Opinion ID: 1504496
Heading Depth: 1
Heading Rank: 4

Heading: Possession by the Bankruptcy Court.

Text: The actual possession of this disputed property was, when the involuntary petition was filed, in the receiver of the Kentucky court. If possession was in the bankruptcy court, it was constructive possession; and constructive possession is sufficient basis for jurisdiction in the bankruptcy court to determine rights as to such property in a summary proceeding. Collier on Bankruptcy, p. 779, and note 145; Taubel, etc., Co. v. Fox, supra; May v. Henderson, 268 U. S. 111, 115, 45 S. Ct. 456, 69 L. Ed. 870; Isaacs v. Hobbs Tie & Timber Co., 282 U. S. 734, 51 S. Ct. 270, 75 L. Ed. 645; Page v. Ark. Nat. Gas Corp., 53 F.(2d) 27, 34 (C. C. A. 8). The question, therefore, is whether the bankruptcy court had constructive possession of this property. The original proceeding in the Kentucky court, filed the day before the involuntary petition, was, as above indicated, a creditor's bill having as its purpose the marshaling of assets and debts, payment of debts, and sale of property of the Kentucky State Telephone Company. It was a liquidating or winding up proceeding of a concern unable to meet its obligations as they became due and then in default. The receiver appointed thereunder was a liquidating receiver. Such receiver, appointed within four months of the involuntary petition, holds for the bankrupt and not adversely or in opposition thereto. Bryan v. Bernheimer, supra; Louisville Trust Co. v. Comingor, 184 U. S. 18, 22 S. Ct. 293, 46 L. Ed. 413; Randolph v. Scruggs, 190 U. S. 533, 536, 23 S. Ct. 710, 47 L. Ed. 1165; Stellwagen v. Clum, 245 U. S. 605, 613, 38 S. Ct. 215, 62 L. Ed. 507; Galbraith v. Vallely, 256 U. S. 46, 41 S. Ct. 415, 65 L. Ed. 823; May v. Henderson, supra; Straton v. New, 283 U. S. 318, 51 S. Ct. 465, 75 L. Ed. 1060. The receiver appointed in the foreclosure proceeding in the Kentucky state court gained no rights as to this property because such appointment and possession came after the involuntary petition in bankruptcy had been filed. Isaacs v. Hobbs Tie & Timber Co., supra; Straton v. New, supra; Pugh v. Loisel (C. C. A.) 219 F. 417; State of Missouri v. Angle, 236 F. 644 (C. C. A. 8); McGonigle v. Foutch, 51 F.(2d) 455, 460 (C. C. A. 8).