Court Opinion

ID: 8769560
Source: CourtListenerOpinion
Date Created: 2022-11-26 12:38:35.631677+00
Date Added: 2024-06-11T17:02:07.525019
License: Public Domain

WARD, Circuit Judge.
This is a petition to review and an appeal from an order of the District Court denying the motion of the Bornc-Scrymser Company, a contract creditor of, and of Kelley and others, tort claimants against, the New York Tunnel Company, an adjudicated bankrupt, for an order vacating the adjudication, and for leave to plead, answer, or demur to the petition for adjudication on the ground that the corporation is not within the bankrupt act (Act July 1, 1898, c. 541, 30 Stat. 544 [U. S. Comp. St. 1901, p. 3418]).
It is objected by the contract creditors and by the trustee, among other things, that the Borne-Scrymser Company has no standing because, having previously filed its claim in bankruptcy, it has acquiesced in the adjudication (In re Worsham, 142 Fed. 121, 73 C. C. A. 665), and that the tort claimants have no standing because their claims are not provable in bankruptcy (In re New York Tunnel Co., 159 Fed. 688, 86 C. C. A. 556). Although we think these objections are good, still, if the appellants and petitioners have called our attention to a jurisdictional defect which makes the adjudication a nullity, we feel bound to consider it.
If the petition for adjudication were made by only two creditors, the law requiring three, there would be a jurisdictional defect on the face of the record, making any adjudication void. On the other hand, if the aggregate amount of claims were stated to be $500, as required by law, and because of set-offs or other reasons was in point of fact less, an adjudication would be an error to be corrected by appeal. So, if the petition were against a railroad company, there would be on the face of the record such a jurisdictional defect as would make an adjudication void: whereas, if the corporation might or might not be considered within the act, an adjudication, even if erroneous, would have to be corrected by appeal.
At the time the adjudication' was made in this case building companies had been held in two districts of this circuit to be within the act. In re Niagara Contracting Co. (D. C.) 127 Fed. 782; In re Rutland *286Realty Co. (D. C.) 157 Fed. 296; In re Church Construction Co. (D. C.) 157 Fed. 298. We have since decided, in the Matter of the Kingston Realty Co., 160 Fed. 447, 87 C. C. A. 406, that they are not subjects of adjudication. It is, moreover, argued in this case that a tunnel company differs from a building company, and is within the act. Lack of jurisdiction cannot be said to have appeared on the face of the record, and therefore the adjudication made by the District Court, even if erroneous, is not a nullity, as we have held in the Matter of Altonwood Park Co., 160 Fed. 448, 87 C. C. A. 409.
The petitioners and appellants have proceeded throughout under the bankruptcy act. But they are strangers to the bankruptcy proceedings, having no right to prove their claims, to defend, or to appeal. The most they can do is to call the attention of the court as amici curiae to a want of jurisdiction of the subject-matter appearing on the face of the record. In re Columbia Real Estate Co. (D. C.) 101 Fed. 965.' It must be admitted that tort claimants, who see the property' of a person against whom they make claim seized and administered in bankruptcy to their own exclusion for the benefit of contract creditors, have an interest which should be protected and are in bad case if the law afford no remedy. We are, however, clear that they can have no relief in this case in the proceedings, they have adopted. If there be no other remedy, the bankruptcy law should be amended to, cover such cases.
Both proceedings are dismissed, but, under the circumstances, without costs.