Hebert v. Crawford

• Decision Date: 07 April 1913
• Docket Number: No. 83,83
• Citation: 33 S.Ct. 484,57 L.Ed. 800,228 U.S. 204
• Parties: J. M. HEBERT, B. C. Hebert, M. S. Hamshire, L. Hamshire, J. A. Bordages, and J. E. Broussard, Appts., v. W. J. CRAWFORD, Trustee, and E. J. Le Blanc
• Court: U.S. Supreme Court

228 U.S. 204

33 S.Ct. 484

57 L.Ed. 800

J. M. HEBERT, B. C. Hebert, M. S. Hamshire, L. Hamshire, J. A. Bordages, and J. E. Broussard, Appts.,

v W. J. CRAWFORD, Trustee, and E. J. Le Blanc.

No. 83.

Submitted December 9, 1912.

Decided April 7, 1913.

Messrs. A. D. Lipscomb and Frederick S. Tyler for appellants.

Messrs. Horace Chilton and U. F. Short for appellees.

Mr. Justice Lamar delivered the opinion of the court:

This conflict of jurisdiction between state court and bankrupt court, with injunction and counter injunction, grew out of a controversy as to who was in possession of a crop of rice when Moore & Bridgeman, who had planted it, filed their petition on July 16, 1906, to be adjudged bankrupts. If the rice was then in their possession the bankrupt court had jurisdiction to administer it as assets of the estate, and to determine all claims to the property. Babbitt v. Dutcher, 216 U. S. 102, 54 L. ed. 402, 30 Sup. Ct. Rep. 372, 17 Ann. Cas. 969; Bryan v. Bernheimer, 181 U. S. 188, 45 L. ed. 814, 21 Sup. Ct. Rep. 557; Bardes v. First Nat. Bank, 178 U. S. 524, 44 L. ed. 1175, 20 Sup. Ct. Rep. 1000.

The firm of Beaumont Mills claimed, however, that for value and in good faith, they had acquired the title and possession of the rice on June 15, 1906, thirty days before the petition in bankruptcy was filed; that they had employed Moore & Bridgeman to harvest and deliver it, and that LeBlanc, who was soon thereafter elected trustee, used labor, teams, and machinery of the bankrupts in harvesting and threshing the crop. The Beaumont Mills paid him, as trustee, for these services and for hauling and delivering the rice to them at their warehouse. This they claim did not affect the jurisdiction of the state court of any controversy as to the ownership and possession of the crop.

Creditors of the bankrupts, on the other hand, denied the title of the Beaumont Mills, insisting that the crop belonged to Moore & Bridgeman, and that the delivery by LeBlanc, trustee, was a conversion to his own use and that of the Beaumont Mills, of which firm he was a member. These creditors thereupon instituted summary proceedings in the bankrupt court to charge him with its value. On that hearing two members of the firm of Beaumont Mills were sworn and testified as witnesses in his behalf. The district court found in favor of the creditors, and no December 17, 1907, entered an order reciting that the rice was the property of Moore & Bridgeman; that it came into the possession of LeBlanc, as trustee; that he improperly delivered it to the Beaumont Mills, and was chargeable with $11,651, its value. The court thereupon directed that he pay that sum into the registry of the court within ten days. That judgment was affirmed (92 C. C. A. 285, 166 Fed. 689).

LeBlanc was without funds with which to comply with this order, and claimed that, under the circumstances, he had the right to withdraw $11,651—the value of the rice—from the funds of the Beaumont Mills, and deposit it in the registry of the court. The other members of the firm resisted this claim and accordingly instituted proceedings against him in the state court to prevent his carrying his threat into execution. On March, 1909, a temporary injunction was issued, restraining him from withdrawing partnership assets for the purpose of paying the money into the bankrupt court.

The creditors of Moore & Bridgeman contended that they were not concerned with the suit betwen the partners, or the source from which LeBlanc secured the money to pay the judgment rendered against him on December 17, 1907. They therefore pressed for a compliance with that order, and to avoid attachment for contempt, LeBlanc, in disobedience of the injunction, drew $11,651 from the bank account of the Beaumont Mills, paid the firm's money to the clerk of the bankrupt court, who deposited it with the Gulf Bank and Crawford, elected to succeed LeBlanc as trustee of Moore & Bridgeman.

The Beaumont Mills at once filed a supplemental petition in the state court, making the bank and Crawford, trustee, defendants, and praying judgment against both of them for the partnership money in their hands, and for other and further relief. Crawford, in turn, immediately brought this bill, in the bankrupt court, to enjoin the Beaumont Mills from prosecuting their suit against him in the state court. He insisted that the bankrupt court had jurisdiction of the res and was, alone, authorized to determine his right to retain the $11,651 paid over to him as trustee. He contended also that the order of December 17, 1907, in the summary proceedings, was not only conclusive that the bankrupt court had jurisdiction of the res, but he also insisted that, as the Beaumont Mills had taken part in that litigation, they were bound by the finding that the crop belonged to Moore & Bridgeman. A decree was rendered in Crawford's favor by the district court. It was affirmed by the court of appeals, and is brought here by the Beaumont Mills for review.

Crawford's contention must, in part, be sustained. For whatever may have been the legal or equitable rights of the Beaumont Mills under their contracts with Moore & Bridgeman, and under the bill of sale of June 15, 1906, it still appears that, first, Moore & Bridgeman, and, later, LeBlanc, as trustee, engaged in gathering, threshing, hauling, and delivering the rice. This physical possession, under the decision in Murphy v. John Hofman Co. 211 U. S. 562, 53 L. ed. 327, 29 Sup. Ct. Rep. 154, and cases cited, gave the bankrupt court control of the res, and authority to...