Rockville National Bank v. Latham , 88 Conn. 70 ( 1914 )

"The Constitution of the United States gives Congress power to establish uniform laws on the subject of bankruptcies throughout the United States. At the date of the assignment to the plaintiff such laws had been established. They covered, so far as respects the rights of the parties to the case at bar, the same field previously occupied by the insolvent laws of this State, and consequently they superseded them." This statement, taken from the opinion inKetcham v. McNamara, 72 Conn. 709, 711, 46 A. 146, by the substitution of the words "appellee Latham" for "plaintiff," sums up the situation in the present case, and is decisive of the Court of Probate's lack of power to make the order appealed from.

Starting with the premise, distinctly established by the case cited, that our statutes regarding the settlement of the estates of insolvent debtors comprise in the fullest sense an insolvent law, there is no escape from the conclusion that the Court of Probate was without authority to entertain jurisdiction in the matter of this voluntary assignment in insolvency.

The Federal Bankruptcy Act made provision for the insolvent's case, and prescribed a method to be pursued by him in securing, upon his initiative, an equitable distribution of his assets among his creditors. True he, as one engaged chiefly in farming and the tillage of the soil, could not be forced into bankruptcy; but the door of bankruptcy was open to him. The Federal statute made provision for him and his case. Our statutes also did in terms. He chose to invoke in the State courts the aid of the latter. He was not privileged to so proceed at his election. In so far as voluntary proceedings were concerned, both Federal and State legislation covered the same field. By force of the existence of the former legislation the latter was held in abeyance and superseded in respect to persons and conditions coming within the purview of the former, and the former became exclusive. Sturges v.Crowninshield, 17 U.S. (4 Wheat.) 122, 196; Ogden v.Saunders, 25 U.S. (12 Wheat.) 213, 278. Any doubt which might otherwise exist upon the subject is removed by the necessary implication arising from the provision contained in § 70 of the Federal Act, that proceedings commenced under State insolvency laws before its passage should not be affected by it. Whenever the Federal door is open the State door is automatically shut. Ketcham v. McNamara, 72 Conn. 709, 711, 46 A. 146. The latter door was shut to this insolvent, and as a consequence the Court of Probate was without authority to entertain jurisdiction of the assignment made by Talcott, and any order made by it in the premises was void.

The conclusions reached in Ketcham v. McNamara,supra, which we have adopted and applied, are not novel ones. They are supported by the great weight of authority and reason. Harbaugh v. Costello, 184 Ill. 110,114, 56 N.E. 363; Parmenter Mfg. Co. v. Hamilton,172 Mass. 178, 51 N.E. 529; Littlefield v. Gay, 96 Me. 422,424, 52 A. 925; Wescott Co. v. Berry,69 N. H. 505, 506, 45 A. 352; Old Town Bank v. McCormick,96 Md. 341, 351, 53 A. 934. Cases dealing, on the one hand, with bankruptcy legislation prior to that of 1898, or, on the other, with common-law assignments, or such assignments supplemented by State legislation, construed as being merely regulative of procedure under them and not amounting to insolvency laws, are not pertinent to conditions coming within the purview of both the present Federal Act and the insolvency laws of a State. Mayer v. Hellman, 91 U.S. 496, 502; Ketcham v. McNamara, 72 Conn. 709, 713, 46 A. 146.

There is no error.

In this opinion the other judges concurred.