Bien v. Robinson

Background

A New York stockbroker firm, Haight & Freese Company, faced court receivership after claims against it, and James D. Colt (and later Edmonds) were appointed to take control of the company’s assets. A separate lawsuit in New York federal court also named the firm and led to a court order that barred anyone from paying or transferring the company's money to anyone except the court-appointed receivers. Franklin Bien, a lawyer who had acted for the company, received a company check the same day receivers were appointed but before the formal bill was filed; he later learned of the receivership, had the check certified, endorsed it, and collected the funds through a third party. The receivers then filed for an order requiring Bien to repay the collected money.

Reasoning

The Court considered whether the Supreme Court could review the case on jurisdictional grounds under the 1891 law and whether Bien was entitled to a jury trial or other protections. It explained that the 1891 provision allows review only when a federal court’s jurisdiction as a federal tribunal is directly in issue, and that the present dispute centered on the circuit court’s general authority to use equity summary remedies, not its status as a federal court. The Court also held that payment of the check before the bill was filed did not defeat the receivers’ claim, and that an equity court properly may, after notice and hearing, use summary process to compel repayment by someone who knowingly violated an injunction.

Real world impact

The Court dismissed the writ of error as baseless and let the lower court’s order stand. That outcome confirms that courts supervising receivers can quickly recover assets taken in violation of injunctions. Lawyers, creditors, and others who accept or cash company funds after learning of a receivership risk being ordered to return those funds.