Lambert v. National Hog Co. ( 1919 )

Opinion by

Head, J.,

The jurisdiction of the State and federal courts, under the state of facts here developed, were never concurrent nor intended to be. When the jurisdiction of the State court attached it was complete and exclusive, and its receiver was lawfully invested with the powers of the court to deal with the property of the insolvent. A little later on, when the jurisdiction of the federal court attached, by the institution of proceedings in bankruptcy, that jurisdiction at once became paramount and exclusive. The power of the State court and its receiver, over the property of the bankrupt, automatically ended save only for the single purpose of having the receiver properly account, to the court which created him, for what he had done under its orders. If that account, as confirmed, showed a balance in his hands, with the payment of that balance to the receiver or trustee in bankruptcy, the receiver of the State court would have discharged his trust in an orderly and lawful manner. Had this course been followed, no trouble of any kind could have ensued and no occasion could have arisen for even an apparent clash between courts whose respective rights and powers are clearly defined by law.

It appears, however, that the receiver appointed by the State court conceived it to be his duty to resist, in the federal court and otherwise, the appointment of a receiver in bankruptcy and the execution by him of the powers resulting from his appointment. These efforts were futile and resulted in nothing save the fruitless expenditure of time and money. The receiver of the State court ultimately filed his account and took credit therein for considerable sums representing the expenditures incurred in the manner stated. The learned court below disallowed a number of these items, aggregating something over eight hundred dollars, and surcharged the accountant with the amount thereof. The reason for this action is thus stated in the opinion filed by his Honor Judge Brown in disposing of exceptions to the account: “These items were for services rendered and disbursements made after the filing of the petition in bankruptcy and were in connection with contesting the right of the federal court to appoint a receiver and contesting the rights of said federal receiver. See Randolph v. Scruggs, 190 U. S. 533.”

Assuming, as we do, that this statement by the learned judge correctly portrays the nature and character of the services rendered and the disbursements made, we are of opinion his action in surcharging the accountant was correct. If indeed such services and disbursements were of value to the bankrupt’s estate, the federal court is open to hear and adjudicate such a claim. We do not understand that any services performed or disbursements made in the items referred to were performed or made under any order of the State court appointing the receiver. The assignments of error are overruled. ,

The appeal is dismissed at the costs of the appellant.