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Catron

United States Supreme Court

44 U.S. 292

Ex parte City Bank of New Orleans


Mr. Justice CATRON.

By the 14th section of the Judiciary Act this court has power to issue writs proper and necessary for the exercise of its jurisdiction; having no jurisdiction in any given case, it can issue no writ: that it has none to revise the proceedings of a bankrupt court is our unanimous opinion. So far we adjudge; and in this I concur. For further views why the prohibition cannot issue, I refer to the conclusion of the principal opinion. But a majority of my brethren see proper to go further, and express their views at large on the jurisdiction of the bankrupt court. In this course I cannot concur; perhaps it is the result of timidity growing out of long established judicial habits in courts of error elsewhere, never to hazard an opinion where no case was before the court, and when that opinion might be justly arraigned as extra-judicial, and a mere dictum by courts and lawyers; be partly disregarded while I was living, and almost certainly be denounced as undue assumption when I was no more. A measure of disregard awarded with an unsparing hand, here and elsewhere, to the dicta of state judges under similar circumstances: and it is due to the occasion and to myself to say, that I have no doubt the dicta of this court will only be treated with becoming respect before the court itself, so long as some of the judges who concurred in them are present on the bench; and afterwards be openly rejected as no authority-as they are not.

The case standing in the District Court of Louisiana will test it as well as another. The application for a prohibition was brought before us at last term; then the late Mr. Justice Baldwin was here, and one other of the judges now present was then absent; had the matter not then been laid over on advisement, and a decision been had adverse to our jurisdiction to award the writ; and an opinion been expressed by the majority of the judges then present, against the legality of the proceeding in the bankrupt court, declaring it void, and that in the state court valid; would the bankrupt court be bound to conform to such opinion; would it overrule the instructions given in the particular case by the Circuit Court on the questions adjourned, dismiss the petition of Christy, the assignee, and let the decree and sale foreclosing the mortgage made by the state court stand? Will the bankrupt court of Pennsylvania be bound, either judicially or in comity, by the opinion now given by a majority of the judges present, to overthrow that of Mr. Justice Baldwin in the case hereto appended; or is it bound to conform? Are the bankrupt courts in all the districts that have held the state proceedings on liens to be valid, and not subject to their supervision, now bound to suppress such proceedings on the suggestion of assignees that they were erroneous or inconvenient, regardless of proof, as was done in Louisiana, and thereby overhaul cases in great numbers supposed to be settled? Certainly not. This court has no power over the bankrupt courts, more than they have over this court; the bankrupt law has made them altogether independent, and their decrees as binding as ours, and as final. We have as little power to control them as the state courts have; they may concur with the reasoning of either, or neither, at discretion. I therefore think we should refrain from expressing any extra-judicial opinion on the present occasion; we did so in Nelson v. Carland, 1 How., 265, a case involving the constitutionality of the bankrupt law, and I then supposed most properly, by the majority of the court, who thought we had no jurisdiction: a more imposing application, requiring an opinion, could not have been presented, as twelve hundred cases depended on the decision of the District Court of Missouri, which was opposed to the constitutionality of the law; and to revise it the case was brought here. So in Dorr's application, at the present term, for a writ of habeas corpus, the same course was pursued. That application and this are not distinguishable in principle: in neither had this court power to bring a case for judgment into it; there, and here, we held nothing was before us, or could be brought before us. With this course I would now content myself, was it not that by acquiescing in silence with the opinion of my brethren I might be supposed to have agreed with them in the course pursued; and also in the views expressed in the affirmance of the jurisdiction exercised under the bankrupt law by the Circuit Court of Eastern Louisiana; to both of which my opinion is adverse, and that most decidedly. The case presented to that court was this:-- In 1839, Walden gave to the City Bank a mortgage to secure the payment of $200,000 loaned him, on a plantation and town lots.

In 1840, he instituted a suit in the District Court of the state, in New Orleans, to set the mortgage aside as void; a trial was had, and the court adjudged the mortgage valid; from this Walden appealed to the Supreme Court of Louisiana, and that court affirmed the judgment.

The bank then proceeded in the District Court of the state to foreclose the mortgage, and on the 17th of May, 1842, an order of seizure and sale was made; and an actual seizure of the property was executed on the 19th May. The sale took place on the 27th of June.

The property was sold by lots, after appraisement, in conformity to the laws of Louisiana, and the bank became the purchaser at the price of $160,000.

That the sale was made in regular and due form, according to the modes of proceeding in the state courts, cannot be controverted.

On the 18th of June, 1842, Walden filed his petition for the benefit of the bankrupt law; and on the 18th of July was declared a bankrupt, and an assignee appointed. The $200,000 was on Walden's creditor list, but the bank refused to prove its debt, and relied on the decree of foreclosure, and the force of its lien, by the mortgage.

Christy, the assignee, filed his petition in the bankrupt court, and as part of the proceeding in bankruptcy, to have the sale declared void: 1. Because it was made after Walden applied for the benefit of the bankrupt law. 2. Because the sale had been unfairly conducted. 3. Because the proceeding in the state court was erroneous. 4. Because the debt was affected with usury, and therefore the mortgage void originally; and should be so decreed by the bankrupt court.

The bank appeared, and pleaded to the jurisdiction of the bankrupt court; and relied on the proceedings of the state court as valid by answer. Exceptions were taken to this plea and answer, which were adjourned to the Circuit Court; there it was adjudged, and the District Court instructed:

1. That it had full and ample jurisdiction to try all the questions set forth in the petition of the assignee; and to try, adjudge, and determine the same between the parties.

2. That the seizure and sale of the state court were void; and that the District Court of the United States do declare it void.

3. That the District Court has full power and authority to try and determine the validity of the mortgage; and if proved on the trial void, to declare it so, and to make a decree ordering the property to be sold for the benefit of the creditors generally; but if found valid, the bank to have the benefit of its lien.

This decree pronounced void the judgment of the Supreme Court of Louisiana, affirming that of the inferior court declaring the mortgage valid, and not affected with usury; which was conclusive between Walden and the bank before the bankrupt law existed. 2. It declared void the decree and order of seizure made before Walden applied for the benefit of the act-and it declared void the sale: In short, it annulled all the judgments of the state courts, and assumed to extinguish the title acquired under them; and has extinguished in form and fact, if the views of a majority of my present brethren be correct, a title indisputable according to the laws of Louisiana standing alone; this is manifest from the slightest examination of the fact, and laws applicable to them. On the 18th of July the decree declaring Walden a bankrupt was passed; up to this date he might or might not be declared a bankrupt, either at his own instance, or that of the court; therefore he was a proper party before the state court until that time; afterwards he was represented by his assignee; his property was under execution when he was declared a bankrupt; if he had then died, still the duty of the officer would have been to sell; the execution having commenced, a natural or civil death could not defeat it, as the property was in the custody of the law.

If it be true that this title is void, it follows every other is void where a sale has taken place after the defendant to the execution (issued by a state court) had applied for the benefit of the bankrupt law; and this whether the execution was awarded in the form usual to courts of law, or by decree in a court of chancery, ordering a seizure and sale by force of the decree. Every sheriff, or commissioner in chancery, executing such writ or decree, must have been a trespasser; and all persons taking under such sales deluded purchasers. In the eighth circuit there are very many such cases beyond doubt; they are founded on my opinion acting with the district judges, who fully concurred with me, that such sales were lawful, and the titles acquired under them valid. In two other circuits at least, similar views have been entertained, and no doubt similar consequences have followed. It is therefore due to interests so extensive, affecting so many titles, that they should not be overthrown until a case calling for the authoritative adjudication of this court is presented involving them, and therefore these brief views have been expressed; not on the jurisdiction of the bankrupt courts generally; but on the precise facts presented as the grounds on which the prohibition was demanded.

On the force of the lien, and the remedy to enforce it, as a right excepted from the bankrupt law, I have said nothing, because my late brother Baldwin was called on to follow the decision given in Louisiana and refused. As he decided under the responsibility of passing on men's rights, and from whose judgment there was no appeal, his opinion is judicial, and authoritative throughout his late circuit, whereas mine on the present occasion would be extra-judicial, and therefore I append his instead of any I may entertain individually.

In the aforegoing opinion of Mr. Justice CATRON, Mr. Justice DANIEL concurs. [8]

NotesEdit

^8  This opinion is also approved in Matter of Daxis, 8 Bank. Reg., 170.

This work is in the public domain in the United States because it is a work of the United States federal government (see 17 U.S.C. 105).