McLoughlin v. Knop
| Decision Date | 25 April 1913 |
| Docket Number | 14662. |
| Citation | 214 F. 260 |
| Parties | McLOUGHLIN v. KNOP, Civil Sheriff, et al. |
| Court | U.S. District Court — Eastern District of Louisiana |
John Dymond, Jr., of New Orleans, La., for complainant.
W. O Hart, of New Orleans, La., for Civil Sheriff.
Benjamin Ory, of New Orleans, La., for Gaspar Pietri.
In this matter the trustee of the bankrupt estate of James J. Woulfe filed his bill for the purpose of recovering certain real estate listed on the bankrupt's schedules. The bill alleges that the said real estate had been previously placed by Woulfe in the name of a third person John Wells, for the purpose of putting it beyond the reach of creditors; that Woulfe was adjudicated a bankrupt on February 27, 1913; that thereafter the civil sheriff of the parish of Orleans had seized the said property on March 1, 1913, under a writ issued by the civil district court of the parish of Orleans at the instance of Mrs. P. J. O'Reilly, in a proceeding to foreclose a mortgage via executive; that the civil sheriff had again seized the said property on March 3 1913, at the instance of Gaspar Pietri, in a similar proceeding in the same court; and that the trustee had applied to the state court for an injunction to restrain the civil sheriff and said plaintiffs, which had been denied.
On this showing, and on considering an affidavit of John Wells to the effect that he had no interest in the property and had not signed the mortgage notes, the civil sheriff and the parties plaintiff in the said two suits were cited to show cause why the said proceedings should not be stayed pending the determination of this suit, and in the meantime a restraining order issued. The rule to show cause came on for trial in due course, and it then developed that both suits in the state court were filed on February 24, 1913, and that the orders to issue executory process were signed and demands for payment were served on John Wells on the same day; that a petition for involuntary bankruptcy was filed against Woulfe on February 25, 1913, one day later. He was not adjudicated a bankrupt in the said proceedings, but on his own voluntary petition, on February 27, 1913, in proceedings filed that day.
On the facts as alleged by the bill, the restraining order properly issued, as the state court would have no jurisdiction to foreclose a mortgage after bankruptcy had intervened, without leave of this court and making the trustee a party, and it is well settled that, in matters pertaining to bankruptcy, the federal courts have the right and power to enjoin not only the officers of the state courts but to stay the proceedings of the courts themselves when necessary to enforce their jurisdiction to administer bankrupt estates. Bankruptcy Act of...
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