In re Donnelly

5 F. 783, 1881 U.S. Dist. LEXIS 23
CourtDistrict Court, D. New Jersey
DecidedJanuary 8, 1881
StatusPublished
Cited by2 cases

This text of 5 F. 783 (In re Donnelly) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Donnelly, 5 F. 783, 1881 U.S. Dist. LEXIS 23 (D.N.J. 1881).

Opinion

Nixon, D. J.

This is an application to the court to vacate and sot aside the adjudication of bankruptcy made in the case for lack of jurisdiction.

It appears that the alleged bankrupts, Donnelly & Hughes, carrying on the business of butchers in the city of Paterson, New Jersoj, on the eleventh day of July, 1877, purchased of the petitioner, Willard E. Dudley, at Jersey City, 27 head of cattle, at the price of $1;941.70, paying for the same in their checks, payable some days after date; that the cattle were driven over to the city of New York and slaughtered, and sold in tho Washington market, on the next night after the purchase, to various purchasers, for such prices as could bo obtained for the same; that the said Dudley, being advised of these proceedings before the proceeds of the sale [784]*784of the slaughtered animals had been paid over to the bank rupts, to-wit, on the thirteenth of July, 1877, caused a writ of attachment to 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 subsequently 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 obtained by the plaintiff in attachment, in which a writ of execution was issued September 20, 1877; that, before he paid, said moneys to the plaintiff, one John P. Brothers claimed that the defendants had been adjudicated bankrupts, as of the twentieth of July, 1877, and that,he had been duly appointed assignee in bankruptcy, and that, as such assignee, demanded all the moneys in his hands which he had collected in said attachment proceedings; that the said Brothers afterwards made application to the court for an order upon the sheriff requiring him to pay over said moneys, and that, pending the said application, the sheriff paid into the court $2,130.08, the amount of the judgment in attachment, and the accrued interest to the date of said payment, November 22, 1877.

It further appears that Judge Lawrence decided that the assignee was entitled to the money as assets of the bankrupt’s estate; that an appeal was táken to the general term from his decision; but, before any hearing upon the appeal, the same was withdrawn by consent, and the respective parties entered into a written agreement that out of the moneys in controversy there should be first paid to Dudley, the petitioner, the sum of $330 for the costs and expenses of the attachment proceedings, and that the residue thereof, amounting to $1,800.08, should be paid to Brothers as the assignee of Donnelly &\Hughes; but the said payments were made upon the express understanding and agreement “that the arrangement should in no manner or way prejudice any rights, claim, or ownership which the plaintiff, Willard E. Dudley, .may have upon or to the said $1,800.08,” and upon the stipulation on the part of the assignee that the question of the [785]*785ownership of the said money may be determined by motion or rale, made by or on behalf of the said Dudley, in the district coxirt of the United States for the district of New Jersey, and that the assignee should waive any objection to the right of the court to determine it summarily.

On the sixteenth of April, 1878, Dudley filed his petition in this court, setting forth the foregoing facts, and praying that the assignee show cause why he should not pay the said $1,800.08 to the petitioner.

The assignee answered the petition, claiming the right to retain the money or assets of the bankrupt estate for the benefit of the general creditors. Evidence was taken, upon a reference to the register having the bankruptcy proceedings in charge; but before the case came before the court for hearing upon the merits, to-wit, November 30, 1880, the ^petitioner filed another petition here, setting up that Brothers had no claim upon the fund, for the reason that he was not the assignee of Donnelly & Hughes, the adjudication in bankruptcy against them being void for want of jurisdiction of the court over the case. It is insisted that this is a jurisdictional matter, and as such takes precedence of all other matters, and that it may be raised at any time by any one who is party to the bankruptcy proceedings. This seems at once to suggest the question whether a creditor of a bankrupt, who has obtained a preference over other creditors by proceedings in attachment against his debtor, will be allowed to come in by petition and contest the validity of the adjudication in bankruptcy. Such a question is decided by ascertaining who are parties to a creditors’ petition. Some of the bankrupt courts have held that only the petitioning creditors, on the one part, and the bankrupt on the other, are properly parties to the proceedings, (see Karr v. Whittaker, 5 N. R. R. 123; Boston, H. & E. R. R. 5 N. B. R. 232; In re Bush, 6 N. B. R. 179;) while others have maintained “that an involuntary petition partakes of the nature of a proceeding in rem, in which all the creditors of the bankrupt have a direct interest, and hence are entitled to be heard whenever they can satisfy the court that their rights as creditors are to be affected by [786]*786the proceedings. See In re Boston, H. & E. R. R. 6 N. B. R. 209; Fogerty v. Ginty, 4 N. B. R. 451; In re Derby, 8 N. B. R. 106. I think the latter to be the better opinion, and that the proceeding in this case is maintainable by the attaching creditor, whose lien is divested by the adjudication by the 'express terms of the law.

Various grounds are alleged in the petition, and were urged in the argument at the hearing, why the proceedings should be dismissed for want of jurisdiction by the court, but only one seems to have been urged with confidence by the counsel for the petitioner, to-wit, that the creditors’ petition in bankruptcy, and also' the debts of the petitioning creditors, were verified before a notary public, and that the notary failed to affix to the deposition and proofs his notarial seal. It might, perhaps, be a sufficient answer to the objection to say that the affidavits and proofs were not taken until the month of July, 1877, and that the congress of the United States, on the fifteenth of August, 1876, (19 St. at Large, 206,) passed an act authorizing notaries public “to take depositions, and do all other acts in relation to taking testimony, to be used in the courts' of the United States, [and] to take acknowledgments and affidavits, in the same manner and with the same effect as commissioners of the United' States circuit courts may now lawfully take or do.” The bankrupt law, as originally enacted, provided that the petition and inventory, in voluntary eases, should be verified by the oath of the petitioner, taken either before the district judge, or the register, or a commissioner of the circuit court. It did not, in terms, require any verification of the petition in involuntary cases; but the supreme court, in preparing the terms of proceedings, and in analogy to the provisions of the act in voluntary cases, required a verification of an involuntary petition by the same officers.

The twentieth section of the amendment of June 22, 1874, authorized notaries public to take proof of debts against the estate of the bankrupt, stipulating, however, that such proof should be certified by the notary and attested by his signature and official seal. The above-recited act of August 15, [787]

Free access — add to your briefcase to read the full text and ask questions with AI

Related

In re Day
22 F. Supp. 946 (D. Maryland, 1938)
In re Bellah
116 F. 69 (D. Delaware, 1902)

Cite This Page — Counsel Stack

Bluebook (online)
5 F. 783, 1881 U.S. Dist. LEXIS 23, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-donnelly-njd-1881.