Opinion · Supreme Court of the United States

McHenry v. La Société Française D'Épargnes

McHenry v. La Société Française D'Épargnes, 95 U.S. 58 (1877)

Type
Opinion
Court
Supreme Court of the United States
Jurisdiction
Federal
Date
1877-11-18
Topic
general

Mr. Chief Justice Waite delivered the opinion' of the court. ■ In Claflin v. Houseman, 93 U. S. 130, we decided that, under tbe law as it stood previous to the adoption of tbe Revised Stafcútes, tbe courts of tbe United States did not have exclusiye jurisdiction of suits for tbe settlement of conflicting claims to property belonging to tbe estate of a bankrupt, and that an assignee in bankruptcy might sue in a State court to collect the assets. In Mays v.

Citator

UpLaw has not yet analyzed McHenry v. La Société Française D'Épargnes. The absence of a flag is not a finding that it is good law.

Cited by
20 opinions

Headnotes

  1. Bankruptcy Law — Jurisdiction Suits for the settlement of conflicting claims to property belonging to the estate of a bankrupt are not within the exclusive jurisdiction of the federal courts, and an assignee in bankruptcy may sue in a state court to collect the assets of the estate.
  2. Bankruptcy Law — Jurisdiction Where a statute confers jurisdiction on the circuit and district courts of the United States for the benefit of an assignee in bankruptcy in certain classes of actions, that jurisdiction is concurrent and does not divest the state courts of their existing jurisdiction over such actions.
  3. Bankruptcy Law — Effect of Proceedings on Pending Suits The bankruptcy of a party's adversary does not deprive a claimant of existing rights, and the courts in which a contest over real or personal property is pending remain open to the claimant; the jurisdiction of those courts is not divested by the bankruptcy proceedings.
  4. Bankruptcy Law — Secured Claims A creditor holding a debt secured by mortgage who proves the claim against the bankrupt's estate is admitted as a creditor of the general estate only for the balance of the debt remaining after deducting the value of the mortgaged property, to be ascertained by agreement, sale, or in such other manner as the bankrupt court may direct.
  5. Bankruptcy Law — Duties of the Assignee An assignee in bankruptcy is not required to take measures for the sale of mortgaged property unless its value exceeds the incumbrance; his duties relate chiefly to unsecured creditors, and he need not concern himself with incumbered property unless something may be realized from it for their account or unless it becomes necessary to do so to ascertain the secured creditor's rights in the general estate.
  6. Bankruptcy Law — Adjustment of Liens Where the assignee undertakes a sale and it becomes necessary to adjust liens before the sale, he may institute the necessary proceedings for that purpose in the courts of the United States or of a state, at his election.
  7. Bankruptcy Law — Secured Claims Where the assignee does not act to make mortgaged property available, a secured creditor who wishes to enforce his security must act himself, and having obtained leave of the bankrupt court to bring his action, he may proceed in a state court if the assignee does not object, or in the courts of the United States, at his election.
  8. Bankruptcy Law — Jurisdiction An assignee in bankruptcy who consents to, rather than objects to, the jurisdiction of a state court over proceedings to enforce a mortgage on the estate's property submits the matter to that court's jurisdiction.
  9. Bankruptcy Law — Objections by the Bankrupt The jurisdiction of a state court over a contest concerning property of the estate is not divested by proceedings in bankruptcy as to the bankrupt and his spouse who alone object to that jurisdiction.
Mr. Chief Justice Waite

delivered the opinion' of the court. ■

In Claflin v. Houseman, 93 U. S. 130, we decided that, under tbe law as it stood previous to the adoption of tbe Revised Stafcútes, tbe courts of tbe United States did not have exclusiye jurisdiction of suits for tbe settlement of conflicting claims to property belonging to tbe estate of a bankrupt, and that an assignee in bankruptcy might sue in a State court to collect the assets. In Mays v. Fritton, 20 Wall. 414, we also held, that if an assignee in bankruptcy submitted himself to tbe jurisdiction of a State court in a suit affecting tbe estate which was pending when tbe proceedings in bankruptcy were commeácéd, be was bound by any judgment that might be rendered. And in Eyster v. Gaff, 91 U. S. 525, Mr. Justice Miller, speaking for the court, said: —

“ The debtor of a bankrupt,’ or the man who contests the right to real or personal property with him, loses none of his rights by the bankruptcy of his adversary.. The same courts remain open to him in such contests, and the statute has not divested those courts of jurisdiction in such actions. If it has for certain classes of actions conferred jurisdiction for the benefit of the' assignee in the Circuit arid District Courts of -the United States, it is concurrent, and does not divest that of the State courts.”.

The principles, upon which those cases rest are decisive of this. The complainant, having a-debt against the bankrupt secured by mortgage, proved the claim against the estate. *60 This, under sect. 20 of the bankrupt law, 14 Stat. 526, Rev. Stat., sect. 5075, admitted the complainant as a creditor, of the general estate only for the balance of the debt after deducting the value of the mortgaged property, to be ascertained by agreement, sale, or in such other manner as the bankrupt court might direct. .The assignee is not required to take measures for the sale of mortgaged property, unless its value is greater than the. incumbrance. His duties relate chiefly to unsecured creditors, and he need not trouble himself about incumbered property, unless something may be realized out of it on their account, or unless it becomes necessary .to do so in order to ascertain the rights of the secured creditor in the general estate. If he does, and it becomes necessary to adjust the liens before his sale, he may, under the ruling in Claflin v. Houseman, institute the necessary proceedings for that purpose in the 'courts of the United States, or of the State, as h.e chooses. If he. does not, the secured creditor who wishes to make'his security available must act; and, Having obtained leave of the bankrupt court to bring his action for that purpose, he may proceed in the State court, if the assignee does not object, or in the courts of the United States, at his election. Here the necessary leave to sue was obtained before the decree was rendered, and the assignee, instead of .objecting to the'jurisdiction of the State court, consented to that mode of proceeding. The bankrupt and his wife alone objected; but as to them, as we held in Eyster v. Gaff, the jurisdiction of the State court .was not divested by the proceedings in bankruptcy.

Judgment affirmed.