Court Opinion

ID: 6857780
Source: CourtListenerOpinion
Date Created: 2022-07-23 20:44:29.331755+00
Date Added: 2024-06-11T16:05:11.517788
License: Public Domain

CHASE, Circuit Judge
(dissenting).
Jurisdiction of the bankruptcy court depends upon “possession”; i. e., upon whether there was a debt due the bankrupt from the state of New York when the petition in bankruptcy was filed which constructively came into the possession of the trustee in bankruptcy. If there was, the theory of constructive possession, as extended in Re Borok (C. C. A.) 50 F.(2d) 75, to the point where the debt- or was said to hold the debt for the bankrupt, might warrant holding that the trustee has sufficient “possession” here to give jurisdiction to the bankruptcy court to determine the rights of claimants to a fund admittedly due. But what is called constructive possession is only the right to possession. At best, we are but dealing with a fiction when we speak of the possession of a chose in action. And where the existence of the debt is disputed by the alleged debtor, all the trustee in bankruptcy has is the right to bring an action in the state court (the state court of claims in this instance) to determine whether there is even a valid chose in action upon which the constructive possession that gives jurisdiction to the court of bankruptcy can be based.
It seems to me that reason forbids taking the added step necessary to hold that a disputed cause of action is property in possession, even constructively, to give the court jurisdiction; and that the order should be affirmed on the principles set forth in Re Grissler (C. C. A.) 136 F. 754.