U.S. Supreme Court
International Shoe Co. v. Pinkus, 278 U.S. 261 (1928)
International Shoe Co. v. Pinkus
Argued April 11, 1928
Reargued October 22, 1928
Decided January 2, 1929
278 U.S. 261
1. A state is without power to make or enforce any law governing bankruptcies that impairs the obligations of contracts or extends to persons or property outside its jurisdiction, or conflicts with the national bankruptcy laws. P. 278 U. S. 263.
2. The fact that an insolvent has received a discharge in voluntary bankruptcy proceedings within six years and, under § 14 of the Bankruptcy Act, may not receive a new one does not preclude the filing of a new voluntary petition. P. 278 U. S. 264.
3. The plain purpose of the Bankruptcy Act to establish uniformity necessarily excludes state regulation of the subject matter, whether interfering with the Act or complementary, additional or auxiliary. P. 278 U. S. 265.
4. After plaintiff had recovered judgment on a debt, the debtor obtained from a state court a decree adjudging him insolvent and appointing a receiver to take and distribute his property under a state law (Arkansas, Crawford & Moses Digest, c. 93) which provides for surrender by an insolvent of all his unexempt property to be liquidated by a trustee for the payment of his debts under direction of the court, for classification of creditors and payment of their claims in a prescribed order, and for giving preference to those fully discharging the debtor in consideration of pro rata distribution. Plaintiff, being unable to seek relief in bankruptcy chanroblesvirtualawlibrary
because its claim was under $500.00 and all other creditor had joined in the state court proceedings, sued in that court to satisfy the judgment from the funds held by the receiver, but was denied relief upon the ground that the insolvency proceedings were not in conflict with the Bankruptcy Act, as plaintiff alleged, but were the same in effect as an assignment for the benefit of creditors.
Held that the state law is an insolvency law superseded by the Bankruptcy Act, at least insofar as it relates to the distribution of property and releasing of claims, and that plaintiff was entitled to have its judgment paid out of the funds in the hands of the receiver. Boese v. King, 108 U. S. 379, distinguished. Pp. 278 U. S. 264, 278 U. S. 266.
173 Ark. 316 reversed.
Error to a decree of the Supreme Court of Arkansas affirming the action of the Chancery Court in dismissing a bill to enforce payment of a judgment out of funds in the hands of a receiver appointed in a proceeding under the Arkansas insolvency law.