Opinion · Supreme Court of the United States
White v. Schloerb
178 U.S. 542
- Type
- Opinion
- Court
- Supreme Court of the United States
- Jurisdiction
- Federal
- Date
- 1900-05-21
- Topic
- general
Mr. Justice Gray, after making the above statement, delivered the opinion of the court. The material facts of this case may be briefly recapitulated. After the District Court of the United States had adjudged Schloerb and Schickedantz bankrupts on their own petition, and had referred the case to a referee in bankruptcy, and the referee had taken possession of the bankrupts’ stock of goods in their store, and had caused the entrance of the store to be locked up, and before the appointment of the trustee in bankruptcy, a writ of replevin of some of those goods was sued out by other persons against the bankrupts from an inferior court of the State of Wisconsin, and was executed by the sheriff of the county, by his deputy, by forcibly entering the. store and taking possession of these goods. The bankrupts thereupon presented to the District Court of the United States a petition, setting forth the above facts, and alleging that the goods replevied were their lawful property, and had been purchased by them of the plaintiffs in replevin, and were now in the possession of the sheriff and his deputy and the attorney of those plaintiffs; and praying that they might be compelled to redeliver the goods to the District Court sitting in bankruptcy, and be restrained from making any disposition thereof.
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Headnotes
- Bankruptcy Law — Custody of Estate Property Upon adjudication in bankruptcy, a bankrupt's property in the bankrupt's actual possession and claimed as the bankrupt's own comes into the lawful possession and custody of the bankruptcy court; a referee in bankruptcy is the court's representative and substitute, so property in the referee's custody is in the custody of a court of the United States. 178 U.S. 542 (1900)
- Bankruptcy Law — Federal Supremacy over State Process Property in the custody of a court of the United States cannot be taken out of that custody upon any process from a state court, including a writ of replevin. 178 U.S. 542 (1900) (citing Freeman v. Howe, 24 How. 450)
- Bankruptcy Law — State Replevin Actions After Adjudication After an adjudication in bankruptcy, an action of replevin in a state court cannot be commenced and maintained against the bankrupt to recover property that was in the possession of and claimed by the bankrupt at the time of the adjudication, and in the possession of a referee in bankruptcy at the time the replevin action is begun. 178 U.S. 542 (1900)
- Bankruptcy Law — Jurisdiction A District Court sitting in bankruptcy has jurisdiction by summary proceedings to compel persons who have forcibly and unlawfully seized and taken property out of the court's judicial custody to restore that property to its custody. 178 U.S. 542 (1900)
WHITEv. SCHLOERB,178 U.S. 542(1900)
20 S.Ct. 1007
WHITEv. SCHLOERB.
CERTIFICATE FROM THE CIRCUIT COURT OF APPEALS FOR THE SEVENTH CIRCUIT.
No. 530.
Submitted April 26, 1900.
Decided May 28, 1900.
THIS was a petition in equity to the Circuit Court of Appeals
for the Seventh Circuit, under the jurisdiction conferred upon
that court by the second clause of section 24 of the Bankrupt Act
of July 1, 1898, c. 541, to superintend and revise in matter of
law the proceedings in bankruptcy of the District Courts of the
United States in that circuit.30 Stat. 553. The Circuit Court of
Appeals certified to this court the following statement of the
case and the questions of law:
"On September 13, 1899, August T. Schloerb and Eugene B.
Schickedantz, who were respectively residents and inhabitants of
the Eastern District of Wisconsin, and who were co-partners in
trade in the said district, filed their voluntary petition in
bankruptcy in the District Court of the United States for that
district. On the same day they were duly adjudged
Page 543
bankrupt by that court, and the matter referred to a referee in
bankruptcy for further proceedings according to law. They had at
that date a stock of goods contained in a store, the entrance to
which was locked by the direction of the referee.
"Thereafter, on September 21, 1899, James Cogan and Bernard
Cogan, who were copartners, commenced an action of replevin
against the bankrupt in the circuit court of the State of
Wisconsin for the county of Winnebago, in which county the store
of the bankrupts was located, to recover the possession of
certain specified goods, then in the store of the bankrupts, and
forming part of their stock of goods. On the same day, the proper
undertaking and requisition to the sheriff of the county of
Winnebago, according to the law of the State of Wisconsin, were
delivered to the petitioner Charles M. White, who was then the
sheriff of the county, who delivered it for execution to the
petitioner Henry Eckstein, who was the under-sheriff of said
sheriff. In pursuance of said requisition, the under-sheriff, on
the same day, and before the selection and appointment of a
trustee in the bankrupt proceedings, forcibly entered the store
of the bankrupts, and took possession of certain goods, part of
the goods specified in the writ of replevin.
"On September 23, 1899, the bankrupts presented their petition
to the District Court of the United States for the Eastern
District of Wisconsin, setting forth the facts above recited, and
also alleging that the goods so taken under the writ of replevin
were part of a bill of goods purchased by them of the plaintiffs
in that writ, and were their lawful property. The petition
alleges that the goods were in the possession of the petitioners,
the sheriff and under-sheriff mentioned, and John C. Thompson,
the attorney for the plaintiffs in the writ of replevin, and
asked the court that they be compelled to redeliver the goods to
the District Court sitting in bankruptcy, from whose possession
they were taken, and that they be enjoined from any disposition
thereof. Upon the filing of the petition the District Court
issued its mandate requiring the petitioners here, the sheriff,
the under-sheriff and the attorney mentioned, to show cause
before that court, at a time and place mentioned, why the seizure
of the goods under the writ of replevin should not be vacated and
set aside,
Page 544
and the goods returned to the bankrupts, or placed in the
possession of the marshal of the court, or such other person as
the court should direct, and why they should not be respectively
enjoined from interference with the property so seized, and in
the mean time restraining them from such interference. The
petitioners specially appeared upon the return day mentioned in
the mandate; and moved the District Court to set aside and vacate
its mandate or order to show cause, for want of jurisdiction in
the court of bankruptcy over the subject-matter; and also
presented proof by affidavit to the effect that the assertion of
title to the goods in question by the plaintiffs in the writ of
replevin was founded upon the claim that the bankrupts had
purchased the goods of them upon false and fraudulent
representations upon which reliance had been placed, and that
before the writ of replevin they had elected to rescind the sale
and had demanded of the bankrupts the return of the goods. The
court of bankruptcy at the hearing and on October 26, 1899, made
the following order: `It is hereby ordered that the said Charles
M. White, Henry Eckstein and John C. Thompson be, and they are
hereby, restrained from sale or other disposition of the property
mentioned in said petition herein; and they are hereby directed
to turn over and deliver the said property, so taken by them from
the estate of the bankrupts, to the trustee appointed herein,
within twenty days from the date of this order; and it is further
ordered that the trustee, on delivery of the said property, keep
the same separate and apart from other property, to abide the
further order of the court; and that, in case sale of said
property is hereafter ordered, the proceeds of said sale be kept
separate and apart to abide such further order of the court.' The
opinion of the court upon that hearing is reportedIn re
Schloerb, 97 F. 326.
"The petitioners here, by their original petition filed in
this court, have presented the matters of law raised by the order
so made by the District Court sitting in bankruptcy.
"The questions of law upon which this court desires the advice
and instruction of the Supreme Court are:
"First. Whether the District Court sitting in bankruptcy had
jurisdiction by summary proceedings to compel the return of the
property seized?
Page 545
"Second. Whether, after adjudication in bankruptcy, an action
in a state court can be commenced and maintained against the
bankrupt to recover property in the possession of and claimed by
the bankrupt at the time of the adjudication?
"Third. Whether the property of a bankrupt, upon his
adjudication in bankruptcy, isin custodia legisof the
bankruptcy court, and can be taken possession of under process of
a state court?"
The questions certified concern, not the trial of the title to these goods, but only the judicial custody and lawful possession of them.
Under sections 33-43 of the Bankrupt Act of 1898 and the Twelfth General Order in Bankruptcy, referees in bankruptcy are appointed by the courts of bankruptcy, and take the same oath of office as judges of United States courts, each case in bankruptcy is referred by the court of bankruptcy to a referee, and he exercises much of the judicial authority of that court.30 Stat. 555-557;172 U.S. 657.
At the date of this adjudication in bankruptcy by the District Court of the United States, the goods were in the store of the bankrupts, and in their actual possession, and were claimed by them as their property. On the same date, that court referred the case to a referee in bankruptcy, and by his direction the entrance to the store was locked. The goods were then in the lawful possession of and custody of the referee in bankruptcy, and of the bankruptcy court, whose representative and substitute he was. Being thus in the custody of a court of the United States, they could not be taken out of that custody upon any process from a state court.
So far as regards this point, the decision of this court inFreemanv.Howe, 24 How. 450, more than covers the case. It was there adjudged that property taken and held by a marshalPage 547on a writ of attachment from a court of the United States, directing him to attach the property of one person, could not be taken from his possession on a writ of replevin from a state court in behalf of another person who claimed the attached property as his own. See alsoPeckv.Jenness, 7 How. 612, 625;Buckv.Colbath, 3 Wall. 334, 341;Covellv.Heyman,111 U.S. 176,182.
The second question certified relates to this point, although it is not so clearly expressed as it might be, and omits to mention in whose possession the property was when the writ of replevin was sued out. To that question, as explained and restricted by the facts set forth in the statement which accompanies it, our answer is: "After an adjudication in bankruptcy, an action of replevin in a state court cannot be commenced and maintained against the bankrupt to recover property in the possession of and claimed by the bankrupt at the time of that adjudication, and in the possession of a referee in bankruptcy at the time when the action of replevin is begun."
The first question remains: "Whether the District Court sitting in bankruptcy had jurisdiction by summary proceedings to compel the return of the property seized?"
By section 720 of the Revised Statutes, "The writ of injunction shall not be granted by any court of the United States to stay proceedings in any court of a State, except in cases where such injunction may be authorized by any law relating to proceedings in bankruptcy." Among the powers specifically conferred upon the court of bankruptcy by section 2 of the Bankrupt Act of 1898 are to "(15) make such orders, issue such process, and enter such judgments, in addition to those specifically provided for, as may be necessary for the enforcement of the provisions of this act."30 Stat. 546. And by clause 3 of the Twelfth General Order in Bankruptcy applications to the court of bankruptcy "for an injunction to stay proceedings of a court or officer of the United States, or of a State, shall be heard and decided by the judge; but he may refer such an application, or any specified issue arising thereon, to the referee to ascertain and report the facts."172 U.S. 657.
Not going beyond what the decision of the case before usPage 548requires, we are of opinion that the judge of the court of bankruptcy was authorized to compel persons, who had forcibly and unlawfully seized and taken out of the judicial custody of that court property which had lawfully come into its possession as part of the bankrupt's property, to restore that property to its custody; and therefore our answer to the first question must be: "The District Court sitting in bankruptcy had jurisdiction by summary proceedings to compel the return of the property seized."
These answers to the first and second questions render any further answer to the third question unnecessary.Ordered accordingly.