TITLE VI. COURTS OF BANKRUPTCY, THEIR JURISDICTION, ORGANIZATION AND POWERS. ACT OF 1898, CH. 1, SEC. 1. * * * * * (16) Definition.— Judge shall mean a judge of a court of bankruptcy, not including the referee. CH. 2, § 2. Creation of Courts of Bankruptcy and Their Jurisdiction.-That the courts of bankruptcy as hereinbefore defined, viz., the district courts of the United States in the several States, the supreme court of the District of Columbia, the district courts of the several Territories, and the United States courts in the Indian Territory and the District of Alaska, are hereby made courts of bankruptcy, and are hereby invested, within their respective territorial limits as now established, or as they may be hereafter changed, with such jurisdiction at law and in equity as will enable them to exercise original jurisdiction in bankruptcy proceedings, in vacation in chambers and during their respective terms, as they are now or may be hereafter held, to (1) adjudge persons bankrupt who have had their principal place of business, resided, or had their domicile within their respective territorial jurisdictions for the preceding six months, or the greater portion thereof, or who do not have their principal place of business, reside, or have their domicile within the United States, but have property within their jurisdictions, or who have been adjudged bankrupts by courts of competent jurisdiction without the United States and have property within their jurisdictions; (2) allow claims, disallow claims, reconsider allowed or disallowed claims, and allow or disallow them against bankrupt estates; (3) appoint receivers or the marshals, upon application of parties in interest, in case the courts shall find it absolutely necessary, for the preservation of estates, to take charge of the property of bankrupts after the filing of the petition and until it is dismissed or the trustee is qualified; (4) arraign, try, and punish bankrupts, officers, and other persons, and the agents, officers, members of the board of directors or trustees, or other similar controlling bodies, of corporations for violations of this Act, in accordance with the laws of pro cedure of the United States now in force, or such as may be hereafter enacted, regulating trials for the alleged violation of laws of the United States; (5) authorize the business of bankrupts to be conducted for limited periods by receivers, the marshals, or trustees, if necessary in the best interests of the estates; (6) bring in and substitute additional persons or parties in proceedings in bankruptcy when necessary for the complete determination of a matter in controversy; (7) cause the estates of bankrupts to be collected, reduced to money and distributed, and determine controversies in relation thereto, except as herein otherwise provided; (8) close estates, whenever it appears that they have been fully administered, by approving the final accounts and discharging the trustees, and reopen them whenever it appears they were closed before being fully administered; (9) confirm or reject compositions between debtors and their creditors, and set aside compositions and reinstate the cases; (10) consider and confirm, modify or overrule, or return, with instructions for further proceedings, records and findings certified to them by referees; (11) determine all claims of bankrupts to their exemptions; (12) discharge or refuse to discharge bankrupts and set aside discharges and reinstate. the cases; (13) enforce obedience by bankrupts, officers, and other persons to all lawful orders, by fine or imprisonment or fine and imprisonment; (14) extradite bankrupts from their respective districts to other districts; (15) make such orders, issue such process, and enter such judgments in addition to those specifically provided for as may be necessary for the enforcement of the provisions of this Act; (16) punish persons for contempts committed before referees; (17) pursuant to the recommendation of creditors, or when they neglect to recommend the appointment of trustees, appoint trustees, and upon complaints of creditors, remove trustees for cause upon hearings and after notices to them; (18) tax costs, whenever they are allowed by law, and render judgments therefor against the unsuccessful party, or the successful party for cause, or in part against each of the parties, and against estates, in proceedings in bankruptcy; and (19) transfer cases to other courts of bankruptcy. Nothing in this section contained shall be construed to deprive a court of bankruptcy of any power it would possess were certain specific powers not herein enumerated. ACT OF 1867, § 4972.- The jurisdiction conferred upon the district courts as courts of bankruptcy shall extend First. To all cases and controversies arising between the bankrupt and any creditor or creditors who shall claim any debt or demand under the bankruptcy. Second. To the collection of all the assets of the bankrupt. Third. To the ascertainment and liquidation of the liens and other specific claims thereon. Fourth. To the adjustment of the various priorities and conflicting interest of all parties. Fifth. To the marshaling and disposition of the different funds and assets, so as to secure the rights of all parties and due distribution of the assets among all the creditors. Sixth. To all acts, matters, and things to be done under and in virtue of the bankruptcy, until the final distribution and settlement of the estate of the bankrupt, and the close of the proceedings in bankruptcy.1 Provided, That the court having charge of the estate of any bankrupt may direct that any of the legal assets or debts of the bankrupt, as contradistinguished from equitable demands, shall, when such debt does not exceed five hundred dollars, be collected in the courts of the State where such bankrupt resides, having jurisdiction of claims of such nature and amount. Statute revised - March 2, 1867, ch. 176, § 1, 14 Stat. 517. Prior Statutes Aug. 19, 1841, ch. 9, § 6, 5 Stat. 445. An assignee can not maintain an action in a State court to recover the value of property exceeding $500 transferred to the defendant in violation of the bankruptcy law. Olcott v. Maclean, 16 B. R. 79; s. c. 17 N. Y. Supr. 277. If the assignee and another claim a fund, the holder may file a bill of interpleader in a State court, for the proceeding is not an action to collect the assets. B. & M. Ins. Co. v. Davenport, 17 N. Y. Supr. 264. Construction.- In order to avoid all doubt, the section goes on to enumerate certain specific classes of cases to which the jurisdiction shall be deemed to extend, not by way of limitation, but in explanation and illustration of the generality of the preceding language. In re William Christy, 3 How. 292; In re Dudley, 1 Penn. L. J. 302; Mitchell v. Manuf. Co., 2 Story, 648; in re L. Glaser, 1 B. R. 336; s. c. 2 Ben. 180; s. c. 1 L. T. B. 57. It is more logical to construe this section throughout as giving the most ample powers to the district courts to conduct and settle the proceedings in bankruptcy, but as not relating to suits at law or in equity between the assignee and third persons, which are regulated by the second section. Shearman et al. v. Bingham et al., 5 B. R. 34; s. c. 7 B. R. 490; s. c. 3 C. L. N. 258; Jobbins v. Montague, 6 B. R. 509. 1 So amended by act of June 22, 1874, ch. 390, § 2, 18 Stat. 178. Congress meant to provide a system capable of entire self-execution by the national tribunals without the assistance or co-operation of the States, if the parties interested should choose to rely on the national courts. The jurisdiction given to the district courts is ample for all such purposes. Mitchell v. Manuf. Co., 2 Story, 648; Zahm v. Fry, 9 B. R. 546; s. c. 21 Pitts. L. J. 155; s. c. 31 Leg. Int. 197. In the absence of this clause, it might well be doubted whether the district court would have had jurisdiction of an action brought by the assignee for the recovery of a debt due, or property belonging to the bankrupt, when both parties were citizens of the same State. To remove such doubt was the purpose of the clause, and not at all to deprive State courts of jurisdiction of such actions, when vested in them by the laws and Constitutions of the States. Cook v. Whipple, 9 B. R. 155; s. c. 55 N. Y. 150. The last clause of this section is manifestly added in order to prevent the force of any arguident that the specific enumeration of the particular classes of cases ought to be construed as excluding all others not enumerated. In re William Christy, 3 How. 292. Jurisdiction of a bankruptcy court may be impeached in collateral actions. Isett v. Stuart, 16 B. R. 191. Residence, or carrying on business, in the district for six months is a Jurisdictional fact, and the petition must contain an allegation showing it. But, upon application for discharge, the creditors may show that the alleged ground of jurisdiction did not exist. In re Beals, 17 B. R. 107. Under law of 1867, court had no power in voluntary proceedings to adjudicate any person a bankrupt who was not a citizen of the United States at time of filing petition, though doing business within the district. In re Burton & Watson, 17 B. R. 212. Where want of jurisdiction appears upon the petition in bankruptcy the consent of parties can not give jurisdiction, and the court, of its own motion, should take notice of the point. In re Hopkins v. Carpenter et al., 18 B. R. 339. Where the bankruptcy court has adjudged a claim to be a lien upon property of the bankrupt, it has jurisdiction of an action to enforce such lien against third parties who have purchased said property subject to the lien at a sale by the assignee. Bucknam v. Dunn et al., 16 B. R. 470. Bankruptcy court has full jurisdiction over the wife's "specific claim " to a settlement out of the bankrupt estate; and her coming voluntarily into the bankruptcy court, by petition, to assert that claim gives the court jurisdiction, personally as to herself, to ascertain and liquidate that claim. In re Campbell, 17 B. R. 4. The district court has jurisdiction of a controversy as to the ownership of a fund in the hands or under the control of the assignee in bankruptcy without regard to residence of the parties in interest. In re Sabin, 18 B. R. 151. Where such controversy is pending, the court will detain such fund until the rights of the parties thereto have been determined by such suit. Ibid. Where a wife's separate estate has been changed from one form of investment to another, by agreement between herself and her husband, and before the title to the property newly acquired had been made to her, the husband becomes bankrupt, the bankruptcy court, as a court of equity, will treat that as done which ought to be done, and decree a settlement upon the wife of property acquired with her separate means. In re Campbell, 17 B. R. 4. On application by assignee for his discharge any misconduct on his part in respect to estate is a proper subject for examination. In re Peabody, 16 B. R. 243. District court not deprived of jurisdiction to entertain proceedings for a composition by the fact that petition to review an order refusing to discharge the bankrupt is pending in Circuit Court (Law of 1867). In re Odell, 16 B. R. 501. In such case bankrupt should be required to pay opposing creditor expenses and disbursements, other than counsel fees, incurred in opposing the discharge, as a condition of and prior to confirmation of the composition. Ibid. The district court which granted a discharge alone has jurisdiction of a proceeding to annul it. Nicholas v. Murray, 18 B. R. 469. A suit by an assignee to set aside a fraudulent conveyance made by the bankrupt, after his discharge, of property concealed prior thereto is not a suit to annul such bankrupt's discharge, and may, therefore, be brought in the Circuit Court. Ibid. Bankruptcy court has a right to and will, on application, enjoin creditors from harassing the debtor as long as his composition proceeding is pending. In re Richard H. Hinsdale, 16 B. R. 530. A general provision in a resolution of composition, under law of 1867, that payment of so much money at such time or times, etc., shall be accepted by the creditors in satisfaction of the debts due them, is not, as respects the creditors, an executing provision which the court is authorized to enforce. A tender of the money according to the terms of such composition is equivalent to payment, but the court can not imprison the creditor for contempt to compel him to physically take the offered money. Ibid. The moment a voluntary petition is filed, all the property of a bankrupt in possession or in action which is included in the inventory and schedules comes into the prehensory power of the court as fully as if it were in the actual and visible presence of the court, and consequently is under its protection and within its exclusive control. Vyrd v. Harrold et al., 18 B. R. 433. The bankrupt had given certain mortgages upon his exempt property, in which he had waived all his exemption rights under the State Constitution and laws, and under the bankruptcy act, in and to the property mortgaged, and also his right to a discharge in bankruptcy. The assignee left the property in the hands of the bankrupt, as custodian, until he could procure the schedules and proceed to administer the estate. The mortgages were afterward foreclosed, and the executions levied on the mort |