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is empowered by the legislature to fix and determine the taxing district. This it did by adopting the resolution of intention to make the improvement. Its action in this regard is legislative in character, and it was not requisite that the legislature should have provided for notice before the council was authorized to act. In prescribing the district it must be presumed, as would have been the case if the legislature had itself acted directly, that it took into consideration the exceptional benefits that would accrue to the property which it was intended should be charged with the burden, because it could inaugurate or make such an assessment upon no other basis. A notice in the present instance was required by the charter, and given, however, and, while it was for the purpose of acquiring jurisdiction, it gave the property holders an opportunity to appear and file objections to the improvement; and it was perfectly competent for them to raise both the objection that as a district the costs would be in excess of the exceptional benefits to the property involved, and that as it respects individual holders and between themselves the assessment would not be proportional to the relative benefits to be derived from the improvement. This is what in fact, was done by the plaintiffs, as shown by the record, and upon this issue they were accorded a hearing. It was also possible for the common council to determine the matter with reasonable accuracy, as the probable cost and distributive share thereof among the holders was known to them, as was also the locality and situation of the property to be assessed.” The charter therefore gives a hearing on the question of benefits to the property owner before the formation of the district to be improved. And the trial court found that the common council before making the improvement estimated the probable cost there: of, and that it “considered the question of cost of said improvement in front of each of the lots within the limits of the proposed street improvement and abutting upon said street, and also the proportionate share of the cost of improving intersections of two of the streets bounding the blocks in which § such lot is situated, and found that each F of said lots” abutting on said street, and each of said lots assessed for intersection of blocks, would be benefited by said improvements in an amount greater than the cost of said improvement as assessed against each of said lots.” And especially as to the property of plaintiffs in error it was found that the council took into consideration whether that property was benefited by the improvements and the amount of the benefits, and that the cost assessed against the property did not exceed, or equal, the benefits which would accrue. Every requirement of due process of law, therefore, was satisfied as to plaintiffs in error. What notice the charter of the city gives to property owners of the specific amount of the assessment against their property, and what opportunity to be heard thereon
was afforded, the supreme court observed as follows: “There are four several notices required along the way: First, of the proposed improvement; second, inviting proposals for doing the work; third, touching the acceptance of the work; fourth, ten days' notice of the entry of the assessment in the docket of city liens. Ample opportunity was thus afforded the owners to appear and interpose the constitutional objections, which is all that, is sought to be done in this proceeding.” That is, as we understand, to object not only to the rule of assessment, but to the amount of the assessment, for the court further said: “The improvement consists of an elevated roadway ranging from 10 to 15 feet in height throughout, except at one intersection, which was a fill, and it is apparent that the cost of the work was practically uniform throughout, and the assessment against the lots was therefore as nearly proportional according to benefits as could be devised. At least, it is not apparent that there is any substantial excess of costs above benefits, nor is there such a disproportionate distribution of the burden as to justify the court in declaring the assessment an arbitrary exaction by the legislature. It is beyond the power of human ingenuity to adopt any plan or mode of assessment that will operate to produce exact uniformity, and all that may be expected is a reasonable approximation to such a standard, and ther rule adopted under the charter fulfils that? condition as" applied to the present controversy. There is no doubt that the property was benefited in excess of the costs and expenses.” But it is denied that the rule of the Portland charter constitutes an apportionment of the taxes, and it is said, quoting Cooley on Taxation, p. 453: “If such a regulation constitutes the apportionment of a tax, it must be supported when properly ordered by or under the authority of the legislature. But it has been denied, on what seem the most conclusive grounds, that this is permissible. It is not legitimate taxation, because it is lacking in one of its indispensable elements. It considers each lot by itself, compelling each to bear the burden of the improvement in front of it, without reference to any contribution to be made to the improvement by any other property; and it is consequently without any apportionment. From accidental circumstances, the major part of the cost of an important public work may be expended in front of a single lot, those circumstances not at all contributing to make the improvement more valuable to the lot thus specially burdened, perhaps even having the opposite consequence. But whatever might be the result in particular cases, the fatal vice in the system is that it provides for no taxing districts whatever.” But if “accidental circumstances” may take from the rule the effect of apportionment, they do not prevent the application
of the rule to cases where such circumstances do not exist. Where they exist they can be properly dealt with. Presumably the rule of the Portland charter was prescribed by the legislature in view of the conditions which existed in that city and in the expectation that the common council would so exercise its power and judgment in the creation of districts that the cost of the improvement ordered would be apportioned by the application of the rule prescribed. The expectation has been justified by the experience of the city. Under the rule of the charter the opening and grading of the streets have been done for years, and the courts have been watchful against 3abuses, watchful to protect the rights of * property owners. In Oregon & C. R. Co. v. Portland, 25 Or. 220, 22 L. R. A. 713, 35 Pac. 452, the collection of an assessment was enjoined because it was imposed on property which was not benefited by the improvement ordered. And in its opinion in the case at bar the supreme court said: “Put we are inclined to believe that the better doctrine, deducible from adjudged cases, including those of the Supreme Court of the United tes, is that the assessment will be upheld wherever it is not patent and obvious from the nature and location of the property involved, the district prescribed, the condition and character of the improvement, the cost and relative value of the property to the assessment, that the plan or method adopted has resulted in imposing a burden in substantial excess of the benefits, or disproportionate within the district as between owners.” From which we infer that the plan or method of assessment must have that result of itself. If that result is produced by a particular application of the plan or method, the latter will not be enforced, as was the case in Oregon & C. R. Co. v. Portland, 25 Or. 229, 22 L. R. A. 713, 35 Pac. 452. Upon the claim of plaintiffs in error that they did not have “notice or knowledge of the amount of assessments before the assessments were made, or before the same were entered into the docket of city liens, or before said work was completed,” we need not deal at length. The taxing district being formed upon a consideration of the utility of the work proposed, and the benefits to property owners, and the cost of the work and its apportionment, the amount of the assessment then followed as a certain deduction, and the property owner having notice of all the proceedings and the right to contest them, it would seem useless to give him a further right to contest the assessment. But if notice and an opportunity to contest the assessment be necessary, the supreme
- court has interpreted the statute as given . such notice and opportunity. The court paid:
“The manner of notice and the specific period of time in the proceedings when he may be heard are not very material, so that reasonable opportunity is afforded before he has been deprived of his property or the lien thereon is irrevocably fixed. So it has been
held that it is sufficient if the party is accorded the right of appeal or to be heard upon an application for abatement (see Towns v. Klamath County, 33 Or. 225, 53 Pac. 604;5: Weedov. Boston, 172 Mass. 28, 42 L. R. A." 642, 51 N. E. 204), or the assessment is to be enforced by a suit to which he is to be made a party (Hagar v. Reclamation Dist. No. 108, 111 U. S. 701, 28 L. ed. 569, 4 Sup. Ct. Rep. 663; Walston v. Nevin, 128 U. S. 578, 32 L. ed. 544, 9 Sup. Ct. Rep. 192), or the right of injunction against collection is accorded, by which the validity of the assessment may be judicially determined. McMillen v. Anderson, 95 U. S. 37, 24 L. ed. 335. In such case he cannot be heard to complain that his property is being taken without due process of law. The case of Paulsen v. Portland, 149 U. S. 30, 37 L. ed. 637, 13 Sup. Ct. Rep. 750, covers the question of the right to notice and a hearin quite fully, and it is significant that specia reference is made to the ten days’ notice required to be given under § 104 of the charter as it then stood, after the assessment had gone upon the docket of city liens and before collection can be proceeded with, which is almost the exact provision now contained in § 141. While the court at the time declined to decide that such a notice was sufficient, yet, if the cause had been dependent upon it alone, it is not altogether clear that it would have held it insufficient. So it was held by this court, in conformity with the prevailing rule, that if provision is made for notice to and hearing of each proprietor at some stage of the proceeding upon the question of what proportion of the tax shall be assessed upon his land, there is not a taking without due process of law. Wilson v. Salem, 24 Or. 504, 34 Pac. 0, 691.”
We are of the opinion, therefore, that, under the facts of this case and the interpretation given of the charter of Portland by the supreme court of the state, plaintiffs in error have not been deprived of their property without due process of law, and the judgment of the Supreme Court is af. firmed.
(184 U. S. 18)
LOUISVILLE TRUST COMPANY, Trustee, etc., Petitioner, 17
Bankruptcy — jurisdiction of bankruptcy court to determine adverse claim—effect of joining general assignce in petition— consent to adjudication of adverse claim —summary proceedings.
1. A court of bankruptcy has no jurisdiction to adjudicate the merits of the claim of a general assignee of the bankrupt to retain out of the bankrupt's estate money disbursed by him or claimed on account of his commission as such assignee before the bankruptcy proceedings were begun, unless such assignee consents to the exercise of such jurisdiction. 2. Because a general assignee was joined with his assignors in a petition in bankruptcy against the latter, which set up no cause of
action and prayed no special relief against such assignee, he does not therefore continue to be subject to the orders of the court without other process.
8. An assignee of a bankrupt cannot be deemed to have consented to the jurisdiction of the bankruptcy court to compel him by summary proceedings to pay over to the trustee in bankruptcy money of the bankrupt's estate which he had disbursed or which he had retained on account of his commissions, as such assignee before the bankruptcy proceedIngs were commenced, because he participated in the proceedings before the referee, where he pleaded such claims at the outset, and made formal protest to the exercise of such jurisdiction before the final order was entered.
: . Statement by Mr. Chief Justice Fuller: * December 5, 1898, Simonson, Whiteson, & Company, the firm consisting of three partners, made an assignment to Leonard Comingor for the benefit of their creditors, under the statutes of Kentucky in that behalf, and a few days thereafter Comingor brought suit involving the administration and settlement of the estate in the circuit court of Jefferson county. The state statute provided, among other things, that the assignee should give bond with good security to be approved by the county judge, conditioned for the faithful discharge of his duties as assignee, and to be recorded in the county clerk's office; that the assignee should be at all times subject to the orders and supervision of the county court, or the judge thereof in vacation, except as thereinafter provided; for the final discharge of the assignee on due notice; and that the assignee or any creditor or creditors representing one fourth of the liabilities might bring suit in the circuit court for the settlement of the estate, whereupon the jurisdiction of the county court should cease, and the circuit court should have all the power and authority to administer and settle up the assigned estate conferred on the county court, in addition to its power and authority as a chancery court. Ky. Stat. 1890, p. 202, chap. 7. Certain creditors filed a petition in the circuit court of the United States for the district of Kentucky in bankruptcy, on February 14, 1899, against the firm, to which its members tendered a plea and answer. The ground on which the petition was based was that Simonson, Whiteson, & Company
had within four months of the filing of the: petition made a general "assignment under" the statutes of Kentucky for the benefit of creditors to Comingor. The court adjudicated them bankrupts (92 Fed. 904), and one of them prosecuted an appeal to the circuit court of appeals for the sixth circuit, which, July 5, 1899, reversed the judgment, with directions to take further proceedings. 37 C. C. A. 337, 95 Fed. 948. On September 20, 1899, adjudication was again awarded, and on a second appeal was affirmed February 12, 1900. 40 C. C. A. 474, 100 Fed. 426. Comingor was made a defendant to the petition in bankruptcy as assignee, but no relief was prayed as against him, and he moved the court to dismiss the petition as to him for want of jurisdiction, and also, without waiving the motion, tendered an answer, but the motion was not acted on nor was his answer filed. April 1, 1899, an injunction was granted against Simonson, Whiteson, & Company and Comingor from taking any steps affecting the bankrupts’ estate, and especially in the action in the Jefferson circuit court. May 17, 1900, the case was referred to a referee, who, on May 28, without notice, entered an order that Comingor file with him an itemized and detailed statement showing his receipts and disbursements of the money and other assets belonging to the estates of Simonson, Whiteson, & Company and its members. This Comingor did, the statement showing that he had received $92,865.77; that he had disbursed $19,876.73; that he had paid his counsel $3,200; that he had drawn as commissions $3,300; that he had paid over to the receiver of the state court $59,623.61; and that he had on hand $6,766.53. This sum of $6,766.53 was subsequently paid the trustee in bankruptcy. June 20, 1900, the referee on his own motion entered an order appointing the Louisville Trust Company receiver, and directing it to apply to the Jefferson circuit court for an order directing the receiver of that court to pay over the entire fund in court, in Comingor's action there; but providing that the trust company should not appear in the Jefferson circuit court as a party to that ac-: tion, nor receive any less sum than" the" whole fund in that court. Application was accordingly made by the trust company, but the Jefferson circuit court declined to entertain the motion to withdraw the funds, because the trust company was not a party to the action and had no standing in court, but the circuit judge suggested that when the trust company filed its petition asserting its claim to the fund, as provided by § 29 of the Code of Kentucky, the court would then be authorized to entertain such motions and make such orders in its behalf as might be necessary and proper. The trust company appears to have been appointed trustee by the referee June 30, 1900, its bond as such trustee being then approved. On the same day the referee entered an order that the trust company file a petition to
be made a party to the suit in the Jefferson circuit court, and thereupon such petition was filed by it as trustee, stating among other things that the officers of the court had been paid in full and had no claims on the fund in court, and that the fund, to wit, $46,305.03, belonged to the creditors of the bankrupt concern, and that nobody else had any interest therein, neither officers, attorneys, nor anybody else, and praying that the court be directed to make the trust company a defendant, and that its petition be taken as an answer, and that the receiver of the said circuit court pay to petitioner the said sum of $46,305.03, and “for all further and proper relief.” The Jefferson circuit court thereupon entered an order makin the trust company a party defendant, an directing that it be allowed to withdraw from the fund in court the sum of $46,305.03. June 20 the referee, on his own motion, entered an order requiring Comingor and his counsel to appear and show cause three days thereafter why they should not pay over to the receiver the amount of the commissions and fees. June 23 Comingor responded as to the sum of $3,398.00 that he had retained the same on account of his commissions as assignee before any bankruptcy proceedings were had, and that he relied on the fact that he would be entitled to more than that sum #on the final settlement; that for services * rendered to"the estate he believed this court would allow at least said amount; that he was a person of no means; and had used said money from time to time, relying on the fact that it belonged to him, and had none of it left; and that he was unable to pay said money into court, as he had no money or property of any kind. The referee held the response insufficient, and made the rule absolute. The order to show cause made on the attorneys does not appear to have been pursued, but June 28, 1900, another order was made on Comingor to show cause why he should not be required to pay to the receiver the sums of money paid to them, amounting to $3,200 in all. June 30, 1900, Comingor responded that he had paid the $3,200 to his attorneys for services rendered him as his counsel while acting as the assignee before any proceedings in bankruptcy were taken. He further alleged that he had no money or means of any kind with which to pay, and referred to his former response and made it a part thereof, and insisted that he ought not to be compelled to pay the amount claimed. The referee adjudged this response insufficient, and made the rule absolute. Comingor then prayed for a review by the district court in bankruptcy of the orders adjudging his responses insufficient, and ordering him to pay to the receiver the sums of $3,398.90 and $3,200 respectively. The referee reported his findings to be that Comingor was entitled to no compensation whatever, and that he had no legal right to pay attorneys’ fees when no allow
ance had been made by the state court therefor, and that in contemplation of law he must be deemed to have the funds in his possession. The district judge referred the matter back to the referee July 16, 1900, to take testimony as to the character and value of Comingor's services and those of his counsel. The referee proceeded to do this, pending which, on November 10, Comingor tendered an amended response before the referee, setting forth that as was shown by the pleadings, records, and evidence in the case, and the entire proceedings had, neither that court nor the referee in bankruptcy had any; jurisdiction, either of the "respondent or thes matter involved, to make any such orders or require respondent to answer thereto, because the records showed that all the transactions in reference to the two sums of money took place before the petition in bankruptcy was filed, and that neither that court nor the referee in bankruptcy could proceed against respondent as attempted by order or rule to pay over or by summary process. He prayed that the rule be discharged and the orders to pay be set aside. This amended response the referee declined to entertain and it was again tendered in the district court on the filing of the referee's report. December 11, 1900, the referee reported the evidence and his conclusions thereon, that neither Comingor nor his attorneys had rendered any services of value to the estate, and that their services had in fact been injurious to the creditors, but that the fees paid to the attorneys were usual and reasonable according to the scale of compensation allowed for such services by the state court in Louisville. The district judge confirmed the report of the referee, and as to the objection of want of jurisdiction held that it could not be entertained by the court for the reason that, by long acquiescence in that mode of procedure, respondent must be regarded as having consented thereto. Thereupon an order was entered dismissing the petition for review, and adjudging that Comingor pay to the trust company, as trustee, the said sums of $3,398.90 and $3,200, on or before February 16, 1901, to all of which Comingor excepted, and filed his petition for review in the circuit court of appeals for the sixth circuit. That court entered an order staying proceedings in the district court, and thereafter on fearing reversed the decree of the district court affirming the orders of the referee requiring Comingor to pay to the trustee the sums aforesaid, with directions to set aside its order and decree, and the orders of the referee directing Comingor to pay the trustee in bankruptcy the moneys mentioned in said orders. 47 C. C. A. 51, 107 l'ed. 898. Certiorari from this court was then granted. 181 U. S. 620, 45 L. ed. 1031.
Mr. Augustus E. willson for petition-w or. en * Messrs. D. A. Sachs, Alexander Pope"
Humphrey, Morris A. Sachs, J. G. Sachs, and W. M. Smith for respondent.
Mr. Chief Justice Fuller delivered the opinion of the court: The circuit court of appeals was called on to review the orders of the referee as confirmed by the district judge, by which Comingor was required to pay over the sums of $3,308.90 and $3,200 respectively, and the recommendation that he be dealt with for not complying therewith. On the face of his responses, from first to last, it appeared that Comingor insisted that the $3,200 had been paid by him to his counsel while they were acting for him, before the bankruptcy proceedings were commenced, for professional services rendered to him as assignee; and that he had retained and expended the $3,398.90 as his commissions as assignee in reliance on the belief that he was entitled to that amount on final settlement. He thus asserted a claim to each of these sums adversely to the bankrupt, and as outstanding when the petition in bankruptcy was filed, and these claims were in fact passed upon by the referee and the district judge as being adverse. This brought the controversy within the ruling in Bardes v. First Nat. Bank, 178 U. S. 524, 44 L. ed. 1175, 20 Sup. Ct. Rep. 1000, and the questions attempted to be litigated before the referee and in the district court as to the allowance of the two amounts could only be raised in the district court by consent, and then only by plenary suit. If the jurisdiction of the district court was not consented to, then the state court, under the circumstances of this case, was the proper forum, and the matters in dispute were to be disposed of there. The district court held that Comingor had voluntarily accepted its jurisdiction, and that he had also consented that the court might proceed against him summarily. As the circuit court of appeals said, speaking through Severens, J.: “It was upon the ground of the petitioner's implied consent to the mode adopted that the district judge justified it.” § So far as this view rested on the conten* tion that, as"Comingor was joined with the bankrupts in the petition for adjudication, he therefore continued to be subject to the orders of the court without other process, we agree with the circuit court of appeals that it cannot be sustained. As we understand the record, the petition in bankruptcy set up no cause of action and prayed no special relief against Comingor, and he was apparently made a defendant because adjudication would put an end to further action by him as assignee. Clearly, as the circuit court of appeals points out, it would be inadmissible to permit creditors to deprive an assignee of his right to have his claims adjudicated by the proper court and in the customary, mode of proceeding, by the device of making him a party to the petition for an adjudication and so attempting to bring him into the case for all purposes. Nor in this matter was any petition by the
trustee, or by any other person, filed against Comingor to recover these sums, and the orders were entered by the referee on the record as it stood, so that there was no pretense whatever of a plenary suit in that court, in form or in substance. The proceeding was purely summary. The determination of the merits on the facts was not open to revision by appeal or writ of error under the bankrupt law. If Comingor had been entitled to a trial by jury, he could not have obtained it as of right. The collection of the amounts found due would be enforceable, not by execution, but by commitment. “We think that it could not have been the intention of Congress thus to deprive parties claiming property of which they were in possession of the usual processes of the law in defense of their rights.” Marshall v. Knoa, 16 Wall. 556, 21 L. ed. 484; Smith v. Mason, 14 Wall. 419, 20 L. ed. 748. The question is whether the district court had jurisdiction to finally adjudicate the merits in this proceeding. We have just held in Mueller v. Nugent, 184 U. S. 1, ante, 269, 22 Sup. Ct. Rep. 269, that the district court has power to ascertain, whether in the particular instance the claim asserted is an adverse claim existing at the time the petition was filed. And according to the conclusion reached the court will retain jurisdiction or decline to adjudicate the merits. Jurisdiction as to: the subject-matter may be" limited in va-" rious ways, as to civil and criminal cases, cases at common law or in equity or in admiralty, probate cases, or cases under special statutes, to particular classes of persons, to proceedings in particular modes, and so on. In many cases jurisdiction may depend on the ascertainment of facts involving the merits, and in that sense the court exercises jurisdiction in disposing of the preliminary inquiry, although the result may be that it finds that it cannot go farther. And where, in a case like that before us, the court erroneously retains jurisdiction to adjudicate the merits, its action can be corrected on review. We are of opinion that even if Comingor could have consented to be pursued in this manner, he did not so consent. He was ruled to show cause, and the cause he showed defeated jurisdiction over the subject-matter, that is, jurisdiction to proceed summarily. He did not come in voluntarily, but in obedience to peremptory orders, and although he participated in the proceedings before the referee, he had pleaded his claims in the outset, and he made his formal protest to the exercise of jurisdiction before the final order was entered. He had been restrained from settling his accounts in the state court in the action pending there, and the district court, instead of dissolving the injunction declining jurisdiction, and leaving the litigation to the state court, either in due course or by plenary suit, adjudicated the merits and entered a peremptory order that he should pay over, disobedience of which order was punishable