In re Cockfield

• Decision Date: 08 July 1924
• Citation: 300 F. 116
• Parties: In re COCKFIELD. v. ELAM. HUSBANDS
• Court: U.S. Court of Appeals — Fourth Circuit

300 F. 116

In re COCKFIELD.

HUSBANDS v. ELAM.

United States District Court, E.D. South Carolina.

July 8, 1924

A. L Hardee and W. Stokes Houck, both of Florence, S.C., for plaintiff.

Philip H. Arrowsmith, of Florence, S.C., for defendant.

ERNEST F. COCHRAN, District Judge.

The plaintiff, as trustee in bankruptcy, filed his complaint in this court on two causes of action to set aside, under the provisions of section 67e of the Bankruptcy Act (Comp. St. Sec. 9651), a mortgage executed by the bankrupt to the defendant on certain real estate in this district and a deed subsequently executed by the bankrupt conveying the same property to the defendant, and to recover the property and subject the same to the debts of the bankrupt. Thereupon he had a subpoena ad respondendum issued in the usual form of such subpoenas on the equity side of the court, the same being entitled 'In Bankruptcy,' and a copy was later personally served upon the defendant in the state of Virginia. Thereupon the defendant appeared for the sole and exclusive purpose of objecting to the jurisdiction of the court, and moved for an order rescinding and vacating the subpoena and vacating the alleged service thereof and dismissing the complaint on three grounds.

The first ground is that the process of a subpoena ad respondendum is not the proper process of the court of bankruptcy in a case of this sort, but that the plaintiff should have proceeded by rule to show cause. The defendant contends that the proceeding should be by a plenary suit, and that a plenary suit should be commenced in bankruptcy cases of this nature by a rule to show cause, and not by filing a complaint and issuing a subpoena ad respondendum, if the case is in equity, or a summons, if the case is at law. The defendant's position is that the Bankruptcy Act contemplates expedition in the hearing of all causes in the bankruptcy court, and that, in order to avoid the delays of the usual process in equity or at law, the court should adopt the proceeding by rule to show cause, requiring the defendant to answer, and upon the issues made proceed expeditiously but at the same time preserving all the substantial rights of the parties, and that the court, in order to accomplish the purposes of the Bankruptcy Act, should hold such proceeding by rule not only to be a 'plenary suit,' but the only form of 'plenary suit' permissible in such cases. I cannot sustain this contention. It is conceded that a court of bankruptcy has the powers both of a court of law and a court of equity. The suit is to set aside a mortgage and subsequent conveyance of real property, and is properly brought upon the equity side of the bankruptcy court. Even however, if the case is one at law, the court would still have jurisdiction, and the proper course would be to transfer it to the law side. Liberty Oil Co. v. Condon Bank, 260 U.S. 235, 43 Sup.Ct. 118, 67 L.Ed. 232; Equity rule 22.

There can be no question of the power of a court of bankruptcy to adopt and use the process usual in a court of equity when the case is on the equity side, and the process usual in a court of law when the case is on the law side. General Order No. 37 in Bankruptcy clearly provides for the use of equity process by a court of bankruptcy. It may be that the court could, under the provisions of General Order No. 37, or under its general powers, adopt the proceeding by rule to show cause, and by preserving the substantial rights of the parties make such proceeding a 'plenary suit,' so as to fulfill the law, which requires a plenary suit in cases of this character. It is not necessary to decide that question now. There may be some doubt whether such a proceeding is a 'plenary suit,' but there can be no doubt that the proceeding by filing a complaint in bankruptcy on the equity side and the issuing of a subpoena ad respondendum constitutes a plenary suit and fulfills all the requirements of such a suit. This objection, therefore, cannot be sustained.

The defendant's second ground is that the service does not conform to the state statutes. His contention is that under the statutes of South Carolina, where a suit is brought to set aside a conveyance of land in this state, jurisdiction of a nonresident defendant can only be obtained by first obtaining an attachment of the property in question, followed by publication pursuant to order, or by personal service of the process beyond the state. I cannot accede to this view. If the question were to be determined by state law, I would be compelled to hold that the personal service upon the nonresident in this case would be sufficient, and a preliminary attachment neither necessary nor proper. See section 392, Code of Civil Procedure of South Carolina of 1922, vol. 1. On this point the defendant assumes, for the sake of argument, that the plaintiff is correct in his contention that the state practice is applicable under the Conformity Act. R.S.U.S. Sec. 914 (Comp. St. Sec. 1537). But the Conformity Act expressly excepts equity cases, and section 913, R.S.U.S. (Comp. St. Sec. 1536), expressly provides that the process, forms, and modes of proceeding in equity shall be according to the principles, rules, and usages of the court of equity, except where otherwise provided by statute or rules of court made in pursuance thereof. It is unnecessary to cite the numerous cases which recognize and enforce this principle. See Boyle v Zacharie, 6 Pet. 648, 8 L.Ed. 527; Waldo v. Wilson (C.C.A. 4th Circuit), 231 F. 658, 145 C.C.A. 540. Moreover, as I shall hereafter show in considering defendant's third ground of objection, Congress has provided a method of service in a case of this character and this method is exclusive. Therefore, having reached the conclusion that the state practice is not applicable, it is unnecessary to consider at length whether the service is in accordance with the state...