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Acme Harvester Co. v. Beekman Lumber Co., 222 U.S. 300 (1911)

Acme Harvester Company v. Beekman Lumber Company

No. 9

Argued April 25, 1911

Decided December 18, 1911

222 U.S. 300


The denial of a right claimed under the judgment of a federal court lays the foundation for a review in this Court, and where the state court proceeds to judgment on the ground that bankruptcy proceedings against the defendant had been concluded by denial of adjudication and the injunction against suits in the state court thereby dissolved, this Court has jurisdiction.

A finding by the state court that bankruptcy proceedings had been concluded by denial of adjudication does not conclude this Court on writ of error to review the judgment of the state court. Where the state court bases its jurisdiction entirely on the construction given a federal statute by it adversely to contention of plaintiff in error, this Court has jurisdiction to review the judgment. Rector v. Bank, 200 U. S. 405. The filing of a petition in bankruptcy is a caveat to all the world, and, in effect, an attachment and injunction. Mueller v. Nugent, 184 U. S. 1, 184 U. S. 14. It is the duty of the bankruptcy court to promptly determine the question

Page 222 U. S. 301

of adjudication and to proceed with the election of a trustee and administration of the estate, and it cannot, even if for the benefit of creditors, deny an adjudication and hold jurisdiction over the estate for the purpose of allowing some of the creditors to effect a reorganization and distribution of the property.

With the denial of adjudication, the jurisdiction of the bankruptcy court ends and the property becomes subject to ordinary methods and jurisdiction of courts of competent jurisdiction.

There is no power in the district court to issue an ex parte injunction, without notice or service of process, attempting to restrain a creditor suing in a state outside the jurisdiction of the district court. Ancillary jurisdiction in aid of the jurisdiction of the district court exists under the Act of June 25, 1910, c. 412, 36 Stat. 838. In re Wood & Henderson, 210 U. S. 246, distinguished.

215 Mo. 221 affirmed.

The facts, which involve the jurisdiction of the bankruptcy court, are stated in the opinion.

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