In re Francis

• Decision Date: 28 April 1905
• Docket Number: 2,217.
• Citation: 136 F. 912
• Parties: In re FRANCIS et al.
• Court: U.S. District Court — Eastern District of Pennsylvania

136 F. 912

In re FRANCIS et al.

No. 2,217.

United States District Court, E.D. Pennsylvania.

April 28, 1905

Henry J. Scott, for Stanley Francis.

Edgar J. Pershing, Robert M. Anderson, and George Wharton Pepper for receiver.

HOLLAND District Judge.

On March 31, 1905, an involuntary petition in bankruptcy was filed in this court against William H. Latimer, Frank C Marrin, and Stanley Francis individually and trading as the Provident Investment Bureau. On the same day a petition was presented for the appointment of a receiver, in which it is alleged that the 'bankrupts have been engaged in procuring money through the mails by fraudulent representations,' the method being therein set out. It is further stated that William H. Latimer and Frank C. Marrin are fugitives from justice, and their whereabouts are unknown to the petitioner, and that Stanley Francis, known under his various aliases, which are given in the petition, is now in custody charged with the violation of the laws of the United States relating to the fraudulent and improper use of the mails for the purpose of procuring money. The other necessary averments are set forth in the petition, showing that a receiver is absolutely necessary for the preservation of the estate and to take charge of the property of the bankrupts until a trustee is qualified or the petition is dismissed according to law. A receiver was appointed without first giving notice to any of the bankrupts, and on April 4, 1905 a petition was presented by Stanley Francis asking the court to revoke the appointment of the receiver made on the above-mentioned date for the reason that he was not served with notice and allowed to be heard prior to the appointment having been made. He was, however, served with notice the day after the appointment had been made.

This raises the question whether, under these circumstances, a receiver in bankruptcy can be appointed to take charge of the alleged bankrupt's property without first giving him notice and allowing him to be heard on the question of the appointment before it is made. Counsel for Francis claims that, notwithstanding the facts as stated, such an appointment cannot be made without notice without violating the constitutional provision contained in the fifth amendment, wherein it is provided that 'no person shall * * * be deprived of * * * property without due process of law,' and that due process of law requires that notice shall be served upon an alleged bankrupt before a receiver is appointed to take charge of his property. By this constitutional guaranty every arbitrary interference with the property of a person is prohibited, and protects every citizen in the possession, enjoyment, and disposition of his property; but it is not intended by this provision to interfere with the government in determining by what remedies or process legal rights may be asserted or legal obligations be enforced, provided the method of procedure adopted for this purpose gives reasonable notice and affords fair opportunity to be heard before the issues are decided. Iowa Central Railway Co. v. Iowa, 160 U.S. 389, 16 Sup.Ct. 344, 40 L.Ed. 467; Simon v Craft, 182 U.S. 427, 21 Sup.Ct. 836, 45 L.Ed. 1165; Leeper v. Texas, 139 U.S. 462, 11 Sup.Ct. 577, 35 L.Ed. 225; Ludeling v. Schaffe, 143 U.S. 301, 12 Sup.Ct. 439, 36 L.Ed. 313. Due process of law has been defined to be 'a prosecution or suit instituted and conducted according to the prescribed forms and solemnities for ascertaining guilt or determining the title to property. ' Taylor v. Porter, 4 Hill, 140, 40 Am.Dec. 274. 'Law in its regular course of administration through courts of justice.' 2 Kent's Commentaries, 10. 'A law which hears before it condemns; which proceeds upon inquiry and renders judgment only after trial. ' Dartmouth College v. Woodward, 17 U.S. 518, 4 L.Ed. 629 (argument of Mr. Webster). 'Lawful judicial proceeding in a court of competent jurisdiction. ' In re Curry, 1 Civ.Proc.R. (N.Y.) 319. 'A timely and regular proceeding to judgment and execution. ' Backus v. Shipherd, 11 Wend. (N.Y.) 629. 'The application of the law as it exists in the fair and regular course of administrative procedure. ' Harbison v. Knoxville Iron Co. (Tenn.) 53 S.W. 955, 56 L.R.A. 316, 76 Am.St.Rep. 682. 'That kind of procedure which is suitable and proper to the nature of cases, and sanctioned by the established usages and customs of the courts. ' Ex parte Wall. 107 U.S. 265, 2 Sup.Ct. 569, 27 L.Ed. 552. 'Process due according to the law of the land. ' ...