Mitchell v. Great Works Milling & Manuf'g Co.

17 F. Cas. 496, 2 Story 648

• Court: U.S. Circuit Court for the District of Maine
• Decided: October 15, 1843
• Status: Published

Opinion

STORY, Circuit Justice.

Two objections have been taken, on the part of the defendants: (1) That the matter of the bill, although for an account, is completely remediable at law, and, therefore, not the fit subject matter of a bill in equity. (2) That the circuit court has not jurisdiction in this case in bankruptcy under the bankrupt act of 1841 (chapter 9). In the judgment of this court, neither objection is maintainable; and I will shortly proceed to state the reasons of this determination. As to the first objection, it is certainly true, that, in matters of account, courts of equity possess a concurrent jurisdiction, in most if not in all cases, with courts of law. In the present case, taking the statements of the bill to be true, which we must upon the demurrer, it seems to us not only clear, that it is a case fit for the interposition of a court of equity, but that it is emphatically so, as one where a court of law could not render any justice in the matter; or, if any, it must be a very crippled and imperfect redress. It is, indeed, impossible to read, the bill and not to feel, that some of the claims there set up, considering the complications and changes of interests of the parties, cannot be adequately examined or properly disposed of except in a court of equity. But the more material consideration is that, which respects the jurisdiction of this court to maintain the bill under the bankrupt act of 1841 (chapter 9), as it is a case, which would not otherwise fall within its general jurisdiction. At the threshold of the argument, we are met with the suggestion, that when the act was before congress, the opposite doctrine was then maintained in the house of representatives, and it was confidently stated, that no such jurisdiction was conferred by' the act, as is now insisted on. What passes in congress upon the discussion of a bill can hardly become a matter of strict judicial inquiry; and if it were, it could scarcely be affirmed, that the opinions of a few members,' expressed either way, are to be-considered as the judgment of the whole house, or even of a majority. But, in truth, little reliance can-or ought to be placed upon such sources of ’ interpretation of a statute. The questions- can be, and rarely are, there debated upon strictly legal grounds, with a full mastery of the subject and of the just rules of interpretation. The arguments are generally of a mixed character, addressed by'way of objection, or of support, rather "with a yiew to carry or defeat a bill, than with the strictness of a judicial decision. But if the house entertained one construction of the language of the bill, non constat, that the same opinion was entertained either by the senate or by the president; and their opinions are certainly, in a matter of the sanction of laws, entitled to as great weight as the other branch. But in truth, courts of justice are not at liberty to look at considerations of this sort. We are bound to interpret the act as we find it, and to make such an interpretation as its language and its apparent objects require. We must take it to be true, that the legislature intend precisely what they say, and to the extent which the provisions of the act require, for the purpose of securing their just operation and effect. Any other course would deliver over the court to interminable doubts and difficulties; and we should be compelled to guess what was the law, from the loose commentaries of different ■debates, instead of the precise enactments of the statute. Nor have there been wanting illustrious instances of great minds, which, after they .had, as legislators, or commentators,- reposed upon a short and hasty opinion, have deliberately withdrawn from their first impressions, when they came upon the judgment seat to re-examine the statute or law in its '.full bearings.

Passing from these considerations, which have been drawn from us by the suggestions at the bar, let us look at the actual provisions of the bankrupt act of 1841 (chapter 9). And here, in order; to ascertain the jurisdiction of the circuit court, we must first examine what is the jurisdiction given to the district court The 6th section of the act declares: “That the district court in every district shall have jurisdiction in all matters and proceedings in bankruptcy, arising under this act and any other act, which may hereafter be- passed on the subject of bankruptcy; the said jurisdiction to be exercised summarily, in the nature of summary proceedings in equity.” And then, not by way of restriction, but -of explanation, if not of enlargement of the objects of this jurisdiction, it proceeds to declare: “And the jurisdiction hereby'.conferred on the district court shall 'extend to ■ all cases and controversies in bankruptcy, arising between the bankrupt and any creditor or creditors, who shall claim any debt or' demand under the bankruptcy; to all such creditor and creditors, and the assignee of the estáte, whether in office or removed; to all cases and controversies between such assignee and the' bankrupt; and to all acts, matters,-and things to be done under and in virtue pf the bankruptcy, until the final distribution and settlement of the ■estate of the bankrupt, and' the close of the proceedings in -bankruptcy.” Now, it seems to us, impossible to-doubt, that the object of these clauses, which are sufficiently broad and comprehensive for the purpose of giving the: district court complete jurisdiction to ac-I i complish, of itself, all the purposes of the act, and to enable it, independently of any other jurisdiction, to begin, continue, and end, all such proceedings as might be necessary and proper, in an equitable view, to accomplish the entire settlement and final distribution of the bankrupt’s estate. To us it seems perfectly clear, that congress possess a complete constitutional authority to enact such a law for such an object; for the judicial power, by the constitution, extends “to all cases in law and equity, arising under this constitution and the laws and treaties made, or which shall be made under their authority;” and further, congress are authorised by the constitution, “to pass uniform laws on the subject of bankruptcies throughout the United States.” The judicial power has, in this respect, under the constitution, always been construed to be co-extensiv.e with the legislative powers, upon the plain ground, that the constitution meant to provide ample I means to accomplish its own ends by its own courts. Now, looking to the many objects and purposes of the bankrupt act of 1841 (chapter 9), it would seem strange, that congress i should not have provided all the necessary and proper means to accomplish all its purposes. It is clear, that congress has no right to require, that the state courts shall -entertain suits for such objects and purposes. The states, in providing their own judicial tribunals, have a right to limit, control, and restrict their judicial functions, and jurisdiction, according to their own mere pleasure. They may refuse to allow suits to be brought there “arising under the laws of the United States” for many just reasons; first that congress are bound to provide such tribunals for themselves; secondly, that state courts are not subject to the legislation of congress as to their jurisdiction; thirdly, that it may most materially interfere with the convenience of their- own courts, and the rights of their own citizens, and be attended with great expense to the state, as well as great delays in the administration of justice, to allow their courts to be crowded with suits, arising under the laws of the United States; and fourthly, as in the present case, that it would involve the state courts in almost endless examinations and discussions of the principles and bearings of the bankrupt law, confessedly, a system novel in our jurisprudence, intricate -in its details, and involving questions exceedingly complicated and difficult in its practical operation. Suppose, upon considerations of this sort, any state legislature should prohibit its own courts from taking cognizance of any causes arising under the bankrupt act, no one could doubt, that it-was a perfectly constitutional exercise of authority, and not justly to be complained of, as a want of comity or of justice. A due regard of a state to its own rights, and its duties to its own citizens, might require such a course, in order to prevent oppressive delays, and obstructions in the actual administration of home justice; and, at all events, might justify it in preferring such claims to those, belonging appropriately to the national jurisdiction. Besides all these considerations, there is one, which cannot but be deemed of paramount importance in the administration of a system of bankruptcy. It is uniformity, promptitude, regularity, and efficiency in carrying into effect all its provisions. The courts, which are to administer such a system, must possess not only jurisdiction at law, but in equity; not only a right to proceed in a formal way, but to act summarily; not only to hold regular terms, but to be always open; not only to be bound to act, but to be governed by uniform rules and principles of interpretation and action, at least, as far, as from the diversity of human judgments, such uniformity of rules, principles, and proceedings, can be looked for in practice. But what can be expected from a hundred of state courts, organized upon no uniform system, governed by no uniform jurisprudence, and in their jurisdiction and modes of proceeding, admitting of almost endless diversities of practice and action? So far from any system of bankruptcy being capable of any uniformity of action throughout the United States, under such circumstances, it would be in no two states, perhaps in no two tribunals of the same state, the same. And if every decision in a state tribunal was to be subject to the appellate jurisdiction of the supreme court of the United States, instead of the proceedings in bankruptcy being completed, as the act of 1841 (chapter. 9, § 10) manifestly contemplates, within two years from their commencement, a half century might elapse before such a consummation.

Now, it is precisely because considerations of this sort could not be supposed to escape the notice of congress, but must have pervaded 'the whole purposes of legislation on the subject of bankruptcy, that we should be utterly surprised, if adequate provisions were not made in the act of 1841 (chapter 9) to carry the entire system into effect, through the instrumentality of the courts of the United States, over which congress possess a complete authority, subject to no foreign control, or government, or obstruction. It was not necessary to say, that the courts of the United States should possess exclusive jurisdiction. It was only necessary to say, that they should possess full jurisdiction, and to leave to the state courts the exercise of any concurrent jurisdiction, whiGh they could or might rightfully maintain. In this way, it would naturally follow, that after a little experience in the workings of the system, with the aid of some amendments by congress, the courts of the United States would soon attain punctuality, uniformity, and promptitude, in administering the system, so as to accomplish in the fullest manner all the ends of private, as well as of public justice.

Now, as it seems to us, this very object was designed to be attained, and can be attained, by the provisions of the 6th section of act of 1841 (chapter 9), already cited, if we give to the words their natural, and appropriate meaning, and infuse into them no subtleties, or doubts, or refinements, grounded upon the supposed intentions of congress, or upon technical doctrines, or upon particular local policy. If ever there can be a case for the application of a liberal interpretation of an act from its apparent objects, as well as from the argument ab inconvenienti, It seems to us, that this Is the very case which will most forcibly illustrate its propriety and cogency. Let us look for a moment at some of the provisions of the act to see, what the courts, sitting in bankruptcy, are required to do. We have already seen, by the 10th section of the act of 1841, that it is required, “That all the proceedings in bankruptcy in each case shall, If practicable, be finally adjusted, settled and brought to a dose by the court within two years after the decree declaring the bankruptcy.” How is this to be done, unless the court possesses jurisdiction, co-extensive with all the subject matters in bankruptcy, to enforce and adjust all claims? How can this be enforced, if the entire jurisdiction to collect debts, and to settle controversies in bankruptcy, belongs exclusively to the state courts? What control can the courts of the United States, sitting in bankruptcy, exercise over the state courts to regulate, or to speed their proceedings? Besides, the same section of the act declares: “That, in order to insure a speedy settlement and close of the proceedings in each case of bankruptcy, it shall be the duty of the court to order and direct a collection of the assets, and a reduction of the same to money, and a distribution thereof, at as early periods as practicable, consistently with a due regard to the interests of the creditors.” Now, here the end is required of the court; and can it reasonably be doubted, that the means are also given to the court to accomplish it? Construe the clause in the 6th section of the act of 1841, where it extends the jurisdiction of the district courts “to all acts, matters, and things to be done under, and in virtue of the bankruptcy, until the final distribution, and the settlement of the estate of the bankrupt, and the close of the proceedings in bankruptcy,” to include the jurisdiction to entertain suits to adjust all adverse claims, and to collect all outstanding debts (as its terms are sufficiently comprehensive to include), and we have exactly such a jurisdiction, commensurate to the end. Construe it otherwise, and the court sitting in bankruptcy is left crippled and maimed; and we require it to move onward, when it it chained to the earth.

These are some of the grounds, which satisfy our minds, that congress did not intend to leave the bankrupt system, for its practical operation, or success, or efficiency, to the good pleasure, or discretion of the states, or to their voluntary and gratuitous efforts to enforce or sustain it.' ' Congress meant to provide a system capable of entire self-execution' by the national tribunals, without the assistance or co-operation of the states, if the parties interested should choose to rely upon the national arm. The jurisdiction given to • the district courts is, as we construe it, ample for all such purposes; and we see no reason, why the general language, in which it is given, should be restricted, so as to defeat a single purpose of the act

Such then being in our judgment the jurisdiction given by the act of 1841 (chapter 9) to the district courts, we are next led to the consideration of the jurisdiction of the circuit court; and if, as we think, the district court would have complete jurisdiction of the present casé, we think that there can be no doubt that this court also possesses it under the 8th section of the bankrupt act of 1841 (chapter 9). That section declares: "That the circuit court within and for the district, where the decree of bankruptcy is passed, shall have concurrent jurisdiction with the district court of the -same district of all suits at law and in equity, which may and shall be brought by any assignee of the bankrupt against any person or persons claiming an adverse interest, or. by such persons against such assignee, touching any property or rights of property of said bankrupt, transferable to or vested in such assignee.” Now, there cannot be' a doubt, that a debt claimed by and'due to the bankrupt from any person is "a right of property" in the bankrupt. Every chose in action is a right of property, assignable in equity, if not at law (see Gray v. Bennett, 3 Metc. [Mass.] 522, 531); and it is clearly assignable under the bankrupt act; for that act declares (section 3) that upon the decree in bankruptcy, “Ail the property and rights of property, of every name and nature, real, personal, or mixed, of every bankrupt, &c., shall be deemed vested by force of the same decree in the assignee,” &c.; and the assignee, is by the same section vested with full power and authority to sue for the same, as fully, to all intents and purposes, as the bankrupt himself might at the time of his bankruptcy. The debtor in every such case is necessarily in the sense of the act an adverse party; if he were not, he would pay the debt or claim; and his very resistance of it, upon suit brought, shows him to be, in form as well as in fact, an adverse party. So that, upon the plain terms and import of the section, the jurisdiction of the circuit court would become unquestionable in the present case. And, indeed, as it is a concurrent jurisdiction with the district court (designed doubtless to aid that court in cases of grave doubt and difficulty), it also shows, that this very class of cases was deemed to be within the jurisdiction of the district court, by and in virtue of the 6th section of the act already referred to.. Each section reflects a strong light upon the other, and establishes the intention of congress to be, that its own courts should possess a plenary jurisdiction over all cases and controversies, connected with and growing‘out of .any bankruptcy. See same point, Ex parte City Bank of New Orleans, 3 How. [44 U. S. 292].

Upon the whole, our opinion is, that the demurrer should be overruled. ■ .. .