In re Porter

• Decision Date: 16 March 1901
• Citation: 109 F. 111
• Parties: In re PORTER et al.
• Court: U.S. District Court — District of Kentucky

109 F. 111

In re PORTER et al.

United States District Court, D. Kentucky.

March 16, 1901

Wright & McElroy and Grubbs, for Warren Deposit Bank.

W. B Gains and Attilla Cox, Jr., for trustee.

EVANS District Judge.

The trustee herein has filed a petition in these proceedings praying the court, upon the averments therein made, to enjoin certain creditors of the bankrupt, who, after the adjudication, brought a suit in the Warren circuit court to foreclose and enforce a certain mortgage lien upon the bankrupt's property, from proceeding further in the action in the state court. Upon the showing of the respondents, it would seem that the mortgaged property was probably insufficient to pay the mortgage debts, but the trustee insists otherwise, and has moved the court not only for an injunction pendente lite, but also for a reference of these proceedings for the purpose of ascertaining the real amount of the debts of the mortgage creditor, after deducting therefrom certain offsets and counterclaims, and certain credits, which the trustee claims should be allowed. The creditors have also demurred to the petition.

Amidst the shadows cast by recent decisions upon the bankruptcy practice at least where assets and creditors are concerned the bankruptcy court can rarely see clearly what is the exact course to be pursued in bankruptcy proceedings until higher courts have expressly marked it out; but it seems to me that the one which gives to the state courts the amplest, and to the bankruptcy courts the narrowest, control over such proceedings, will be the one which the case of Bardes v Bank, 2 Nat.Bankr.N. 725, 178 U.S. 538, 20 Sup.Ct. 1000 44 L.Ed. 1175, and the course of judicature which must be founded upon it, will sanction. Without that, however, this court would be inclined in this case to say that the whole matter of the mortgage debt, and all the controversies growing directly out of it, could be comprehensively and more conveniently treated in the proceedings in the state court, where all matters between the conflicting interests of the various mortgage creditors and the trustee will doubtless be fairly and intelligently adjusted and adjudicated. The trustee, who stands for all the general creditors, and who, in a certain sense, represents all creditors of the bankrupt, can wisely and usefully intervene in the action in the state court, and there litigate most, if not all, the questions involved...