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Insurance Company v. Comstock, 83 U.S. 16 Wall. 258 258 (1872)

Insurance Company v. Comstock

83 U.S. (16 Wall.) 258


1. Where, under the 41st section of the Bankrupt Act of 1867, a trial by jury is had in the district court in a case of application for involuntary bankruptcy, and exceptions are taken in the ordinary and proper way, to the rulings of the court on the subject of evidence and to its charge to the jury, it writ of error lies from the circuit court when the debt or damages claimed amount to more than $500; and if that court dismiss or declines to hear the matter, a mandamus will lie to compel it to proceed to final judgment.

Page 83 U. S. 259

2. In this case, where the court had dismissed the case because it supposed it had no jurisdiction, a writ of error was dismissed as not a proper remedy, and an intimation given to the court below to reinstate the case and proceed to hear the questions presented by the bill of exceptions.

The Bankrupt Act of 1867, which by its terms applies to all moneyed, business, or commercial corporations as well as to individuals, gives to the district courts of the United States original jurisdiction in all matters and proceedings in bankruptcy. It enacts by its:

"SECTION 2. That the several circuit courts of the United States within and for the districts where the proceedings in bankruptcy shall be pending, shall have a general superintendence and jurisdiction of all cases and questions arising under this act; and, except when special provision is otherwise made, may upon bill, petition, or other proper process, of any party aggrieved, hear and determine the case as in a court of equity."

"Said circuit courts shall also have concurrent jurisdiction with the district courts of the same district, of all suits at law or in equity which may or shall be brought by the assignee in bankruptcy against any person claiming an adverse interest, or by such person against such assignee, touching any property or rights of property of said bankrupt transferable to or vested in such assignee."

A subsequent section, the 41st, after referring to the return day of the summons to the alleged bankrupt, enacts:

"That on such return day or adjourned day . . . the court shall proceed summarily to hear the allegations of the petitioner and debtor, and may adjourn the proceedings from time to time on good cause shown, and shall, if the debtor on the same day so demand in writing, order a trial by jury at the first term of the court at which a jury shall be in attendance, to ascertain the facts of such alleged bankruptcy, and if upon such hearing or trial the debtor proves to the satisfaction of the court, or the jury (as the case may be), that the facts set forth in the petition are not true, or that the debtor has paid and satisfied all liens upon his property (in case the existence of such liens were the sole ground

Page 83 U. S. 260

of the proceeding), the proceeding shall be dismissed and the respondent shall recover his costs."

The act further provides, by sections 8 and 9, as follows:

"SECTION 8. That appeals may be taken from the district to the circuit courts in all cases in equity, and writs of error may be allowed to said circuit courts from said district courts in cases at law under the jurisdiction created by this act, when the debt or damages claimed amount to more than $500; and any supposed creditor whose claim is wholly or in part rejected, or an assignee who is dissatisfied with the allowance of a claim may appeal from the decision of the district court to the circuit court from the same district; but no appeal shall be allowed in any case from the district to the circuit court unless it is claimed and notice given thereof to the clerk of the district court to be entered with the record of the proceedings, and also to the assignee or creditor, as the case may be, or to the defeated party in equity within ten days after the entry of the decree or decision appealed from."

"The appeal shall be entered at the term of the circuit court which shall be first held within and for the district next after the expiration of ten days from the time of claiming the same. But if the appellant in writing waives his appeal before any decision thereon, proceedings may be had in the district court as if no appeal had been taken, and no appeal shall be allowed unless the appellant at the time of claiming the same shall give bond in the manner now required by law in cases of such appeals."

"No writ of error shall be allowed unless the party claiming it shall comply with the statutes regulating the granting of such writs."

"SECTION 9. In cases arising under this act no appeal or writ of error shall be allowed in any case from the circuit courts to the Supreme Court of the United States, unless the matter in dispute in such case shall exceed $2000."

These enactments being in force, certain persons presented a petition in the district court for the Northern District of Illinois, setting forth, in conformity with formal requirements of the act, that the Knickerbocker Insurance Company of Chicago owed debts to an amount exceeding $300,

Page 83 U. S. 261

and that their respective demands exceeded $250, and had made fraudulent preferences. Among these persons were Allen & Mackey, who set forth that the company was indebted to them in the sum of $2,500 under a policy of insurance and had made fraudulent preferences. They prayed, along with other creditors, that the company might be decreed bankrupt.

The company denied the allegations both of debt and acts of bankruptcy, and demanded in writing a trial by jury. On the trial, which was had in regular common law way of a trial by jury, the company excepted to the admission of several items of evidence which the court, against its objection, had received, and also to the charge of the court. Verdict and judgment having been given against the company, the cause was removed by writ of error to the circuit court for the district. The company assigned errors there in a formal way, but when the case came on to be heard, the circuit court, without any consideration or examination of the exceptions taken or errors assigned, dismissed it for want of jurisdiction. Thereupon the company took a writ of error to this Court.

Page 83 U. S. 264

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