In re Havens

• Decision Date: 13 April 1921
• Docket Number: 195.
• Citation: 272 F. 975
• Parties: In re HAVENS et al. Petition of NILES.
• Court: U.S. Court of Appeals — Second Circuit

272 F. 975

In re HAVENS et al. Petition of NILES.

No. 195.

United States Court of Appeals, Second Circuit.

April 13, 1921

On May 24, 1907, an involuntary petition was filed against Havens who after due adjudication was discharged on November 26 1910; such discharge being 'from all debts and claims which are made provable' by the act and which existed on May 24, 1907.

In September, 1907, the petitioner, Niles, brought suit in the Supreme Court of New York against Havens upon a claim which may be assumed (but not found) to have been both provable and dischargeable in bankruptcy. Upon Havens' default judgment was entered against him, but in 1918 the state court opened the default, vacated the judgment, and permitted Havens to interpose an answer wherein, among other defenses he pleaded the aforesaid discharge. The issue thus framed coming on for trial, the plaintiff, petitioner Niles, had verdict and judgment.

It does not appear whether Niles had been scheduled as a creditor, but it seems now admitted that he did file a claim in the bankruptcy proceedings and received a dividend, but that these facts were not testified to in the state court trial. It is now alleged (and may be assumed as true) that such failure of proof arose from the difficulty of finding long unused and probably misplaced papers in the office of the clerk of the District Court for the Eastern District of New York.

Shortly after the rendition of this judgment Havens applied to the court below for an order perpetually restraining Niles from issuing execution upon the judgment entered as aforesaid in the Supreme Court of New York, and also enjoining him from taking any other proceedings to collect or enforce said judgment. Such order was granted, and this petition has been filed to revise the same.

John J. Cunneen, of New York City (William W. Niles, of New York City, of counsel), for petitioner.

Cullom & Rinke, of New York City (Neil P. Cullom and William E. Collins, both of New York City, of counsel), for Havens.

Before WARD, HOUGH, and MANTON, Circuit Judges.

HOUGH Circuit Judge (after stating the facts as above).

Under the Constitution bankruptcy is wholly a creature of statute, and under the present act of 1898 no authority can be found for staying suits by or against bankrupts, except section 11 (Comp. St. Sec. 9595). This is true, notwithstanding that upon other and more general principles of law the bankruptcy court may stay suits, even in state courts, which interfere with the administration of the estate in charge of such bankruptcy court. In re Friedlaender, 233 F. 250, 147 C.C.A. 256; In re Amy (C.C.A.) 263 F. 8.

It seems to have been thought below that,...