Court Opinion

ID: 8790640
Source: CourtListenerOpinion
Date Created: 2022-11-26 13:49:45.775504+00
Date Added: 2024-06-11T17:03:19.913928
License: Public Domain

On Petition for Rehearing.
The application for a rehearing is based chiefly on the proposition that the petitioner is not attempting to prove his claim for attorney’s fees against the bankrupt’s estate, but is only undertaking to prove it against a special fund pledged for the purpose of paying it. The petition, however, recites that the petitioner “filed proof of its mortgage debt as a secured claim against said bankrupt and his estate, including principal and interest, and attorney’s fees according to stipulations in said mortgage. * * * ” The trustee contested the proof of the claim as to' attorney’s fees. The proof of the claim so offered and the objections to it made the issue which was tried in the lower court. .
The case is one controlled by the bankruptcy act. Sections 57e and 57h provide that secured claims may be proved, “but shall be allowed for such sums only as to the courts seem to be owing over and above the value of their securities or priorities.” This provision should not be construed to conflict with section 63a, which prevents the proof of a claim which accrued after bankruptcy. We find no provision permitting the proof of a secured or an unsecured claim which accrued after bankruptcy.
When a secured claim is proved, the part of it that is not satisfied by the security stands like any other unsecured claim and is entitled to dividends. Collier on Bankruptcy (8th Ed.) 595. This fact, it seems to us, shows that a secured claim, which accrued subsequent to the filing of the petition in bankruptcy, cannot be proved as a claim against the bankrupt’s estate without conflicting with section 63a, quoted in our opinion. If the claim were entitled to be proved as proposed, if ■the security was insufficient to pay the debt (as might often be the case), the part left unpaid, although accruing subsequent to bankruptcy, would be placed on a level with claims which accrued before the filing *431of the petition and be entitled to dividends. This result, in our opinion, would be in conflict with the provisions of the act.
The rehearing: is
Denied.