Marshall v. Knox

83 U.S. 551, 21 L. Ed. 481, 16 Wall. 551, 1872 U.S. LEXIS 1183
CourtSupreme Court of the United States
DecidedApril 28, 1873
StatusPublished
Cited by76 cases

This text of 83 U.S. 551 (Marshall v. Knox) is published on Counsel Stack Legal Research, covering Supreme Court of the United States primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Marshall v. Knox, 83 U.S. 551, 21 L. Ed. 481, 16 Wall. 551, 1872 U.S. LEXIS 1183 (1873).

Opinion

Mr. Justice BRADLEY

delivered the opinion of the court.

The first question is, whether the decree dismissing the bill for want of jurisdiction was rightly made, and this is to be solved by reference to. the second- section of the Bankrupt Act. By this- section it is declared that the Circuit Courts “shall have a general superintendence and jurisdiction of all cases and questions arising under this act; and, except when special provision is otherwise made, may, upon bill, petition, or other proper process, of any party aggrieved, hear and determine the case as in a court of equity.” By a subsequent clause of the same section it is declared that said courts “shall have concurrent jurisdiction with the District Courts ... of all "éuits at law or in equity ... by the assignee against any person cláiming an adverse interest, or by such person against such' assignee, touching any property, or rights of property, of said bankrupt, transferable to or vested in such assignee.”

The first clause confers upon the Circuit Courts that-supervisory jurisdiction which may be .exercised in a summary manner, in term or vacation, in court or at chambers, and upon the exercise of which this court has decided that Jt has no -appellate jurisdiction. *

*555 The second clause confers jurisdiction by regular suit, either at law or in equity, in the cases specified; that is, in controversies between the assignee and persons claiming an adverse interest, touching any property of the bankrupt.

The present case is in form a regular bill in equity; but it also asks a revision of the action of the District Court in the premises. As an original bill in equity it cannot stand, if the District Court had jurisdiction to proceed as it did; for the matter was already decided in that court. As a bill to review the proeee lings and decision of the District Court, it was a very proper proceeding, and ought to have been entertained by the Circuit Court. The revisory jurisdiction of the Circuit Court may be exercised by bill as well as by petition; and as this bill complains of the action of the District Court, and asks for a review and reversal thereof, the Circuit Court erred in dismissing it for want of jurisdiction. But regarded as a bill of review, we could not, according to-our decision in Morgan v. Thornhill, entertain an appeal from the decision of the Circuit Court in the case.

The appeal, therefore, must be dismissed, unless it can be shown that the District Court proceeded without jurisdiction. If this-were the case, then the bill may be regarded as an original bill, of which the Circuit Court clearly had jurisdiction, and the appeal to this court was properly taken.

The case here, then, depends on the question whether the District Court had jurisdiction to proceed by rule as.it did. The goods, it has been seen, were ip the custody of the sheriff, under a writ of provisional seizure, and held as a pledge for the rent of the lessor. The seizure had been made before the bankruptcy. The landlord claimed the right thus to hold possession of them until his claim for rent was satisfied. This claim was adverse to that of the assignee. The case presented was one of conflicting claims to the possession of goods; and the sheriff hadjjreseut possession for the benefit of the lessor. Neither the sheriff nor the lessor was a party to the proceedings in bankruptcy. No process had been served upon them to-make them such. *556 They were not before the court; and the court had no control or jurisdiction over them.

Under these circumstances the assignees applied for and obtained from the District Court, a rule on the lessor and sheriff to deliver the goods to them. Had the court authority to make such a rule? Could such a rule be characterized as due process of law?

The bankrupt law does not distinguish in what cases the District Court may proceed summarily, and in what cases by plenary suit; and we are left to decide the question on the general principles that affect the case. The second section, however, in conferring jui’isdiction on the Circuit Courts, uses this language: “Said Circuit Courts shall also have concurrent jurisdiction with the District Courts of the same district of all suits at law or in equity, which may or shall be brought by the assignee in bankruptcy against any person claiming an adverse interest, or by such person against- such assignee, touching any property or rights of property of said bankrupt.” This language seems to indicate that where there is a claim to an adverse interest in the property, a suit at law or in equity will be the mode of redress properly resorted to. The eighth section, in granting appeals and writs of error from the District to the Circuit Court, only does so in eases in equity and at law, and in cases where the claim of a creditor is allowed or rejected. If, therefore, adverse claims to property could be decided by the summary action of the District Court, not only would the party claiming adversely to the assignee be deprived of ■a trial by due process of law, but he would be without appeal. An appeal was in fact denied in this case.

We think that it could-not have been the intention of Congress thus to deprive parties claiming property, of which they we-’e 'n possession, of the usual processes of the law in defence of their rights.

The subject, in one of its aspects, came before this court in ttfe case of Smith v. Mason, .reported in 14 Wallace, 419. Iu that case the adverse claim was to the absolute property of the fund in dispute; not, as in this, to a mere lien, and *557 to possession by way of pledge under the lieu; and we held that the bankrupt- court could not, by a mere rule, make the adverse claimant a party to the bankruptcy proceedings and adjudge his right in- a summary way, but that the assignee must litigate the claim in a plenary suit, either at law or in equity. But it may, with some plausibility, be said that, as the property in this case is conceded to be in the bankrupt, and the question has respect Only to the right of possession under the lien, the District Court, which has express jurisdiction of the “ascertainment and liquidation of the liens and other specific claims ” on the bankrupt’s property, might properly assume control of the property itself. The claim, however, is to the right of possession, and that right may be just as absolute and just as essential to the interests of the claimant as the right of property in the thing itself, and is, in fact, a species of property in the thing just as much the subject of litigation as the thing itself. It is the opinion of the court, therefore, that the case is not substantially different from that of Smith v. Mason. Besides, it has another point, in common with that case, upon which a direct adjudication was made therein. The lessor-in this case was not a party to the bankrupt proceeding; and in Smith v. Mason we held expressly that “ strangers to the proceedings in bankruptcy, not served with process, and who have not voluntarily appeared and become parties to such- litigation, cannot be compelled to come into court under a petition for á rule to show cause.”

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Bluebook (online)
83 U.S. 551, 21 L. Ed. 481, 16 Wall. 551, 1872 U.S. LEXIS 1183, Counsel Stack Legal Research, https://law.counselstack.com/opinion/marshall-v-knox-scotus-1873.