Holmes v. Rowe, 8615.

• Decision Date: 14 June 1938
• Docket Number: No. 8615.,8615.
• Citation: 97 F.2d 537
• Parties: HOLMES v. ROWE.
• Court: U.S. Court of Appeals — Ninth Circuit

97 F.2d 537 (1938)

HOLMES v. ROWE.

No. 8615.

Circuit Court of Appeals, Ninth Circuit.

June 14, 1938.

Nathan G. Gray, of Berkeley, Cal., for appellant.

John Corgiat, Jr., of Oakland, Cal., for appellee.

Before GARRECHT, HANEY, and STEPHENS, Circuit Judges.

GARRECHT, Circuit Judge.

Upon appeal from an order granting appellee's motion for a permanent injunction.

On October 23, 1933, appellant instituted an action against the appellee and others, entitled as follows:

"Justice's Court of the City of Berkeley, County of Alameda, State of California. Oliver Youngs, Justice of the Peace. Number of action 24,923 S. O. Holmes, Plaintiff, v. D. Harrison Rowe, Kate S. Rowe, his wife, Donald R. Rowe, et al., Defendants. Nature of action — Money rent."

While this action was still pending, appellee, on November 4, 1935, filed his voluntary petition in bankruptcy in the District Court of the United States. In his Schedule A-3, "Creditors whose claims are unsecured," the name of creditor "S. O. Holmes," by mistake was entered therein as "S. O. Hoames," the intention however to list the claim, the enforcement of which was enjoined in this proceeding, was evident from the wording which was as follows: "S. O. Hoames, Assignee, Oakland Mortgage & Finance Company, Oakland, 314 Pacific Building, Oakland, Justice Court, Berkeley, Suit #24923, Rent, $155.50."

Prior to the time appellee filed his petition in bankruptcy he had a discussion with S. O. Holmes concerning the action which had been instituted against him and the payment of the indebtedness involved therein and at that time S. O. Holmes informed him that he had already secured a default judgment against him.

Rowe was adjudicated a bankrupt on November 5, 1935, and on March 23, 1936, was given his discharge.

On April 6, 1936, without any notice to appellee, appellant caused a judgment in the Justice's Court to be entered against the appellee on the complaint which had been filed October 23, 1933, long prior to the proceedings in bankruptcy, and on March 9, 1937, levied execution upon appellee's wages earned by him as an employee of the Friden Calculating Machine Company. Appellee first learned of this judgment only after execution had been levied on his wages. He thereupon filed with the Clerk of the said Justice's Court a petition to restrain appellant from levying execution upon the judgment, which was denied. Again, on April 22, 1937, appellee filed a petition in the same court, applying for an order directing that the judgment be canceled and discharged of record, which was also denied.

On June 15, 1937, appellee filed in the United States District Court, the same court which granted his discharge in bankruptcy, a "Supplemental petition to restrain creditor from levying execution upon judgment against bankrupt herein." In his petition, among other things, appellee alleged:

"* * * that the judgment upon which the said executions were levied are based upon a claim, provable and discharged by the Order set forth in the preceding paragraph hereinabove set forth; That said judgment was rendered in the Justice's Court of the City of Berkeley by the Honorable Oliver Youngs, Justice of the Peace in an action entitled, `S. O. Holmes, Plaintiff, v. D. Harrison Rowe, D. Ray Rowe et als, Defendants,' and numbered 24923; That said action was pending on and before the 4th day of November 1935; That petitioner set forth in his schedule of unsecured liabilities, on file herein, the claim upon which said action was based together with the title of the said action and its number; That prior to the said 4th day of November 1935, the said S. O. Holmes informed petitioner that he S. O. Holmes had procured a default judgment against petitioner; That petitioner believed the said S. O. Holmes and continued to so believe until after he filed his original petition in the above entitled matter for relief from execution; That the said judgment rendered in the above entitled Justice's Court action was entered (by default) on or about the 6th day of April 1936; That petitioner received no notification of the rendition of said judgment whatsoever from the Court, the court clerk or from the plaintiff, S. O. Holmes; That petitioner's first knowledge of said judgment came to him on or about the 9th day of March 1937."

The District Court entered its order granting appellant permission to file his supplemental petition and also granted his oral motion to amend Schedule A-3 upon its face so as to read "S. O. Holmes, Assignee," instead of "S. O. Hoames, Assignee."

On July 3, 1937, the Court entered its order that appellee's petition for a permanent injunction be granted and that an injunction issue accordingly. From this order the present appeal is taken.

The main contention of appellant is that the order of the District Court granting the injunction is erroneous, in that the Court did not have jurisdiction of the subject-matter involved in said petitions, because of the fact that neither the petitions, nor the evidence, disclosed that the bankrupt had exhausted his remedies in the state court so as to enable him to come into the Federal Court.

With this contention of appellant we do not agree. A review of the decisions discloses that a Federal District Court, once having obtained jurisdiction of a controversy, and having rendered a decision in the matter, has complete power to protect the judgment or decree which it has rendered, and may go so far as to enjoin an action entertained in the state court by a litigant, involving the same subject-matter, when such action may in any way interfere with, or nullify the effect of said judicial determination. So here, the Court having discharged the appellee in bankruptcy, still retained sufficient jurisdiction to grant an injunction restraining appellant from levying execution upon a judgment rendered in his favor by the state court against the appellee upon a claim adjudicated in the bankruptcy court.

That the District Court had the power to issue this writ is undoubted. The Judicial Code provides (28 U.S.C.A. § 377) that: "* * * The Supreme Court, the circuit courts of appeals, and the district courts shall have power to issue all writs not specifically provided for by statute, which may be necessary for the exercise of their respective jurisdictions, and agreeable to the usages and principles of law."

The Bankruptcy Act, section 2 (15), reinforces that authority by providing (11 U.S.C.A. § 11 (15), that: "* * * The courts of bankruptcy * * * are hereby invested, * * * with such jurisdiction at law and in equity as will enable them to exercise original jurisdiction in bankruptcy proceedings, * * * 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 title * * *."

Referring to these statutes, the Supreme Court has repeatedly said that, "`the power to issue an injunction when necessary to prevent the defeat or impairment of its jurisdiction is * * * inherent in a court of bankruptcy, as it is in a duly established court of equity.'" Steelman v. All...