Benjamin N. Cardozo

“ If assignments of the shares have been made by the bankrupt to his wife for his own use or for hers or for the use of children and other relatives, the invalidity of such assignments may not be open to decision unless the assignees of the shares are brought before the court. Choses in action and other equitable assets, even though fraudulently transferred, are not subject at cammon law to seizure under execution at the instance of a creditor, but the transfer must be avoided by a decree in equity. ”

“ A plenary suit may be brought with the trustee in control to ascertain the legal and the equitable interests in All Continent's assets and also in its shares of stock. All persons whose interests will be affected by an appropriate decree, and particularly the members of the bankrupt's family, adverse claimants to the shares, may be joined as defendants, as indeed they have been joined already in the New Jersey Court of Chancery. ”

“ A decree is prayed enjoining the corporation from disposing of its assets, appointing a receiver to manage and preserve them during the pendency of the suit, annulling all the transfers tainted by the fraud, and decreeing a trust for the benefit of the bankrupt and through him for the trustee. Upon the filing of the bill the chancellor made an order to show cause why a receiver should not be appointed, and he enjoined in the interim any transfer of the assets. ”

“ The danger of frustration by such means will be much greater in a suit by All Continent than in one by the trustee, an officer of the court. In the end a fraudulent grantee may gain possession of the securities with power to distribute them among the members of the bankrupt's family, and to do this, moreover, under cover of a decision which will breed confusion and uncertainty in other suits to follow. ”

“ To avoid loss or hardship either to stockbrokers or to others by tying up accounts without opportunity for release a receiver may be appointed with power to manage such accounts and preserve the assets generally. All these forms of relief and others ancillary thereto will be well within the powers of a court of equity if a suit is maintained in the name of the trustee with the corporation, the bankrupt and his family parties to the record. ”

“ The need for a decree is no less obvious and settled when title is to be reclaimed at the suit of a trustee. There are times, it is true, when a trustee may have the benefit of a summary order for transfer or surrender, but this will never happen as to property out of his possession unless the adverse claim of title is colorable only. ”

“ Jurisdiction to administer the estate draws to itself, when once it has attached, an incidental or ancillary jurisdiction to give protection to the estate against waste or disintegration while frauds upon its integrity are in process of discovery. ”

“ If suits can be enjoined when they are found to have a tendency to embarrass administration, a fortiori this may be done when there is a basis for the fear that they will be used as instruments or devices to render fraud triumphant. ”

“ To avoid the fraudulent or improvident exercise of dominion by the holder of the legal title, an injunction may be granted restraining the transfer of the assets until the issues have been determined. ”

“ Delay and expedition will be subject to the control of equity. 'In that predicament the malleable processes of courts of bankruptcy give assurance of a remedy that can be moulded and adapted to the needs of the occasion.' Brown v. O'Keefe (March 29, 1937) 300 U.S. 598, 57 S.Ct. 543, 547, 81 L.Ed. 827.
Much of the argument for the respondent has been directed to a showing that the suit in Pennsylvania is not subject to restraint for defect of jurisdiction, and this for the reason that the res to be affected-the securities held by Sparks & Co. ”

“ Cole v. Cunningham, supra; Madisonville Traction Co. v. Mining Co., 196 U.S. 239, 245, 25 S.Ct. 251, 49 L.Ed. 462; Kessler v. Eldred, 206 U.S. 285, 27 S.Ct. 611, 51 L.Ed. 1065; Rickey Land & Cattle Co. v. ”