Under clause 20 of § 2 of the Bankruptcy Act as added by the
amendment of June 25, 1910, the bankruptcy courts have ancillary
jurisdiction over persons and property within their respective
territorial limits in aid of a trustee or receiver appointed in any
court of bankruptcy.
Property of the bankrupt, when seized by an ancillary receiver
or trustee, is held by virtue of the terms of the Bankruptcy Act to
be turned over to the court of original jurisdiction, and no right
can be acquired in it by assignment subsequent to the petition
which can defeat this purpose.
Under subd.
d of § 60 of the Bankruptcy Act, attorney's
fees for services in contemplation of bankruptcy are specifically
provided for, and are subject to revision in the court of original
jurisdiction and not elsewhere.
In re Wood and Henderson,
210 U. S. 246.
The seizure of property of the bankrupt by an ancillary receiver
is a summary proceeding, and not a plenary suit, and the decision
of the bankruptcy court in the jurisdiction of seizure that an
intervenor claiming by virtue of an assignment of the bankrupts
made after the petition and in payment of attorney's fees must
assert the claims in the court of original jurisdiction is an
administrative order, and the order of the circuit court of appeals
affirming the same is not reviewable in this Court.
A motion to dismiss an appeal from the circuit court of appeals
will not be denied as premature because the record has not been
printed if the record of proceedings in the district court is here
and this Court is sufficiently advised as to the situation of the
case to dispose of it without doing injustice to the parties.
National Bank v. Insurance Co., 100 U. S.
43.
Appeal from 211 F. 326 dismissed.
The facts, which involve the jurisdiction of this Court of
appeals from the circuit court of appeals in certain
Page 234 U. S. 264
classes of bankruptcy matters, are stated in the opinion.
Page 234 U. S. 265
MR. JUSTICE DAY delivered the opinion of the Court.
This is a motion to dismiss the appeal of Lazarus, Michel, &
Lazarus, interveners in a certain bankruptcy proceeding in the
District Court of the United States for the Eastern District of
Louisiana, where the intervening petition was dismissed (205 F.
413), which order was affirmed on appeal to the Circuit Court of
Appeals for the Fifth Circuit (211 F. 326). The interveners now
attempt to bring the case to this Court by appeal on the ground
that the judgment of the circuit court of appeals was not final in
the proceeding.
The facts are not materially in dispute, and, as found by both
the district court and the circuit court of appeals, appear to be:
Antonio Musica and Philip Musica were partners in trade under the
firm name of A. Musica & Son, importers of hair in the City of
New York. They had become largely indebted, and on the 19th of
March, 1913, a petition in involuntary bankruptcy was filed in the
District Court of the United States for the Southern District of
New York against the firm and the individual members thereof, and a
receiver was appointed of the bankrupt estate, the partnership and
its members being subsequently adjudicated bankrupts. On the same
day the petition was filed, the bankrupts and Arthur Musica were
arrested as fugitives from justice in the City of New Orleans, and
Lucy Grace Musica was held as a material witness. Upon search,
there was found upon their persons, variously distributed among
them and concealed in divers ways, about $75,000 in money, and
notes, mortgages, and insurance policies amounting in value to some
$50,000 more. Without going into detail, upon the admissions of the
parties, it became perfectly apparent that the property in question
belonged to the bankrupt estate. The District Court for the Eastern
District of Louisiana, upon petition, confirmed the receiver
Page 234 U. S. 266
as temporary receiver of that court, and directed that all the
property be turned over to him, to be transmitted to the trustee or
trustees in bankruptcy of A. Musica & Son, elected and
qualified in the District Court for the Southern District of New
York, to be disposed of under and subject to the orders of that
court.
While the Musicas took the case to the circuit court of appeals,
no appeal has been sued out by them to this Court, and the only
questions here concern the intervention of Lazarus, Michel, &
Lazarus, who, on April 28, 1913, filed an intervening petition in
the District Court for the Eastern District of Louisiana, claiming
$15,000 as attorney fees for services rendered the Musicas in the
proceedings against them in the courts of Louisiana to protect
their property rights and possession, and for services to be
rendered in representing them in proceedings in New York, if their
services were there required. The decree of the district court,
which was affirmed in the circuit court of appeals, dismissed the
petition in intervention of Lazarus, Michel, & Lazarus,
reserving their right to assert whatever claim they may have in the
bankruptcy & Lazarus, reserving their right to assert
The filing of the petition and adjudication in the bankruptcy
court in New York brought the property of the bankrupts, wherever
situated, into
custodia legis, and it was thus held from
the date of the filing of the petition, so that subsequent liens
could not be given or obtained thereon, nor proceedings had in
other courts to reach the property, the court of original
jurisdiction having acquired the full right to administer the
estate under the bankruptcy law.
Muller v. Nugent,
184 U. S. 1;
Acme Harvester Co. v. Beekman Lumber Co., 222 U.
S. 300. Under clause 3 of § 2 of the Bankruptcy Act of
1898, 30 Stat. 544, c. 541, the receiver in the original case would
have had the right, acting under authority of the court, to take
possession in a summary
Page 234 U. S. 267
proceeding of the bankrupts' property, found, as was this, in
possession of those admittedly holding it for the bankrupts, and to
hold the property until the qualification of the trustee, or until
the bankruptcy petition should be dismissed, if that should happen.
Bryan v. Bernheimer, 181 U. S. 188;
Mueller v. Nugent, supra. Prior to the amendment of June
25, 1910, 36 Stat. 838, c. 412, this Court had held that, in cases
where the bankruptcy court of original jurisdiction could itself
make a summary order for the delivery of property to the trustee or
receiver, the court of ancillary jurisdiction could do so
(
Babbitt v. Dutcher, 216 U. S. 102),
and by clause 20, added to § 2 by the amendment of June 25, 1910,
the bankruptcy courts were specifically given ancillary
jurisdiction over persons or property within their respective
territorial limits in aid of a trustee or receiver appointed in any
court of bankruptcy. Under this amendment, there can be no question
that the district court in Louisiana had authority to appoint a
receiver, and to take summary proceedings for the restoration of
the bankrupts' estate, which was in the custody of people having no
right to it, in order that the same might be turned over to the
bankruptcy court having jurisdiction for administration. Under the
circumstances here shown, there can be no question that this
authority was properly exercised in this case.
The property, when seized, was, by virtue of the terms of the
bankruptcy act, held for and to be turned over to the court of
original jurisdiction, and no right could be acquired in it by
assignment subsequent to the filing of the petition which would
defeat this purpose. Such assignment was a mere nullity, properly
disregarded by the bankruptcy court, and notwithstanding which it
could direct the delivery of the bankrupts' property to the
receiver by summary order.
Babbitt v. Dutcher, supra.
There is no contention that Lazarus, Michel, & Lazarus had any
lien upon this property at the time of the apprehension
Page 234 U. S. 268
of the parties and the seizure of the property. Whatever rights
they had are asserted to arise by virtue of the assignments made
April 1, 1913, and after the filing of the original petition in
bankruptcy.
For an attorney fee for services to be rendered in contemplation
of bankruptcy, the act makes specific provision in subdivision
d of § 60, and the amount thus attempted to be used in
contemplation of bankruptcy proceedings is subject to revision in
the court of original jurisdiction, and not elsewhere.
See In
re Wood and Henderson, 210 U. S. 246.
The contention of the appellants, and the proposition upon which
they rely to sustain jurisdiction in this Court, is that, by their
intervention in the proceeding in the United States district court
in Louisiana, they initiated a controversy in the bankruptcy
proceeding which is appealable to this Court from the circuit court
of appeals, as are ordinary cases in equity where original
jurisdiction does not rest on diverse citizenship entirely
(Judicial Code, § 128). To maintain that proposition,
Hewit v.
Berlin Machine Works, 194 U. S. 296;
Coder v. Arts, 213 U. S. 223;
Knapp v. Milwaukee Trust Co., 216 U.
S. 545;
Houghton v. Burden, 228 U.
S. 161, and cases of that character are cited. In those
cases, it was held that controversies arising in bankruptcy, in the
nature of plenary suits, concerning property claimed by others than
the bankrupt, do not come under the special provisions of the
Bankruptcy Act governing petitions for review and appeals, but take
the course of ordinary cases in equity, and are not final in the
circuit court of appeals where other cases of a similar character
would not be.
The Bankruptcy Act provides for review under § 24b of
administrative orders and decrees in the course of bankruptcy
proceedings which are not made specially appealable under § 25a.
And controversies arising in bankruptcy proceedings, of the
character of which we
Page 234 U. S. 269
have spoken, under § 24a, are appealable like other equity
cases.
See In re Loving, 224 U. S. 183. In
this case, the merely ancillary jurisdiction invoked in the seizure
of this property in the hands of those holding it for the bankrupts
was in a mere summary proceeding in bankruptcy, and its character
could not be changed or its jurisdiction enlarged, by the attempted
intervention of Lazarus, Michel, & Lazarus under alleged
assignments of the property, made after the filing of the petition
in bankruptcy proceedings in the original case. We think the
district court was right in holding, and the circuit court of
appeals right in affirming its decision, that whatever claim
Lazarus, Michel, & Lazarus had under the circumstances here
shown must be asserted in the court of original jurisdiction. The
attempted intervention in the ancillary proceeding did not give
jurisdiction over a controversy in bankruptcy appealable under the
Judicial Code to the court of appeals, and thence to this Court.
This conclusion must result in the dismissal of the attempted
appeal here.
It is contended, however, that this motion is premature, because
the record in this case has not been printed. It is true that
ordinarily such motions, made before the record is printed, must be
accompanied by a statement of facts upon which they rest, or by
printed copies of so much of the records as will enable the court
to understand the case. Under the present practice, it is
permissible to file the record printed in the court below, and we
have a printed transcript of the proceedings in the district court.
In this printed record, matters which the briefs do not dispute are
shown, and we think we are sufficiently advised as to the situation
of the case to dispose of it now without doing injustice the the
parties.
National Bank v. Insurance Co., 100 U. S.
43.
We reach the conclusion that this appeal must be
Dismissed.