Neely v. McGehee, 2 F.2d 853 (5th Cir. 1924)

J. Morgan Stevens, of Jackson, Miss. (J. Morgan Stevens, of Jackson, Miss., Holmes & Canale, of Memphis, Tenn., and Wells, Stevens & Jones, of Jackson, Miss., on the brief), for petitioner and appellant.

Luther A. Whittington, of Natchez, Miss., for respondents and appellees.

Before WALKER and BRYAN, Circuit Judges, and CLAYTON, District Judge.

WALKER, Circuit Judge.

By appeal and by petition to superintend and revise the trustee in bankruptcy of a Tennessee corporation, which was adjudged bankrupt under a petition filed on December 15, 1923, complains of an order dismissing a petition, which prayed for a summary order requiring a receiver appointed on May 21, 1923, in a suit brought against such corporation in the chancery court of Franklin county, Miss., to turn over and deliver to such trustee in bankruptcy property in Mississippi, *854 which went into the possession of such receiver upon his appointment and was in his possession as receiver when the dismissed petition was filed. The bill in the suit in which the receiver was appointed showed that the complainant therein was a creditor of said corporation, and it prayed that a receiver of assets in Mississippi of the nonresident debtor be appointed to hold and conserve those assets until the rights of the creditors have been fully determined and adjudicated, and in the end distribute the same as the court may direct.

Whether the action of the Mississippi court in appointing the receiver and in having assets of the debtor held for disposition under its orders was or was not erroneous, that action was not void. Independently of statute, by virtue of its general equity powers, that court may, without a judgment at law and nulla bona return, subject to the demands of creditors the effects in Mississippi of a nonresident debtor. Dollman v. Moore, 70 Miss. 267, 12 So. 23, 19 L. R. A. 222. Jurisdiction of the state court having attached, its action in having the debtor's property seized and held by its receiver, when questioned collaterally, unless impeached for fraud, must be regarded as regular in all things and irreversible for error; it being of no avail that the court's action was erroneous, where what it did in taking possession and control of property was within the scope of its power or jurisdiction. Manson v. Duncanson, 166 U.S. 533, 17 S. Ct. 647, 41 L. Ed. 1105; Cornett v. Williams, 20 Wall. 226, 22 L. Ed. 254.

The state court's jurisdiction over the property held under its orders by its receiver was not affected by the bankruptcy adjudication under a petition filed more than four months after that court, through its receiver, acquired possession of the property in question. The bankruptcy court was without right to draw to itself the possession and administration of property of the bankrupt of which the state court acquired possession and control as above stated more than four months prior to the filing of the bankruptcy petition. Blair v. Brailey, 221 F. 1, 136 C. C. A. 524; Empire Trust Co. v. Brooks, 232 F. 641, 146 C. C. A. 567. It follows that the court did not err in making the ruling complained of.

We think that that ruling is properly presented for review by the petition to superintend and revise. The appeal is dismissed. The petition to superintend and revise is denied.