Whitridge v. Taylor

• Decision Date: 31 January 1872
• Citation: Whitridge v. Taylor, 66 N.C. 273 (N.C. 1872)
• Court: North Carolina Supreme Court
• Parties: THOMAS WHITRIDGE v. ALEXANDER P. TAYLOR, Assignee et al.

66 N.C. 273

THOMAS WHITRIDGE

v.ALEXANDER P. TAYLOR, Assignee et al.

Supreme Court of North Carolina.

January Term, 1872.

1. The District Courts of the United States have general original jurisdiction in all matters appertaining to the estate of a bankrupt; and they may exercise extra territorial jurisdiction, in collecting the estate and adjusting the claims of the creditors of the bankrupt, when the Court of Bankruptcy can fairly and fully determine the rights of the parties interested.

2. In all matters of controversy, when the subjects in dispute are of a local character, the rights of the parties must be determined in the local Courts.

3. When a mortgagee, by the terms of the mortgage, has a right to foreclose, when an adjudication in bankruptcy is made, this right cannot be administered by a District Court, sitting as a Court of Bankruptcy in another State. The State Courts can afford a remedy by foreclosure or sale and at the same time allow the assignee to have the full benefit of the Equity of redemption.

Civil action tried before Logan, Judge, at Fall Term 1871, of Mecklenburg Superior Court.

The complaint alleges that the defendants, Austin Doll and Joseph Doll, were the owners, as co-partners, of a valuable tract of land in Mecklenburg county. That in 1869, to sec?? a large debt due the plaintiff, they executed to him a mo?? deed for said lands, with a condition, “that if the ?? interest due, were paid in twelve months then ?? should be void, &c.”

That the money and interest were not paid as stipulated. That since the mortgage was made, the defendants have been declared bankrupts by the District Court of the United States for the District of Maryland. That the other defendant Taylor has been duly appointed assignee in Bankruptcy and has taken a conveyance of all the estate and effects of the said A. and J. Doll.

The complaint demands judgment of foreclosure and a sale of the lands &c.

Service of process was acknowledged by the defendant Taylor.

At Fall Term, 1871, the plaintiff, through his counsel, asked judgment according to the complaint for want of an answer. Pro forma opinion. “Judgment refused for want of information against the assignee in Bankruptcy.” From which ruling plaintiff appealed to the Supreme Court.

Jones & Johnston for plaintiff .

No Counsel for defendants .

DICK, J.

The plaintiff as mortgagee seeks to forclose his mortgage. The mortgage is dated 10th January, 1869, and the time of redemption specified, is twelve months after date. The mortgagors were adjudged bankrupts in the United States District Court for the District of Maryland, and an assignment of all their estate was duly made on the 30th of May, 1871, to an assignee in bankruptcy, the present defendant. This action was commenced in November, 1871, and the question presented by the ruling of His Honor, is, whether a Superior Court of this State has jurisdiction of the case.

The Constitution of the United States, Art. 1, sec. 8, authorizes Congress to establish uniform laws on the subject of bankruptcy, &c. That power was exercised on the 2nd of March, 1867, by the passage of the Bankrupt Act, and all State laws in conflict or inconsistent with the purposes of that Act were at once suspended in their operation upon such subject. 3 Story Com, 4 and 15. Cooley C. L. 18, 4 Wall. 411.

By the 1st section of said Act, original jurisdiction in matters of bankruptcy is conferred upon the United States District Courts. The term original is here used to distinguish this from the supervisory jurisdiction of the Circuit Courts given in the 2d section, but as to State Courts, the jurisdiction of the Courts of bankruptcy is superior and exclusive for the purposes contemplated, except as is otherwise provided for...