Court Opinion

ID: 9446750
Source: CourtListenerOpinion
Date Created: 2023-08-03 22:17:28.152999+00
Date Added: 2024-06-11T17:30:45.946918
License: Public Domain

SHACKELFORD MILLER, Jr., Circuit Judge
(dissenting).
As pointed out by the majority opinion, the fundamental issue in this case is whether the order of confirmation was properly granted. If properly granted, the plan and its provisions are binding upon the debtor and upon all creditors of the debtor, whether or not they have accepted the plan or have filed their claims. Sec. 1057, Title 11 U.S.Code. If appellant is to be treated as a secured creditor whose acceptance of the plan is necessary in order for it to be confirmed, the plan was not properly confirmed, is not binding on the appellant, and its petition for reclamation was improperly denied. Sec. 1052(1), Title 11 U.S.Code; *893In re Burgemeister Brewing Co., 7 Cir., 84 F.2d 388. Compare: In re Voight-Pros’t Brewing Co., 6 Cir., 115 F.2d 733.
The provisions applicable to ordinary bankruptcy proceedings are also applicable to Chapter 13 proceedings insofar as they are not in conflict therewith. Sec. 1002, Title 11 U.S.Code. It is the settled rule in the administration of a bankruptcy estate that a secured creditor, who has the security in his possession, may rely upon his security and is not required to file proof of his secured claim, but if the security is within the jurisdiction of the bankruptcy court he must file a secured claim if ho wishes to retain his secured status. United States National Bank in Johnstown v. Chase National Bank, 331 U.S. 28, 33-34, 67 S. Ct. 1041, 91 L.Ed. 1320; Isaacs v. Hobbs Tie & Timber Co., 282 U.S. 734, 737-738, 51 S.Ct. 270, 75 L.Ed. 645.
Appellant was listed as a creditor and had notice of the proceedings and the purpose thereof. If the security for its claim had been in its possession, it could have relied upon its security and enforced its claim outside of the bankruptcy proceedings. But since the automobile was in the possession of the Bankruptcy Court and the official record of the court did not show or indicate that it was subject to a lien, I am of the opinion that it was the duty of the appellant to file a secured claim if it wished to participate in the bankruptcy proceedings and assert its position as a secured creditor. United States National Bank in Johnstown v. Chase National Bank, supra, 331 U.S. 28, 33-34, 67 S.Ct. 1041; De Laney v. City and County of Denver, 10 Cir., 185 F.2d 246, 251.
The issue is accordingly presented whether the statement of appellant’s attorney at the meeting of creditors is to be considered as a filing of its claim so as to make effective its objection as a secured creditor to the approval of the plan. It is correct, as stated in the majority opinion, that the listing of appellant as an unsecured creditor is not conclusive, but unless issue is made with respect thereto, that is what the record says and we are required to go by the record. Appellant had the right to raise the issue on the record by filing proof of its claim showing it to be a secured one. Failure to do so leaves appellant classified by the record as an unsecured creditor. Oral, unsworn statements by an attorney can not be accepted in lieu of proof of claim. It fails to comply in several respects with the mandatory requirements of Sec. 93, subs, a and e, Title 11 U.S.Code. Avidon v. Halpert, 2 Cir., 145 F.2d 884; In re Stylerite, Inc., D.C.N.H., 120 F.Supp. 485. Filing of a reclamation petition might be treated as filing a secured claim, but in the present case the reclamation petition was not filed until after the plan was confirmed. Appellant had notice that the plan was up for confirmation.
Unless the requirements of the statute with respect to proof of claim are complied with, there is no opportunity to contest the validity of the claim. An off-the-record assertion of a claim does not give it any validity. Even if filed in formal statutory manner, it does not automatically become a valid claim. There may be several defenses to the validity of this claim or its secured status, including such well-known defenses as fraud, invalid execution or acknowledgment of the instrument, and payment in full after elimination of invalid finance charges or usury. We can not assume that appellant’s alleged secured claim is a valid one. The burden of proving a claim is upon the creditor asserting it if he wishes to participate in the administration of the estate. Sec. 93, subs, a, d and f, Title 11 U.S.Code; Gardner v. State of New Jersey, 329 U.S. 565, 573, 67 S.Ct. 467, 91 L.Ed. 504. On the record before us there is no secured creditor who is entitled to object to the confirmation of the plan.
I do not believe that notice on the part of the trustee of an alleged but unproven claim requires the trustee or the Bankruptcy Court to give consideration to such a claim in the administration of the bankruptcy estate. The burden is upon the creditor to prove his claim as *894required by the statute. In the absence of such proof, the claim can not be recognized. Sec. 93, sub. n, Title 11 U.S. Code; Avidon v. Halpert, supra, 2 Cir., 145 F.2d 884; In re Stylerite, Inc., supra, D.C.N.H., 120 F.Supp. 485.
I would affirm the judgment of the District Court.