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rejecting a claim of $500 or over. Subdivision b of § 25 regulates appeals from the Circuit Court of Appeals to this court, and is confined to decisions of the Circuit Courts of Appeals allowing or rejecting a claim under the act, first, where the amount in controversy exceeds the sum of $2,000 and the question involved is one which night have been taken on appeal or error to this court from the highest court of a State; or, second, where a Justice of this court shall certify that in his opinion the determination of the question involved in the allowance or rejection of the claim is essential to a uniform construction of the act. Section 25 further provides that controversies may be certified to the Supreme Court from other courts of the United States and that the Supreme Court may exercise jurisdiction thereof and issue writs of certiorari pursuant to the laws of the United States.

It will be noticed that the only appeal in bankruptcy proceedings from a judgment granting or refusing a discharge is from the bankruptcy court to the Circuit Court of Appeals.

The present appeal must therefore be dismissed.

LOVELL, TRUSTEE IN BANKRUPTCY OF
KNIGHT, v. NEWMAN & SON.

ERROR TO THE CIRCUIT COURT OF APPEALS FOR THE FIFTH CIRCUIT.

No. 593. Submitted January 13, 1913.-Decided February 24, 1913.

Where the jurisdiction of the Federal court of a suit brought by a trustee in bankruptcy rests upon diverse citizenship alone the judgment of the Circuit Court of Appeals is final; if, however, the petition also discloses as an additional ground of jurisdiction that the case arises under the laws of the United States, the judgment of the Circuit Court of Appeals is not final but can be reviewed by this court.

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Whether the case is one arising under the laws of the United States must be determined upon the statements in the petition itself and not upon questions subsequently arising in the progress of the case. Macfadden v. United States, 213 U. S. 288.

Section 23 of the Bankruptcy Act as amended by the act of February 5, 1903, conferring jurisdiction on the Circuit Courts of certain classes of cases was not intended to increase the jurisdiction of those courts in bankruptcy matters but rather to limit it to the classes of cases over which those courts are given jurisdiction by the acts creating them. Whether the Federal court had jurisdiction on grounds other than diverse citizenship must be determined from complainants' own statement as set forth in the bill affirmatively and distinctly, regardless of questions subsequently arising; grounds of jurisdiction may not be inferred argumentatively.

A suit to enforce a right which takes its origin in the laws of the United States is not necessarily, or for that reason alone, one arising under those laws. There must be a controversy respecting the validity, construction or effect of such a law upon the determination of which the result depends.

Where a trustee in bankruptcy sues in the Federal court on the ground that the property, or bond representing the value thereof, belonged to the bankrupt, and diverse citizenship exists, the suit does not depend upon the validity, construction or effect of any law of the United States, and the judgment of the Circuit Court of Appeals is final.

Where a trustee permits a bond to be given for value of goods and sues on the bond as merely representing the goods, and not as required by any statute, the case is not one arising under the laws of the United States, and jurisdiction is not conferred on the Federal court by reason of the existence of such a bond.

Where diversity of citizenship exists, the trustee can sue in the Federal court without consent of defendant and if consent be given, it does not, where such diversity exists, create an independent ground of jurisdiction.

Writ of error to review 192 Fed. Rep. 753, dismissed.

THE facts, which involve the jurisdiction of this court on appeals from and error to the Circuit Court of Appeals in cases brought by trustees in bankruptcy, are stated in the opinion.

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Mr. John W. Griffin and Mr. Everett P. Wheeler, for defendants in error, in support of motion to dismiss or affirm.

Mr. W. A. Blount, Mr. H. Generes Dufour and Mr. Walker Percy, for plaintiff in error, in opposition thereto.

MR. JUSTICE DAY delivered the opinion of the court.

This case is submitted upon motion to dismiss or affirm. The action was brought by William S. Lovell, Trustee of Knight, Yancey & Company, against Isidore Newman & Son and others in the United States Circuit Court for the Eastern District of Louisiana, to recover stipulated damages in the sum of $98,500 on a certain bond. Issues were joined and the case was tried and a judgment rendered in favor of the defendants. 188 Fed. Rep. 534. On writ of error the Circuit Court of Appeals affirmed that judgment. 192 Fed. Rep. 753.

A writ of certiorari to the judgment of the Circuit Court of Appeals was prayed and denied. (December 23, 1912.) The question of jurisdiction presented is, Was the judgment of the Circuit Court of Appeals final or is it subject to review by writ of error in this court? As the present suit was upon a bond and concerns the right of the trustee to recover thereon, it presents a controversy arising in a bankruptcy proceeding, the finality of which in the Circuit Court of Appeals depends upon the application of the Circuit Court of Appeals Act to the case. Hewit v. Berlin Machine Works, 194 U. S. 296; Coder v. Arts, 213 U. S. 223, 233; Knapp v. Milwaukee Trust Co., 216 U. S. 545, 553; Tefft, Weller & Co. v. Munsuri, 222 U. S. 114, 118. If the jurisdiction in the present case rests alone upon diverse citizenship, then, under the Circuit Court of Appeals Act, the judgment of the Circuit Court of Appeals is final; if, as contended by the plaintiff in error, the peti

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tion in the case discloses, as a ground of jurisdiction in addition to that of diverse citizenship, that the case arises under the laws of the United States, then the judgment of the Circuit Court of Appeals is not final and the case can come here from that court. And it is well settled that this question must be decided, not because of questions which may have arisen or which might arise in the subsequent progress of the case, but upon the grounds of jurisdiction asserted in the petition. Macfadden v. United States, 213 U. S. 288.

Turning then to the petition for the assertion of the cause of action upon which this suit was brought, we find from its averments that Knight, Yancey & Company, partners, doing business in Decatur, Alabama, were adjudicated bankrupts by the District Court of the United States for the Northern District of Alabama on the twentieth of April, 1910; that Lovell, the trustee in bankruptcy, is a citizen of the State of Alabama, and also that the members of the partnership and each of them are citizens of other States than Louisiana. It appears in the petition that on the third of May, 1910, C. E. Frost and Lovell, who were then receivers in bankruptcy of Knight, Yancey & Company, filed, as such receivers, in the United States District Court for the Eastern District of Louisiana, their petition, which is attached to and made part of the petition in this case, setting forth that certain cotton was in the possession of the master of the Steamer Ingelfingen at the port of New Orleans, and would, unless restrained, be shipped beyond the jurisdiction of the court; that certain persons in Italy held spurious bills of lading upon which they would seek to obtain possession of such cotton; that the original bills of lading had been destroyed or made away with and were not in the hands of bona fide holders; that therefore the legal title to the cotton was in the petitioners and that any attempt to ship the cotton to a foreign country would result in depriving the

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bankrupt estate of that asset and would subject it to the claims of foreign creditors, and would constitute an unlawful preference within the meaning and intendment of the Bankruptcy Act in favor of the foreign holders of the spurious bills of lading, and they prayed for an injunction or that in the alternative the court would order the United States Marshal to seize and take possession of the cotton, and prayed for an order upon the master of the Steamer Ingelfingen, its owners and agents, to show cause, if any they could, why the relief prayed for should not be granted. A restraining order was issued by the District Court, the master of the Ingelfingen appeared, excepted to the petition, alleging that the receivers had no right or capacity to institute suit and that the court was without jurisdiction, and afterwards filed an answer in which he set up that the partnership had sold cotton to various Italian purchasers under contracts in the usual mercantile course, that is, it had shipped the cotton to Italy to its order upon through bills of lading, and drafts for the price of the cotton with the bills of lading attached had been discounted, the Italian purchasers finally taking up the drafts and securing the cotton covered by the bills of lading; that in February, 1910, the partnership discounted, and the Italian purchasers subsequently paid, certain drafts with bills of lading attached, alleged in the petition to be forged, covering 1400 bales of cotton bearing certain marks, and they acquired the bills of lading in the regular course of business, prior to the filing of the petition in bankruptcy, for value and in ignorance of the forgery; that in March and April of that year the partnership shipped the cotton called for by the bills of lading, the cotton bearing the same marks and the bills of lading being substantially identical with the alleged forged bills of lading, and being the bills of lading alleged in the petition to have been made away with, and that 89 bales of the cotton were previously exported and the 1311 remain

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