Joseph Story

“ If either the obligation or the remedy is impaired, it matters not by whom it is done; no state has any power to do it; Congress can only do it by a 'uniform law on the subject of bankruptcy,' nor when the law is silent can the court do it without the usurpation of legislative power. ”

“ To maintain the opposite doctrine, is to assert that a concurrent jurisdiction may be different, and greater in the one court than the other, and that the formal and summary jurisdictions of a court may be adopted and intermingled at its pleasure. It is indisputable, and conviction results from a mere inspection of the proceedings, that William Christy, the assignee, is proceeding in the District Court, sitting in bankruptcy, and according to the course of its summary jurisdiction as a bankrupt court. ”

“ It is a matter of sound discretion, and to be exercised by Congress in such a manner as shall in their judgment best promote the public convenience and the true interests of the citizens. Because the proceedings are to be in the nature of summary proceedings in equity, it by no means follows, that they are not entirely consistent with the priniciples of justice and adapted to promote the interest as well as the convenience of all suitors. Because there is no appeal given, it by no means follows, that the jurisdiction is either oppressive or dangerous. ”

“ If, therefore, an order of court is made that would, in its execution by an assignee, impair a lien protected by the proviso in the 2d section, it is an excess of authority, and therefore void; a fortiori the divesting of a lien in the case put in this question is a much higher act of power than merely impairing it by affecting the remedy. The property bound by the lien is taken from the creditor, his whole right is extinguished, and his debt is lost entirely, unless he comes in for his dividend of the assets of the bankrupt's estate. ”

“ The settled course of jurisprudence in the state is to be overlooked only when such is the intention of the law; no intention to do so is to be presumed, no policy is to be assumed as the basis of the law, other than what its words indicate, and nothing is to be borrowed from any other system which is not consistent with that which Congress has thought proper to create. ”

“ If our distinction between the summary bankrupt jurisdiction and the formal chancery jurisdiction of the District Court be well taken, it follows, that when the district judge, sitting in the summary court of bankruptcy, usurps the authority of the formal chancery court, and subjects to the power persons and things belonging to the cognisance of the latter, he commits an excess of jurisdiction. ”

“ To the property which was mortgaged, the only right of the assignee was to redeem it; if it was bound by judgment or other lien, the bankrupt held it subject to its payment; he could sell the equity of redemption on the land itself, subject to the lien, but the purchaser could not hold without paying it. The assignee can have no other rights by force of the decree, which is a conveyance by operation of law, than he could acquire by the deed to the bankrupt ”

“ But, in the present instance, the public policy of confiding the whole jurisdiction to the District Court without appeal in ordinary cases requires no elaborate argument for its vindication. The district judges are presumed to be entirely competent to all the duties imposed upon them by the Bankrupt Act. In cases of doubt or difficulty, the judges have full authority given to them to adjourn any questions into the Circuit Court for a final decision. ”

“ If the foregoing views are sound, they dispose of the two questions; an order of the court in bankruptcy can confer on the assignee no power which Congress has not conferred on the court; its powers are what the law has delegated, and none other; the law may and must be construed where it is open to construction, but where the law itself forbids construction it must be taken and followed as it reads. ”

“ Assuming this to be true, (on which we give no opinion; and the clause certainly does include persons claiming by titles paramount and not under the bankrupt,) still it must be brought by or against such 8th section, a bill in equity may be brought by or against such creditor in the Circuit Court to redeem or foreclose, or to enforce, or to set aside such a lien, mortgage, or other security. If it can be, then the lien, mortgage or other security, is not saved from the cognisance of the Circuit Court having jurisdiction in bankruptcy, but the most ample remedies lie there ”

“ If the associate justice presiding in the Circuit Court of that district, sustains the District Court in that excess, and says, as he is supposed to have done, that it is proceeding regularly and lawfully, when in truth its proceedings are irregular and unlawful, then either this court must have power to issue a prohibition, or its authority to revise the proceedings of inferior tribunals, to confine them within the limits of their jurisdiction, and to protect their own, is so far completely nullified. ”

“ It recited that Walden, the bankrupt, was, at the time of filing his schedule and surrender, the owner of a large amount of real estate; that the bank claimed to have a mortgage upon it; that the bank caused it to be sold and possession delivered; that the sale was void, because the application of Walden operates as a stay of proceeding; that the property was offered for sale in block, though composed of twenty different stores or buildings, and for cash; that the mortgage debt was not justly due, but void on account of usury ”

“ Besides, independently of the delays which must necessarily be incident to a resort to state tribunals to adjust the matters and rights affected by or arising in bankruptcy, considering the vast number of cases pending in those courts, in the due administration of their own jurisprudence and laws, there could hardly fail to be a conflict in the decisions, as to the priority and extent of the various claims of the creditors, pursuing their remedies therein in distinct and independent suits, and perhaps, also, in different state tribunals of co-ordinate jurisdiction. ”

“ The general power to issue all other writs necessary to the exercise of their jurisdiction, is broad enough to cover prohibitions, when used as an appellate or revisory process.
(Mr. Wilde then went on to review and criticise the cases of Marbury v. Madison, Weston v. City Council of Charleston, 2 Pet., 464; Cohens v. Virginia, 6 Wheat., 397; and contended that the authority to issue a writ of prohibition rested upon the same ground as writs of mandamus and procedendo, viz., the necessity of protecting the appellate jurisdiction of the Supreme Court.) ”

“ Such a course is very familiar in courts of chancery, in cases where a creditors' bill is filed for the administration of the estate of a deceased person, and it becomes necessary or proper to take the whole assets into the hands of the courts for the purpose of collecting and marshalling the assets, ascertaining and adjusting conflicting priorities and claims, and accomplishing a due and equitable distribution among all the parties in interest in the estate. ”

“ Under this levy or seizure the mortgagee proceeded to sell the mortgaged premises, after appraisment, advertisement, and all other legal pre-requisites, in several distinct lots, according to their separate enumeration in the mortgages and appraisement, and in as minute divisions as the nature of the property would admit or the law allow. ”

“ Similar considerations would apply to other liens and securities, held by different parties in the same property, or furnishing grounds of conflict and controversy as to their respective rights and claims. ”