In re United Wireless Telegraph Co.

• Citation: 192 F. 238
• Parties: In re UNITED WIRELESS TELEGRAPH CO.
• Decision Date: 28 November 1911
• Court: U.S. District Court — District of New Jersey

192 F. 238

In re UNITED WIRELESS TELEGRAPH CO.

United States District Court, D. New Jersey.

November 28, 1911

Saul S Myers, for petitioner.

French & Richards, for Floyd H. Bradley, Receiver of International Wireless Telegraph Co.

RELLSTAB District Judge.

The petitioners, Seldon Bacon, John H. Hill, and Philip G Clifford, trustees of the United Wireless Telegraph Company, bankrupt, seek to obtain a stay of the suit pending in the Court of Chancery of the state of New Jersey instituted by Floyd H. Bradley, receiver of the International Wireless Telegraph Company against said United Company, and a direction that such receiver--

'present his claim to the United States District Court for the District of Maine for determination, or, if the court shall not so direct, that it in lieu thereof stay the said suit in the Court of Chancery of New Jersey, for a reasonable time, to enable your petitioners to appear in said court and answer the said suit and prepare the same for trial and try the same.'

Petitioners were appointed trustees of the last-named company by the United States District Court for the District of Maine, on a petition in bankruptcy filed in said court on the 7th day of July, 1911.

Floyd H. Bradley was appointed receiver, by the Court of Chancery of the state of New Jersey, of the International Company, a corporation of that state, against which insolvency proceedings had been instituted in said Court of Chancery. He, as such receiver, on the 14th day of September, 1909, instituted the suit sought to be stayed. The purpose of that suit is to set aside a certain conveyance of property made by the International Company to the American De Forrest Wireless Telegraph Company, and a conveyance of the same property made by the latter to the United company, upon the ground that the first conveyance was without consideration and in fraud of the creditors of the International Company, and that the conveyance to the United Company was made without consideration and with knowledge on the part of said last-named company of the want of consideration and fraud charged concerning the first conveyance. To this suit the United Company interposed a demurrer, and thereafter, upon its being overruled, its answer. More than four months thereafter the petition in bankruptcy was filed as aforesaid.

The suit in the state court is one within its cognizance, and, having first obtained such jurisdiction, it should be permitted to finally dispose of it, not only because of the spirit of comity that prevails among courts having concurrent jurisdiction, but also because of necessity, as otherwise the administration of justice would be seriously hampered, if not scandalized, unless by the institution of the bankruptcy proceedings the United States District Court obtained exclusive jurisdiction over the subject-matter.

Section 720, Rev. Stat. U.S., provides:

'The writ of injunction shall not be granted by any court of the United States to stay proceedings in any court of a state, except in cases where such injunction may be authorized by any law relating to proceedings in bankruptcy.' 1 U.S.Comp.St. 1901, p. 581.

Section 11 of the bankruptcy act of 1898 (Act July 1, 1898, c. 541, 30 Stat. 549 (U.S. Comp. St. 1901, p. 3426)) provides:

'a-- A suit which is founded upon a claim from which a discharge would be a release, and which is pending against a person at the time of the filing of a petition against him, shall be stayed until after an adjudication or the dismissal of the petition; if

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