The jurisdiction of the State courts over the subject-matter of an action, where it is based upon a contract or is for the recovery of property, real or personal, does not depend upon the means by which plaintiff's title was acquired; and a right to property, given by act of congress, may be protected in a State court in the same way and to the same extent as though derived from any other source.*fn1
The Supreme Court of this State has jurisdiction in all actions, legal or equitable, brought by an assignee in bankruptcy to recover the estate of the bankrupt, or to determine rights to property claimed by him as such assignee, or in any way affecting the same.*fn2
The provisions of the bankrupt act (§§ 1, 2), conferring jurisdiction in such cases upon the District and Circuit Courts of the United States, were not intended to interfere with and do not exclude the jurisdiction of the State courts.
The right of recovery of property transferred by the insolvent given to the assignee by section 35 of the bankrupt act, is, in no sense, a penalty imposed upon the party receiving it; and the rule that State courts have no jurisdiction of actions for penalties given by acts of congress, has no application to actions to enforce such right.
Where a State court has jurisdiction it is not in its discretion whether to exercise it or not, but it is its duty to do so when called upon in the manner prescribed by law.
Brigham v. Claflin (31 Wis., 607) and Voorhees v. Frisbee (Sup. Ct. St. [[[Mich.], ) disapproved.
The bankrupt act does not confer upon an assignee the rights of a judgment creditor, and he takes the real estate of the bankrupt subject to an incumbrance, which is valid as to all except judgment creditors.
A defective verification to a statement for a judgment by confession is amendable; and such an amendment may be properly allowed, where asked for in the answer, in an action against the judgment creditor to recover property, the title to which defendant claims by purchase upon a sale under an execution upon such a judgment.
A judgment by confession, under the Code (§ 382), may be taken to secure future advances of notes and other commercial paper, agreed to be made by the plaintiff for the defendant, and which the former is to provide for at maturity.
APPEAL from judgment of the General Term of the Supreme Court in the third judicial department, affirming a judgment in favor of defendants entered upon the report of a referee.
This was an action brought by plaintiff as the assignee of William Cressy, a bankrupt, among other things, to recover certain sums of money alleged to be in the hands of defendants and received from the bankrupt, or derived from his property, and to which plaintiff, as such assignee, had become entitled; to recover the value of a large amount of lumber, logs, merchandise and other personal property which formerly belonged to the bankrupt, and which, as alleged, defendants had taken and sold; and also to set aside two judgments, by confession, and the executions issued thereon, and to set aside all sales of property, real and personal, made upon said executions.
The referee found the following facts among others:
William Cressy, on the 11th day of October, 1867, filed his petition to be declared a bankrupt, and was afterwards, by said court, duly declared a bankrupt. On the 14th day of November, 1867, the plaintiff was duly appointed the assignee, and an assignment of the property and effects of the bankrupt to such assignee was executed on the 17th day of December, 1867.
The said Cressy, on the 12th day of December, 1865, by a statement in writing, signed by him and verified by his oath, authorized a judgment to be entered up against him, in favor of the defendants, for the sum of $25,088.68, upon and for the considerations following: $10,092.65 for moneys actually due and owing by Cressy to the defendants; $7,796.03 for contingent liabilities before then assumed by the defendants on behalf of Cressy, and then outstanding; $7,200 for contingent liabilities agreed to be assumed by the said defendants in behalf of the said Cressy; and on such statement and verification judgment was perfected for said amount. The said judgment was confessed in good faith. The said Cressy was then indebted to the said defendants, and the said defendants had assumed and were under liabilities, and had agreed to assume liabilities in behalf of said Cressy as therein stated; and the said defendants did, thereafter, in pursuance of the said agreement, ...