
    Pindell, assignee vs. Vimont’s Ex’or, &c.
    APPEAL PROM FAYETTE CIRCUIT.
    1. Upon a decree in bankruptcy being rendered, all the rights, inter ests, and choses in action of the bankrupt passes to the assignee.
    2. Where, by the terms of a mortgage the mortgagee has a right to retain the possession of the mortgaged property, the assignee in bankruptcy cannot take it, until the mortgaged debts are extinguished.
    3. An assignee in bankruptcy, who comes into the state courts by answer and cross-bill, and submits his rights as assignee to be heard and adjudicated, is estopped to question the jurisdiction in the court of appeals.
    Case 7.
    
      4. The eimút eotirfc, on dismissing a bill for want of the proper parties, should dismiss without prejudice to another suit.
    June 12,
    Case stated.
   Chief Justice Hisn

delivered the opinion of the court.

John S. Vimont, being the owner at one time of eleven shares of stock in the Lexington and Richmond turnpike road company, and of a claim for the value of a quantity of broken stone prepared for the said turnpike road, he, on the 7th March, 1840, made and acknowledged a deed of mortgage to Lewis Vimont and six others, who were his sureties for large sums due to the Northern Bank, conveying to them, for their indemnity, a large amount of real and personal estate, including the said eleven shares of road stock and dividends due thereon, and his demands against the road company. This mortgage was recorded in Bourbon county only, on the day of its date. Said J. 5. Vimont, in 1843, filed his petition in the appropriate federal court, together with his list of assets, as a bankrupt, and in February of that year R. Pindell was appointed as the assignee in bankruptcy of said Vimont, who was then declared a bankrupt. The list of assets contains, as items, the claim against the road company for the broken stone, estimated at $1,308, and also the eleven shares of road stock, estimated to be worth (,U65, (pages 30 and 31,) and it is stated in the inventory that both the stock and claim for the broken .stone were, with other property, incumbered by the said mortgage. J. S. Vimont had, in 1839, been paid by the road company $300 in part for the broken stone, by a credit to that extent upon his stock account, (page 18.)

After!. S. Vimont had been,by an order of the U. S. district court, declared a bankrupt, and after R. Pindell had been appointed as the assignee of the bankrupt’s estate, the mortgaged property, including the said eleven shares of road stock, was sold at public sale in Lexington, after public notice, with the consent of the mortgagor and all the mortgagees, and Lewis Vimont, one of the mortgagees, became the purchaser of the eleven shares of road stock, and thereupon the road company issued to him, and in his name, a certificate for the said shares of stock, dated 25th March, 1845, (page 10.) It appears that Pindeli, as assignee in bankruptcy, as aforesaid, and Lewis Yimont, as purchaser of the stock and as one of the mortgagees, as aforesaid, both claimed from the road company the dividends on the road stock, and the amount due for the broken stone, whereupon the road company, by their president, brought a suit in equity in September, 1849, in the Fayette circuit court, to have the claims and rights of the parties determined, and requiring Pindeli and Lewis Yimont, the only defendants made by the bill, to interplead in order to the adjustment of the controversy between them. Pendell answers and claims the dividends and the sum due for the broken stone, as assignee in bankruptcy of the estate of the bankrupt, John 8. Yimont, and makes his answer a cross-bill against Jefferson Yimont, executor of Lewis Yimont, who had, in the meantime died. The executor answers, and pleads over against Pin-deli, and claims the stock dividends thereon, and the proceeds of the broken stone, as executor of Lewis Yimont, deceased, on the ground of the purchase of the stock by the testator, and as the personal representative of one of the mortgagees, insisting that the stock, accruing dividends, and the money due for the stone, are necessary, in addition to the other mortgaged property, to satisfy the mortgage, which he alleges is still unsatisfied. The circuit court decreed against Pindeli, ratified the sale of the stock to Lewis Yimont, and directed the road company to pay the dividends to his executor, but gave day to Pindeli to bring all the mortgagees before the court, and to make farther preparation, in order that it might appear whether the debts named in the mortgage had or had not been paid in whole or in part, and postponed any determination as to the money due for the broken stone until Pindeli should make such preparation, and bring the necessary parties before the court, and show that the mortgagees were already satisfied by the proceeds of the sale of the other mortgaged property. Pindell failed to bring the mortgagees before the court, or to make any further preparation, and failed to show that the proceeds of the stone were relieved in whole or in part from the incumbrance of the said mortgage, and thereupon the court, by a final decree, ratified the sale of the mortgaged property which had been made by agreement of the mortgagees, directed the road company to pay over the amount due for the broken stone to Lewis Vimont’s executor, in trust for tho use of all the mortgagees, and dismissed PindelFs cross-bill with costs, to be paid out of the bankrupt’s assets, if any. Pindell, as plaintiff in error, has brought the case to this court, and demands a reversal of the "decree of tho circuit court, because, as insisted, the same is wholly erroneous, and should have been rendered in his favor.

Í. TTponadeereo in bankruptcy being rendered, ' all the rights, interests and choses in action of the bankrupt passes to the assignee.

2. Where, hy the terms of a mortgage the mortgagee has a right to retain tho possession of the mortgaged property, the assignee in b ankruptcy cannot take it, until the mortgage debts are extinguished.

Meld, by this court upon the facts thus extracted from the pleadings and proof, that after J. S. Vimont had been declared to be a bankrupt by the U. S. district court, and after, by order of that court, .Pindell had received the appointment of assignee of the bankrupt’s effects, he was entitled to all the property, real and personal, rights, interests, and choses in action which had belonged to the bankrupt, consequently Pindell was entitled to the equity of redemption of J. S. Vimont in audio all the property and choses in action described in the deed of mortgage, to Lewis Vimont and others — that is to say, after all the debts had been satisfied and paid, with the accruing interest and costs, by the means provided for that purpose in the mortgage, then Pindell, as assignee, would have a right to receive, demand, and recover the balance of means, if any were left, to be distributed proportion ably with the other means of the bankrupt in his hands amongst the general creditors.

But by law, as well as by the express provisions of the mortgage itself, the mortgagees had a right to acquire and to retain the possession of the mortgaged property and effects, as against the bankrupt himself, and his assignee, until their liabilities, for debts then impending, should be fully extinguished; then, as Pindell failed to bring all the necessary parties in in • terest before the court, to-wit, the mortgagor and all tbe mortgagees, and wholly failed to show by proof that the debts named in the mortgage had been, paid by the bankrupt, or that, upon the application of the proceeds of the mortgaged estate and effects to their payment, that the debts had been extinguished, and that a balance of the property and effects in kind, or of their proceeds, still remained to bo paid over to the general creditors, it was impossible that a decreo could, upon the state of case presented by the record, have been rendered in favor of the bankrupt’s assignee. The mortgage was executed by J. S. Vimont long before he filed his petition in bankruptcy, and the title of tbe mortgagees was older and better than that of the assignee, who only represents the general creditors of the bankrupt, and who can only claim for them such portion, if any, of the mortgaged estate and funds as might remain after payment of the debts named in the deed.

The council for the assignee, however, contends that tbe road stock, and tbe claim against the road company for the broken stone, should have been delivered up to him to be held for the benefit of the general creditors of the bankrupt, subject however, he admits, to the encumbrance of the mortgage, and to the superior right of the mortgagees to have their liabilities first extinguished, and that the court should have decreed accordingly, and have ordered the road stock to be transferred, and the value of the stone to be paid over to him, that the whole estate and funds might be administered, and the rights of all the parties in interest settled and adjusted in the district court of the United States, which, it is insisted, has exclusive jurisdiction for that purpose. But it is held by this court, that the assignee in this case is not vested with any higher or greater right to the mortgaged property and effects than the bankrupt held at the time of the nomination and appointment of the assignee; that Vimont had no right to divest the mortgagees of the possession; neither has his assignee, until after the debts secured by the mortgage are paid; and if the circuit court had no jurisdiction of the matters involved, then Pindell cannot complain of being put out of that court without a decree in his favor at least, although, in such case, no decree should be rendered in favor of the mortgagees, or those holding under them, or either of them.

3. An assign' co in bankrupt' cy, -who comes into the state courts by answer and cross - bill, and submits his rights as assignee to be heard and adjudicated, is estopped to question the jurisdiction of the court.

But the assignee is estopped from questioning the jurisdiction of the circuit court, because ho comes into that court by his own answer, not questioning the jurisdiction, and by his cross-bill against Lewis Viuiont’s executor, claiming a decree in his favor for the road stock, the unpaid dividends due thereon, and the value of the broken stone; if therefore, such objection were tenable he has waived it, and submitted to the jurisdiction of the court in which ho voluntarily entered and demanded a decree. The circuit courts of the state, in such cases, are not the mere auxiliary tribunal of the federal court, to entertain the claim of their assignees in bankruptcy to property, and to order it to be surrendered up to them unconditionally, right or wrong, to be administered and disposed of by the bankrupt courts. If the aid of the state courts is sought and demanded by an assignee la bankruptcy to recover property, he must submit to the terms pre - scribed, and recover or not recover as the principles of law and equity governing the case, and which bear upon the claim of the assignee, and of those contesting bis right, holding paramount or superior claims to the property demanded. In this view of the law governing this case, the only error of the circuit court was committed by the-decree dismissing Pindell’s cross-bill by an absolute order, which would operate as an, effectual bar to any subsequent suit that may be instituted by Pindell against all the proper parties hereafter, to recover an ascertained balance due to him as assignee of the bankrupt.

■ 4. The circuit bill for want of the should dismiss Jico'to^anotíi»! suit.

PihdeiiIj for appellant; Robert,son for appellee.

But inasmuch as the court gave day to Pindell to introduce the proper parties into the case, to prepare the suit fully, and to show what balance, if any was due to him as having title to the equity of ^on °* the bankrupt mortgagor, and Pindell wholly failed to avail himself of the privilege, or to show to what amount he was entitled out of the mortgaged property, after payment of debts, the court, upon the cause being heard, should have dismissed his cross-bill without prejudice to his right to prosecute a suit afterwards for the same cause. For this error only, the decree is reversed, and cause remanded, with direction to dismiss Pindcll’s cross-bill without prejudice; in other respects the decree is approved, and will not be disturbed.  