Stoll v. Gottlieb, 305 U.S. 165 (1938)

Stoll v. Gottlieb

No. 20

Argued October 14, 1938
Decided November 21, 1938
305 U.S. 165

CERTIORARI TO THE SUPREME COURT OF ILLINOIS

Syllabus

1. A contention that a ruling of a state supreme court disregarded decrees of a court of the United States raised a federal question reviewable under § 237b of the Judicial Code. P. 167.

2. An order of a federal District Court, which, in a proceeding to reorganize a corporation under § 77B of the Bankruptcy Act, approved a plan of reorganization providing, inter alia, for discharge of the debtor’s bonds and cancellation of a personal guaranty thereof, held res judicata, and proof against collateral attack, in an action in a state court, brought against the guarantor (who had appeared and approved the reorganization as proposed), by one of the holders of the guaranteed bonds, who had received notice of the hearing in the District Court upon the proposed reorganization, but did not there appear, and who, after bringing his action on the guaranty, had unsuccessfully petitioned that court to set aside or modify its order upon the ground that it had no jurisdiction to extinguish the guaranty. P. 170.

In reaching this conclusion, the Court assumes that the bankruptcy court did not have jurisdiction of the subject matter of its order -- the release, in reorganization, of a guarantor from his guaranty. The decision here is based on the fact that, in an actual controversy, the question of the jurisdiction over the subject matter was raised and determined adversely to the respondent. That determination is res judicata of that issue in this action, whether or not power to deal with the particular subject matter was strictly or quasi-jurisdictional.

Vallely v. Northern Fire Ins. Co., 254 U.S. 348, distinguished.

Cases dealing with status and transfer of title to real estate are outside the scope of the present inquiry.

368 Ill. 88, 12 N.E.2d 881, reversed.

Certiorari, 304 U.S. 554, to review a judgment affirming a judgment recovered in the Municipal Court of Chicago in an action upon a guaranty of bonds of a corporation and reversing a judgment of the appellate court of Illinois, 289 Ill.App. 595, which had held to the contrary.