroe v. Raphael

No. 407

Argued February 7, 1933

Decided March 13, 1933

288 U.S. 485

Syllabus

In a suit in the District Court to turn assets to account of all creditors ratably, the receiver, by leave of court, sold all the assets, taking in lieu the purchaser's agreement to pay a specified percent of all proved claims, secured by his bond running to the United States. The purchaser having defaulted, one of the creditors,

Page 288 U. S. 486

who had proved his claim, obtained leave of the federal court to sue the obligors on the bond for the agreed percentage of his claim, in a state court, and brought suit accordingly in the name of the United States and obtained an attachment of the obligor's property, and ultimately a judgment. The receiver meanwhile, by an ancillary bill in the federal court, sought to collect the entire amount of the bond for the benefit of all the creditors.

Held:

1. That the bond took the place of and represented the estate for distribution by the federal court. P. 288 U. S. 488.

2. By granting the single creditor leave to sue on the bond in the state court, the federal court did not part with its jurisdiction over him or the subject matter. P. 288 U. S. 489.

3. An order of the federal court restraining further prosecution of the suit in the state court was a lawful exercise of its jurisdiction. P. 288 U. S. 489.

60 F.2d 16 reversed.

Certiorari, 287 U.S. 591, to review the reversal of an order of the federal court in a receivership proceeding which rescinded permission previously granted a creditor to sue in a state court and enjoined further prosecution of the suit.

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