In re Mallory. its employment if not found in the statute in direct or necessarily implied terms, these considerations may be, and ought to be looked at in construing the law and arriving at the intention of the law-makers. Let us suppose that two persons, each have or claim to have a lien by judgment in the state courts, upon the property of the bankrupt at the time of bankruptcy, and that there is a dispute between them as to the priority of their liens or the validity of one of the judgments. One creditor comes into the bankruptcy court, proves his claim and asks to have his lien liquidated. The other proceeds in the state court. If neither court can restrain or control parties before the other, here will be a direct conflict of jurisdiction. Decisions as to priorities or validity of the liens may be conflicting, and each court proceeding to take possession of the property through its process and officers, and satisfy the lien of the party before it. Such a state of things would be very much to be deprecated if the bankrupt law was so lame and impotent as to have left the case unprovided for. But the law is not, I conceive, so defective. It gives the bankruptcy court an original and exclusive jurisdiction over all the parties to the bankruptcy proceedings, all the assets and all the liens thereon. Again, a lien may be good by the law of the state and void under the bankrupt law; thus a lien by attachment is avoided, and the state law creating it is so far abrogated if the attachment was made within four months next preceding the commencement of proceedings in bankruptcy; so a judgment lien may be void under the bankrupt law as an unlawful preference to the judgment creditor. Hence, while the judgment might stand in a state court, the lien of that judgment might be avoided in the bankruptcy court; and so it was held under the law of eighteen hundred and forty-one, and that the creditor was liable to refund to the assignee the proceeds of a sale made under the judgment, such creditor having notice of the proceedings in bankruptcy. Shawhar v. Wherritt, 7 How. 626. Let us see now how this question stands upon authority. In re Mallory. Where judgment had been obtained in a state court, execution issued and returned unsatisfied, and an order made on proceedings supplementary to execution for the examination of the judgment debtor, Judge Blatchford ordered a stay of all proceedings on the said order until the question of the discharge of the bankrupt should be determined by the bankruptcy court. In re Reed, N. B. R. Sup. i. In an inventory proceeding before the same Judge, he, under the fortieth section of the bankrupt act, enjoined the sheriff of a state court from proceeding to sell property of the alleged bankrupt, and on motion refused to dissolve it until the question whether or not the debtor was to be adjudged a bankrupt was decided. In re Devlin & Hagan, N. B. R. Sup. viii. The fortieth section of the act gives the district court power by injunction to "restrain the debtor and any other person" from making any transfer or disposition of any part of the debtor's property until the return of the order to show cause why the debtor should not be adjudged a bankrupt. On the hearing it was argued that the express grant of power to enjoin in proceedings in invitum was a denial of any such power in voluntary proceedings upon the maxim, expressio unius exclusio alterius. But it is to be observed that under section fourteen it is "in virtue of the adjudication of bankruptcy and the appointment of an assignee" that the propperty vests in the assignee. Now, in voluntary cases, the filing of the petition is an act of bankruptcy and the debtor at the same time surrenders all his estate and effects for the benefit of his creditors, and is forthwith adjudged a bankrupt. The district court is thus clothed at once in voluntary cases with jurisdiction over the debtor and his property. But where the proceeding is involuntary the debtor is not adjudged a bankrupt until the return and hearing of the order to show cause, and may not be then if he have a sufficient defence. There is, therefore, good reason for giving the court power to enjoin between the time of filing the creditor's pe In re Mallory tition and the return of the order to show cause, as there is in these cases no voluntary surrender of the property and the title cannot vest in the assignee until after adjudication. If the argument of the petitioner is sound, the court would have power to enjoin in involuntary cases before adjudication, but must dissolve it immediately after, because the statute in express terms only provides for an injunction until the return of the order to show cause. So that the court might enjoin before it was certain the property of the bankrupt would ever come into its possession, and might not after the property was fully within its jurisdiction. A bankrupt held under arrest by the sheriff of the city and county of New York, under order of arrest from the state court was discharged from arrest and proceedings on actions against the bankrupt in the supreme court of the state were stayed. In re Jacoby, N. B. R. Sup. viii. In a case before Judge Benedict, E. D. New York, where judgment was obtained, execution issued and levied on property of the bankrupt prior to the commencement of proceedings in bankruptcy, that judge enjoined the creditors from enforcing the levy. On motion to dissolve, which was denied, although this question of power was not discussed, the judge said that the power seemed to be fairly included in the power to collect all the assets, to ascertain and liquidate liens and to adjust priorities. In re Schnepf, N. B. R. Sup. xii. In a voluntary proceeding upon a bill filed to enjoin a sheriff from selling property of the bankrupt under an execution from a state court, Judge Hill, of the Miss. district, held that the bankrupt himself had a right to file the bill before an assignee was appointed; that if the sheriff had actually levied before the bankruptcy, he would be allowed to proceed without a showing that the sale would be injurious to the general creditors or to some one having a prior lien; that the twentieth section, in connection with the first and twentyfifth, gave the court jurisdiction of the subject matter, that the commencement of proceedings in bankruptcy transferred to the district court, jurisdiction over the bankrupt, his estate, In re Mallory. and all parties and persons connected therewith, and operated as a supersedeas of the proces in the hands of the sheriff and an injunction against all other proceedings than such as might thereupon be had by authority of the bankruptcy court. Jones v. Leach, 1 N. B. R. 165. A sheriff was restrained from selling goods under execution by the same judge, in Pennington v. Sale, 1 N. B. R. 157. After judgment in a state court, execution, levy and advertisement for sale, the sheriff was restrained. In re Bernstein, N. B. R. Sup. xliii. The jurisdiction of a district court of the United States is superior and exclusive in all matters arising under the statute, and extends to a suspension of proceedings taken for the purpose of subjecting portions of the estate surrendered to a sale under state process. Until a sale is made, the bankrupt is not divested of his interest in the property under seizure. In re Barron, 1 N. B. R. 125. A preliminary injunction was issued restraining the plaintiff in an execution upon a judgment confessed in a state court, and he moved to dissolve it. The question was argued before two judges, Grier and Cadwalader, and the jurisdiction maintained, the court refusing to dissolve the injunction. Irving v. Hughes, 2 N. B. R. 20. Where judgments were rendered after the bankruptcy, Judge Deady held the jurisdiction to restrain the enforcemen of the judgments was undoubted. In re Wallace, 2 N. B. R. 54. Parties proceeding, after the bankruptcy, to foreclose a mortgage on the property of the bankrupt in the state court, were enjoined. In re Kerosene Oil Co., 2 N. B. R. 164. A landlord was enjoined from distraining the bankrupt's property for rent, Brock v. Tirrell, 2 N. B. R. 190. In a case where the bankrupt himself filed a petition to restrain certain persons, who had obtained judgments against him prior to the filing of his petition, from proceeding by execution, Judge Giles, of the Maryland district, in answer to an objection that the district court had no jurisdiction, but that the proceeding must be by bill and in the circuit court, said: "I am clearly of the opinion that the petition was In re Mallory. properly filed in this court, and that this court has, by virtue of the first section of the bankruptcy act, full and adequate jurisdiction over all matters relating to the settlement of the bankrupt's estate, either at law or in equity, by way of petition or bill; and that whenever the relief sought is necessary to the protection of the general creditors, such relief will be granted." But as in the case before him there was no suggestion of fraud, and the judgments were admitted to be valid liens, he held that the jurisdiction of the bankruptcy courts was not exclusive, and permitted the judgment creditors to proceed in the state court. In re Bowie, 1 N. B. R. 185. Upon the application of parties interested, the district court has jurisdicton to ascertain and liquidate a judgment lien, and while so doing to enjoin the judgment creditor from enforcing the same by execution out of the state court. In re Fuller, 4 N. B. R. 29. If creditors who assert a claim against the bankrupt are not barred by the discharge and are allowed to commence suit in the state court for the purpose of saving the statute of limitations or securing testimony, the suit, after this object is attained, can be stayed to await the decision of the question of the debtor's discharge. In re Ghirardelli, 4 N. B. R. 42. After the bankruptcy, creditors of the bankrupt having a lien by mortgage were proceeding to foreclose in a territorial court. The supreme court held that all the property, choses in action, effects, interests and equities of the bankrupt must be brought into the bankrupt court for settlement and distribution, and enjoined the creditors from proceeding in the foreclosure suit. In re Snedaker, 3 N. B, R. 155. Judgment was obtained in a state court, execution levied and property advertised for sale before the filing of the petition in bankruptcy. The sheriff was restrained from proceeding with the sale. Beattie v. Gardner, 4 N. B. R. 107. Under the law of eighteen hundred and forty-one an injunction was ordered against the assignee appointed under the state laws to stop his interference with the property of the bankrupt, and also to prevent certain creditors from proceeding with an execution. Ex parte Eames, 2 Story, 322. |