In re Wells

• Decision Date: 24 February 1902
• Citation: 114 F. 222
• Parties: In re WELLS.
• Court: U.S. District Court — Western District of Missouri

114 F. 222

In re WELLS.

United States District Court, W.D. Missouri, Central Division.

February 24, 1902

Willard P. Hall, for trustees.

James S. Botsford and Sangree & Lamm, for McFarland Carriage Company.

McPHERSON District Judge.

The petition by creditors was filed in this court on the 8th day of November, 1900, against Charles B. Wells, in involuntary bankruptcy proceedings. An injunction, warrant, or process was not asked for. Wells was adjudicated a bankrupt on the 26th day of November, 1900, on the confession of his, filed November 8, 1900, that he had committed the act of bankruptcy charged. November 10, 1900, a receiver was appointed by the referee. On the same day (November 8, 1900) that the proceedings in bankruptcy were instituted, the McFarland Carriage Company prepared a petition in replevin against Wells to recover certain personal property in his possession but which, as alleged, belonged to the carriage company. The petition in replevin was filed in the circuit court of Pettis county on the following day (November 9, 1900), and on that day the writ of replevin was issued, and on that day served and on that day the property in question was reduced to the physical possession of the state court. To restate the case after the petition in bankruptcy was filed, but before the receiver was appointed, and before the adjudication of bankruptcy, the state court took possession of the property now in controversy. The trustee, by direction of the referee appeared in the state court, and asked leave (which was granted) to defend against the action in replevin. He filed his answer there in a year or more ago. The trustee now files in this court his bill in equity, asking that the carriage company, by writ of injunction, be enjoined from the further prosecution of the replevin action in the state court, and that the carriage company be commanded to deliver possession of the property taken under the writ of replevin, over to the trustee, and, if the property cannot be delivered, that the carriage company be required to account to the trustee for the value thereof. The question, therefore, is, does the filing in this court of a petitioner in involuntary bankruptcy, of itself, and before any order is made by this court, give this court jurisdiction of all the property then in the possession of the bankrupt, whether by him owned or not? And if the bankrupt then has possession of the property, but not owned by him, or the question of ownership is disputed, must the claimant have the question of ownership adjudicated by this court, and to the exclusion of the state court, which has taken possession of the property for adjudication?

All agree that the court, state or federal, which first takes possession of the property, retains the possession and the jurisdiction. This is elementary, and cases need not be cited to emphasize the proposition. But the trustee, by counsel argues that the 'possession' does not mean physical possession. This court, by any of its officers, never has had physical possession of the property. And the decision of this question requires a construction of the bankrupt statute of 1898. Counsel for the trustee insists that the mere filing of the petition in involuntary bankruptcy is notice to the world, and no other court must interfere with any property then in the possession of the bankrupt, and that any subsequent interference by a state court is avoided and nullified by the subsequent adjudication of bankruptcy of the debtor. I decline to so hold, and for reasons which seem to me conclusive. Conflicts between courts over the same property should at all times be avoided, if possible, because at times such conflicts are unseemly. The mistake is constantly being repeated, and sometimes by lawyers, by asserting that the United States courts are greater and more commanding than the state courts. I cannot agree to this. The state courts are courts of general jurisdiction, while a federal court is one of limited jurisdiction. Of course, when a federal court once acquires jurisdiction, then such jurisdiction becomes complete. And it is true that on some questions the federal courts have exclusive jurisdiction,-- such as in admiralty and other cases. Under some of the old bankruptcy statutes such has been the case. But it is not so under the act of 1898. But little is gained by reviewing the decisions of the different state supreme courts or of the federal trial courts. Such decisions are not binding on this court, and are in conflict, and cannot be reconciled. And no great headway is made by reviewing the dicta of the writers of opinions of the cases in the supreme court. But light has been given us by six cases decided by the supreme court: Bardes v. Bank, 178 U.S. 524, 20 Sup.Co. 1,000, 44 L.Ed. 1175. That case was a thoroughly considered one. The object sought in that case was, in one respect, just the same as in the case at bar, viz., the trustee wanted to reduce to physical...