Court Opinion

ID: 9643647
Source: CourtListenerOpinion
Date Created: 2023-08-22 20:36:17.223499+00
Date Added: 2024-06-11T18:11:02.079558
License: Public Domain

CLARK, Circuit Judge
(dissenting).
I think this is typically the kind of case where wise bankruptcy administration calls for a wide measure of discretion in the trial court, with resort to other tribunals discouraged. Certainly expeditious settlement of bankrupt estates is not fostered by appeals such as this. The change effected by the Chandler Act in Bankruptcy Act, § 2, sub. a(8), 11 U.S.C.A. § 11, sub. a (8), to provide for the reopening of closed estates “for cause shown,” instead of “whenever it appears they were closed before being fully administered,” 11 U.S. C.A. § 11 (8), emphasizes this reliance on judicial discretion. And there is serious doubt whether a creditor — now forbidden to oppose an involuntary petition — can appeal here. Hunter v. Commerce Trust Co., 8 Cir., 55 F.2d 1, citing cases; In re Hopkins, D.C.W.D.N.Y., 11 F.Supp. 831; 1 Moore’s Collier on Bankruptcy, 14th Ed., p. 233; compare Bankruptcy Act, § 18, sub. d, 11 U.S.C.A. § 41, sub. d; Syracuse Engineering Co. v. Haight, 2 Cir., 110 F.2d 468, 469; 2 Moore, op. cit. 66.
But if we are to review the discretion exercised separately by the three judges below, I think a correct result was reached. The last of the three, Conger, J., reviewed all the prior proceedings carefully. D.C.S.D.N.Y., 34 F.Supp. 684. And Judge Leibell, who granted the original order to reopen, had all the salient facts before him, including the original adjudication, September 2, 1939, and the closing of the case on March 27, 1940, for failure to deposit the fee for the creditors’ first meeting. It seems, too, that the bankrupt acted within five days after he received notice through the return of part of his original filing fee. I should have thought it undesirable then to have forced him to file schedules anew; all it would have meant, outside of delay, was a net loss of $25 of the filing fee — probably too small a sum to furnish an object lesson to other dilatory bankrupts. Perhaps a more vital objection is the possible inequity to the bankrupt’s present creditors; by our interference at this late day we make absolute the garnishment lien of a 1933 creditor with a dis-chargeable claim. As the House Committee said in reporting the Chandler bill [H.R.Rep. No. 1409, 75th Cong., 1st Sess. (1937) 17] : “A creditor should not,be permitted to oppose an adjudication; invariably, the motive of such a creditor is to protect a preference or to retain some other undue advantage at the expense of the other creditors, contrary to the fundamental purpose of the act — an equitable distribution among all creditors.”