Morgan v. Thornhill

• Decision Date: 01 December 1870
• Citation: 20 L.Ed. 60,78 U.S. 65,11 Wall. 65
• Parties: MORGAN v. THORNHILL
• Court: U.S. Supreme Court

78 U.S. 65

20 L.Ed. 60

11 Wall. 65

MORGAN v. THORNHILL.

December Term, 1870

ON motion to dismiss an appeal from the Circuit Court from the District of Louisiana; the case being this:

'An act to establish a uniform system of bankruptcy throughout the United States,' approved March 2, 1867,¹ and which gives to the District Courts exclusive original jurisdiction in matters of bankruptcy, authorizes them to declare corporations bankrupt upon certain proceedings had.

By the 2d section of the act it is enacted:

'That the several Circuit Courts of the United States, within and for the districts where the proceedings in bankruptcy shall be pending, shall have a general superintendence and jurisdiction of all cases and questions arising under this act, and except when special provision is otherwise made, may upon bill, petition, or other process of any party aggrieved, hear and determine the case as a court of equity. The powers and duties hereby granted may be exercised either by said court or by any justice thereof, in term time or in vacation.'- By the 8th section of the act it is further provided:

'That appeals may be taken from the District Court to the Circuit Courts in all cases in equity, and writs of error may be allowed to said Circuit Courts in cases at law, under the jurisdiction created by this act, when the debt or damages claimed amount to more than $500; and any supposed creditor may appeal whose claim is wholly or in part rejected, or an assignee who is dissatisfied with the allowance of a claim may appeal from the decision of the District Court to Circuit Court.'

And by the 9th:

'That in cases arising under this act no appeal or writ of error shall be allowed in any case from the Circuit Courts to the Supreme Court of the United States, unless the matter in dispute exceeds $2000.'

Under this bankrupt act the District Court at New Orleans on the 11th of January, 1870, on the petition of one Thornhill, a creditor, decreed the Bank of Louisiana to be bankrupt. The charter of the bank had previously to this date been declared, on proceedings in one of the State courts, forfeited under a statute of the State, and its affairs had been placed in the hands of one Morgan and others, as commissioners, to liquidate them. These commissioners were in possession of the property of the bank. The decree of the District Court in bankruptcy superseded the action under the State law, ordering as it did 'that the parties holding any of the property of the said bank, surrender the same to the proper officers of this court,' and being followed up soon afterwards (June, 1870) by injunctions against the commissioners to refrain and desist from making any transfer or disposition of any part of the assets of the bank, or any payment out of them, and from all litigation or compromise about them.

Hereupon Morgan and the other commissioners filed their petition (no appeal being in any way taken in the matter) in the Circuit Court for the District of Louisiana. In this they 'represent' what had been done in the District Court; and having set all this forth proceed:- 'Now your petitioners in their said capacities of commissioners of the Bank of Louisiana, respectfully represent that they are aggreived, and the creditors of said bank are also aggrieved and injured by the proceedings, orders, and judgment rendered in said cases, and believe the same to be erroneous and contrary to law; that the issuing and continuance of said injunctions has been, since the month of June last, and still is, working great injury to the creditors of said bank; that petitioners are prohibited thereby from defending or prosecuting the many suits now pending in which the said bank is a party, or to appear and protect its interests in any litigation now pending in which the said bank is interested, or to institute such legal proceedings as are necessary to interrupt prescription on claims held by them as commissioners; that the judgment rendered in said suit is erroneous.'

The petition concluded with this prayer:

'And your petitioners pray that the orders made in said cause be suspended in their operation and legal effect, and that the superintending and revising jurisdiction conferred upon this court in such cases by the act of Congress entitled 'An act to establish a uniform system of bankruptcy throughout the United States,' approved March 2, 1867, may be exercised by your honor, and that the said orders be examined, and, if found not to be warranted by law, set aside or rescinded, and that your petitioners be allowed to proceed with the execution of the trusts conferred upon them by law.'

The Circuit Judge, at chambers, affirmed the action in the District Court, holding that the act of the State of Louisiana was suspended by the Bankrupt Act, and that the proceedings in the State court, under whose judgment the charter of the bank was dissolved and the commissioners appointed, were void for want of jurisdiction.

An appeal was afterwards granted by one of the justices of this court, and the bond approved, and supersedeas directed to be issued, the appeal having been prayed and the bond approved within the ten days from the rendition of the decree.

Mr. C. Cushing, for the creditors in bankruptcy, appellees in the case, now moved to dismiss the appeal.

1st. Because the decree was rendered by the circuit judge by virtue of the special power conferred on the Circuit Court or the judge thereof to exercise 'a general superintendence and jurisdiction of all cases and questions arising under' the Bankrupt Act, conferred by the 1st section of said act, to be exercised by the said Circuit Court or the judge thereof, 'in term time or vacation.' From which class of decree no appeal lies.

2d. Because it was not final.

In support of his motion he argued: The 8th section of the Bankrupt Act regulating appeals, makes no change in the general law of appeals, except in reference to the amount and time within which an appeal must be taken, in which it is less favorable than the general law on regulating appeals.

An appeal, therefore, from the District Court can only be taken to the Circuit Court in the cases in which it can be taken ordinarily; that is, it must be taken from a final decree of the District Court. In all other cases where the Circuit Court acts in matters of bankruptcy, it is by virtue of the special, comprehensive, and almost universal power of superintendence conferred by the 2d section of the act. By that section, the Circuit Court has a general 'superintendence of all cases and questions arising under' the Bankrupt Act. The only exception to this general jurisdiction of superintendence is in the case of appeals and writs of error.

It is submitted that the cases in which an appeal lies to the Supreme Court of the United States under the Bankrupt Act are necessarily limited to such final decrees made in the Circuit Court as have been made in cases brought there by appeal as originating there.

This case did not come into the Circuit Court by appeal from the District Court, nor did it originate in the Circuit Court. It was brought before the circuit judge by petition, invoking the special revisory jurisdiction of the circuit judge. The revisory power given by the 2d section embraces all 'questions' which can arise under the act. The word decree or judgment is not used. Obviously and wisely the action of the Circuit Court on these questions was meant to be summary. On any other view every 'question' that could arise in proceedings in bankruptcy could be brought here, though there was no judgment, no decree, no order.

It is a familiar principle of law, that the appellate jurisdiction of this court does not include a decree under a law conferring a new and special jurisdiction, in which no remedy by appeal is granted.² The decree or order appealed from in this case was made under a law conferring a new and special jurisdiction on the circuit judge. From the exercise of this special jurisdiction no appeal is given. And as this court exercises its appellate jurisdiction only under the acts of Congress, the burden is on the appellants to show that an appeal lies in their case. It is to be noted, too, in this case, that the general superintendence granted to the circuit judge by the 2d section of the Bankrupt Act is to be exercised by him in court or at chambers. This is a controlling fact, to show that no right of appeal was intended to be given from the decisions of the circuit judge in the exercise of this power of superintendence. The exercise of the appellate power of this court is confined almost exclusively to the final judgments or decrees of the Circuit Court rendered in term time. This court, in United States v. Nourse,³ commenting on the fact that in the case then before the court the judge of the court below was authorized to act as chambers, say:

'From a decision of the district judge out of court, how could the government appeal to the Circuit Court?'

2. The decree is not a final decree, having been rendered out of court. Only interlocutory decrees are so rendered.

Messrs. W. M. Evarts and P. Phillips, contra:

The revisory power of the Circuit Court, in one form or another, and it may be by an appeal as well as a petition, extends, in virtue of the 2d section, over the whole matter intrusted to the jurisdiction of the District Court, and if the act had been silent as to an appeal to this court from the Circuit Court, it would have been maintainable under the acts of 1789 and 1803.⁴

But the act is not silent. The 9th section declares that no appeal or writ of error shall be allowed in any case from the Circuit to the Supreme Court, unless the matter in dispute shall exceed $2000. It is accordingly evident that Congress assumed that appeals would be taken from the Circuit Court, and contented itself with alone regulating the amount which gave the jurisdiction. If, therefore, the decree is final, and the amount in...