Miller v. Mackenzie

Bowin, J., delivered the opinion of the Court. On the 4th of November, 18⁷⁴, the appellant sued out of the Court of Common Pleas, an attachment as mesne process, against Gr. N. Mackenzie, C. B. Mackenzie and C. T. Mackenzie, partners in trade, which was returned by the sheriff, “ laid as per schedule.” The defendants at. January Term, 18⁷⁵, moved to quash the attachment, for various reasons assigned, and afterwards on the 21st of ⁴⁰⁹ May, 1875, filed a special plea, alleging that the defen'dants were duly adjudicated bankrupts upon the 5th of December, 1874, upon the petition of their creditors, filed the 25th of November, 1874; that after said adjudication a meeting of the creditors of said defendants was duly called under the amendatory Act to the National Bankrupt Act, section 17, approved June 22, 1874 ; that at said meeting at which the plaintiff, although present, took no part, and did not vote upon or sign the resolution, a resolution for composition of the debts of said defendants for 25 per cent, cash, was duly passed and confirmed under the provisions of said Act, and the statement required by said Act was duly produced, and therein the name of the plaintiff, his address and the amount of debt due to him were duly shown ; that said resolution and statement'were duly presented to the Judge of the District Court of the United States, for the Maryland District, and said Court duly caused said resolution to he recorded and the said statement to be filed ; that the amount of money properly due said plaintiff under said proceedings for composition was duly tendered to him, and by bim refused, and all the other creditors have accepted said proposition and been paid.

It was agreed by the counsel for the plaintiff and defendants, in the Court below, that the motion to quash should he set down for hearing, upon a statement of facts, substantially the same, as those embodied in the plea, and which we deem it therefore unnecessary to recite. Whereupon tbe Court on the 22nd of May, 1875, ordered that the attachment be quashed, from wbicb order the plaintiff appealed. On behalf of the appellant it is insisted, that the jurisdiction of the State Court, having been asserted before the adjudication in bankruptcy, it cannot be divested except in very clear cases. That the power of Congress over State process for the collection of debts, is implied from the express power conferred on it, to legislate on the subject of bankruptcy, which implied power should not he extended by construction. ⁴¹⁰ The appellees on the other hand contend, that the claim of the appellant, is in direct conflict with the main object of the Bankrupt Laws — the just distribution of the bankrupt’s assets among all his creditors. “ That it is an attempt of one creditor, by a suit based upon an alleged act of bankruptcy, to obtain for himself payment in full at the expense of the other creditors.” * * * * * It is argued that bankrupts who pay the amount of the composition to all the other creditors, are virtually the purchasers of their respective interests in their estates, and if the appellant, can by his attachment, obtain more than the rate of composition, so much the more, are the respective interests of the other creditors, diminished.

The statement of facts admitted, upon which the motion to quash was submitted and decided by the Court below, embraces substantially all the essential conditions, of a composition among the creditors of a bankrupt, prescribed by the 17th section of the Act of Congress of 1874, amendatory of the Act to establish a uniform system of bankruptcy throughout the United States. It is declared by the provisions of the same section, that the composition accepted by the resolution of the creditors, “shall be binding on all the creditors, whose names and addresses and the amounts of the debts due to whom, are shown in the statement of the debtor, produced at the meeting, at which the resolution shall have been passed, but shall not affect or prejudice the rights of any other