Voorhies v. Frisbie

25 Mich. 476, 1872 Mich. LEXIS 133
CourtMichigan Supreme Court
DecidedOctober 15, 1872
StatusPublished
Cited by18 cases

This text of 25 Mich. 476 (Voorhies v. Frisbie) is published on Counsel Stack Legal Research, covering Michigan Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Voorhies v. Frisbie, 25 Mich. 476, 1872 Mich. LEXIS 133 (Mich. 1872).

Opinion

'Campbell, J.

The bill in this cause was filed by an assignee in bankruptcy, to set aside a conveyance alleged to have been made by the bankrupt in fraud of the bankruptcy. By some apparent misunderstanding, the defendants’ default was taken, ■•and the circuit court, acting within a discretion which we ■cannot review, refused to open it. The case, therefore, comes before us. on the sufficiency of the bill.

■ The bill would be fatally defective under any circumstances not dependent on the bankruptcy proceedings. It •is not only entirely lacking in direct allegations which would make out a fraud against creditors, but it does not show that any creditor had taken such steps as would— apart from the bankrupt law — give him any right to com[477]*477plain of the fraud, if existing. The only question presented, is, whether the assignee in bankruptcy could resort to the circuit court of Clinton county, to obtain relief against a conveyance alleged to have been made in fraud of that statute.

It cannot be questioned that the bankrupt law is as binding in one court as in another, and a title obtained by valid proceedings under it, must be respected. In private hands it would be, like any other vested right, enforced in any court having cognizance of such property rights, without any necessary regard to its origin, as a land title derived from a patent, for purposes of jurisdiction, stands on the same footing in all courts, in real actions, with a private grant or inheritance.

But the right of an assignee in bankruptcy to apply to a state court to have a conveyance set aside as fraudulent, is claimed by defendants to stand on different grounds, and we think correctly.

The fact that the fraud charged is not a fraud against our state laws, is not decisive. It is not uncommon to seek redress in a forum where parties can be found, for actual frauds committed elsewhere, not being merely statutory. And as the bankrupt law must bind all tribunals in this country, acts committed against it could not be recognized as lawful, whether affirmative relief could be granted against them or not. The difficulty arises from other considerations, involving the danger of a conflict of jurisdictions, if state courts should attempt to adjudicate upon the peculiar class of cases to which the present controversy belongs. Upon cases not involving similar difficulties, we express no opinion.

By the first section of the bankrupt act, the courts of the United States are vested with very full and complete jurisdiction, not only to determine the liabilities of the [478]*478bankrupt, but also to try the conflicting claims of all parties, debtors and creditors, to provide for collecting all the assets, ascertaining and liquidating all liens, and regulating every thing necessary to be done in the premises until the proceedings are closed. The second section also makes express provision for suits at law, or in equity, brought by the assignee against any person claiming an adverse interest.

In Ex parte Christy, 3 Howard, 292, the plenary power of the courts of the United States, under similar authority ot the bankrupt law of 1841, was very thoroughly discussed, and in some cases, at least, jurisdiction was asserted, to control parties litigating in state courts; an interference not lawful in ordinary cases, and which depends on the exclusive character of the bankruptcy power, vested in the general government under the constitution. No express decision was made as to whether the jurisdiction of the United States was exclusive, and in a subsequent case, in the same volume, that point was also reserved.—Norton’s Assignee v. Boyd, 3 Howard, 426. It would make no great difference in those courts, whether action should be had in the state courts or not, when they have so large a control over the litigants as practically to reach the proceedings. But it is a very serious question, whether an independent court can be said to have jurisdiction, when subject to such interference; and quite as serious a question, whether it is proper to exercise it, if theoretically existing.

It cannot be doubted, that there is power in congress to make jurisdiction exclusive over suits arising under the laws of the United States, where the proceeding is a direct one to enforce peculiar rights originating under the statute» and not within any other law. The right to assail the conveyance in question, is purely statutory, upon the case made by the bill. It is also in the nature of a penal enactment, in creating a forfeiture and disability enforceable in [479]*479favor of the assignee. It is generally understood to be settled law, that no court will take jurisdiction for the sole purpose of enforcing the penal consequences imposed by any other authority which has its own courts to enforce them.—The Antelope, 10 Wheat., 67. It was held in Gelston v. Hoyt, 3 Wheat., 246, that a state court cannot lawfully assume any such jurisdiction under the laws of the United States. In those cases where it is loosely said there is a concurrent jurisdiction over certain crimes, it is only because the same act may violate the laws of both jurisdictions. Thus, in Fox v. Ohio, 5 Howard, 410, it was held, that passing counterfeit money might be thus punishable, but it was never supposed that a state could punish it under an act of congress, or as any thing but a state offense. We have refused to enforce the penalties of foreign usury laws not avoiding the contract, although if the contract was absolutely void where made, it would not be held valid anywhere.—Collins Iron Co. v. Burkam, 10 Mich., 283. And thus far, at least, the penalties and disabilities under the patent, and copyright, and navigation, laws have not been understood to fall within the cognizance of state courts, although the language giving jurisdiction to the courts of the United States is no more exclusive than that of the bankrupt law. Yet contracts concerning the transfer of such property are cognizable in all courts, like other property contracts.

We think the purpose of the present action is directly to aid in the administration of the estate of the bankrupt, and that the bankrupt law regards these proceedings as a part of the course which should be within the control of the courts having jurisdiction under the statute. If a state court should affirm the title of the defendants, and deny the claim of the assignee, there is no appellate resort except to the United States supreme court. If we have jurisdic[480]*480tion, our judgment must be valid till reversed. But it can hardly be supposed that it was designed that summary proceedings should be subject to such long delays, and that the settlement of the estate should be retarded by resort to courts of another jurisdiction. The inconvenience of such a course has, we think, a decided bearing upon the construction which the statute itself requires. If this bill had been filed by defendant to quiet title against the assignee in bankruptcy pending bankrupt proceedings, the want of jurisdiction would not be disputed.

The conditions on which state courts can, in the absence of any distinct restriction, exercise concurrent jurisdiction with courts of the Union, have never been clearly defined, and perhaps cannot be.

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Bluebook (online)
25 Mich. 476, 1872 Mich. LEXIS 133, Counsel Stack Legal Research, https://law.counselstack.com/opinion/voorhies-v-frisbie-mich-1872.