WHITE
v.
EWING
AI-generated. These summaries, headnotes, and key points are machine-generated and may contain errors or omissions. Always verify against the full opinion text below. Not legal advice.
A federal circuit court appointed a receiver to wind up an insolvent corporation and authorized the receiver to bring suit against multiple debtors to recover amounts owed to the corporation, including claims under $2,000. The Supreme Court held that the circuit court had jurisdiction to render judgments in such suits regardless of the amount in controversy or the citizenship of the parties, because suits by a receiver are ancillary to the original equity proceeding in which the receiver was appointed and represent the court's inherent power to administer and collect assets of an insolvent estate under its control.
© FLexlaw, Inc. — AI-generated enrichments are proprietary. All rights reserved.
Mr. Justice Brown,
after stating the case, delivered the opinion of the court.
While the receiver prayed in his petition to bring in all the debtors by bill or petition in one suit, alleging that it was so requested by creditors, in order to avoid the expense of a separate suit against each; and the bill was brought in that form against 130 defendants, who were charged to be severally indebted upon notes given for lots of land purchased from .the company, no exception was taken to the form of the bill by demurrer or otherwise, but the defendants answered, denying their liability. The question certified does not, as we understand it, demand the opinion of this court as to whether a single bill against all these defendants would lie for the amounts severally due by them (upon which point we do not feel called upon to express an opinion); but whether so far as in said suit the receiver claimed the. right to recover from any one debtor a sum not exceeding $2000, the court had jurisdiction to render a judgment against them.
This question must .be answered in the aifinnative. As was observed by this court in Porter v. Sabin, 149 U. S. 473, 479: “ When a court exercising a jurisdiction in equity appoints a receiver to hold the property of a corporation that court assumes the administration of the estate; the possession of the receiver is the possession of the court; and the court itself holds and administers the estate, through the receiver as its officer, for the benefit of those whom the court shall ultimately adjudge to be entitled to it.”
The Circuit Court obtained jurisdiction over the Cardiff Coal and Iron Company by the filing of the original creditor’s bill by Bosworth, a citizen of Massachusetts, and by the appointment of a receiver, and any suit by or against such receiver, in the course of the winding up of such corporation, whether for the collection of its assets or for the defence of its property rights, must be regarded as ancillary to the main suit, andas cognizable in the Circuit Court, regardless either of the citizenship of the parties, or of the amount in'controversy. Freeman v. Howe, 24 How. 450, 460; Krippendorf v. Hyde, 110 U. S. 276; Dewey v. West Fairmont Gas Goal Co., 123 U. S. 329; In re Tyler, 149 U. S. 164, 181; Root v. Woolworth, 150 U. S. 401, 413; Rouse v. Letcher, 156 U. S. 47, 49.
Indeed, it was conceded that where an insolvent corporation is placed in the hands of a receiver of the Circuit Court, such appointment draws to the jurisdiction of that court the control of its assets, so far as persons having claims to participate in the distribution of such assets are concerned, and that parties must go into that court in order to assert their rights, prove their demands, and receive whatever may be due them, or their share or interest in the estate. But it is insisted that there is a distinction between cases where parties are brought before the court for the purpose of the payment to them of claims they may hold against the estate, and cases where it is sought to recover of them claims which the receiver insists they owe the estate; that the receiver stands in the shoes of the company, and has no higher rights than the corporation, and having sued for less than the jurisdictional amounts, that as to them the cases must be dismissed.
This position is entirely correct, so far as the right of the receiver to recover upon the merits is concerned ; but it has no bearing whatever upoh the question of the jurisdiction of .the court to pass upon such merits. The receiver does not take his authority as an ordinary endorsee, of the paper, and subject to the disability to sue in the Federal court, which attaches to such endorsee, but he takes title by operation of law, and as an instrument of the court which appointed him. The cases upon which the appellant relies of the New Orleans Pacific Railway v. Parker, 143 U. S. 42, and Walter v. Northeastern Railroad, 147 U. S. 370, were both original bills, over which jurisdiction could only be acquired upon proper allegations of citizenship and amount. In this case, however, the court proceeds upon its own authority to collect the assets of an estate, with the administration of which it is charged; and, if the receiver in such cases appears as a party to the suit, it is only because he represents the court in its inherent power to wind up the estate of an insolvent corporation, over which it has by an original bill obtained jurisdiction. In this particular, the jurisdiction of the Circuit Court does not materially differ from that of the District Court in bankruptcy, the right of which to collect the assets of a bankrupt estate we do not understand ever to have been doubted. There is just as much reason for questioning the jurisdiction of the.court in this case upon the ground of the want of diverse citizenship, as upon the ground that the requisite amount is not involved.
Two cases decided by Justices of this court are directly in point. Price. v. Abbott, 17 Fed. Rep. 506; Armstrong v. Trautman, 36 Fed. Rep. 275.
The question certified will, therefore, be answered in the ajfi/rmatvoe.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By (46 total)
-
Murtha v. Steijskal, 232 So. 2d 53 (Fla. 4th DCA 1970)…the courts, possession by the court of the res gives jurisdiction over the res to the court appointing the receiver and gives such court power to determine all questions concerning the ownership and disposition of the property. White v. Ewing, 1894, 159 U.S. 36, 15 S.Ct. 1018, 40 L.Ed. 67. No other court can interfere with the possession of the res. The general rule of law, therefore, naturally flows that a receiver as an officer of the court cannot in absence of an enabling statute be sued without leave…
-
Mitchell v. Maurer, 293 U.S. 237 (U.S. 1934)…on that of the main cause. Cincinnati, I. & W. R. Co. v. Indianapolis Union Ry. Co., 270 U. S. 107. The same rule is applicable to sustain jurisdiction of independent suits which are ancillary to an original suit in the same court. White v. Ewing, 159 U. S. 36. Whether the rule may ever be applied to a suit brought in a federal court of another district; and whether a suit for the appointment of ancillary receivers in another federal district is an ancillary suit within the meaning of the rule does not ap…
-
The Pusey & Jones Co. v. Hanssen, 261 U.S. 491 (U.S. 1923)…plication of a secured creditor who fears that his security will be wasted. Kountze v. Omaha Hotel Co., 107 U. S. 378, 395. A receiver is often appointed upon application of a judgment creditor who has exhausted his legal remedy. See White v. Ewing, 159 U. S. 36. But an unsecured (simple contract creditor has, in the absence of statute, no substantive right, legal or equitable, in or to the property of his debtor. This is true, whatever the nature of the property; and, although the debtor is a corporation a…
Previewing 3 of 46 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- In re Tyler, 149 U.S. 164 (U.S. 1893)
- Watson Freeman v. Jabez C. Howe, 24 How. 450 (U.S. 1860)
- Porter v. Sabin, 149 U.S. 473 (U.S. 1893)
- Root v. Woolworth, 150 U.S. 401 (U.S. 1893)
- Krippendorf v. Hyde & Another, 110 U.S. 276 (U.S. 1884)
- Walter v. Ne. R.R. Co., 147 U.S. 370 (U.S. 1893)
- Rouse v. Letcher, 156 U.S. 47 (U.S. 1895)
- New Orleans Pac. Ry. Co. v. Parker, 143 U.S. 42 (U.S. 1892)
- Dewey v. W. Fairmont Gas Coal Co., 123 U.S. 329 (U.S. 1887)