Court Opinion

ID: 8795927
Source: CourtListenerOpinion
Date Created: 2022-11-26 14:10:30.105228+00
Date Added: 2024-06-11T17:03:37.752366
License: Public Domain

WARD, Circuit Judge
(dissenting). In order to perform its duty of promptly winding up an estate in bankruptcy, the court has power to require claims against property in its possession to be made within a fixed reasonable time or thereafter to be barred. In re T. A. McIntyre & Co., 176 Fed. 552, 100 C. C. A. 140; Penna. Steel Co. v. New York City Railway Co., 198 Fed. 721, 741, 742, 117 C. C. A. 503; Pennsylvania Steel Co. v. New York City Ry. Co,, 216 Fed. 458, 472, 132 C. C. A. 518. The proceeding in such cases is in rem. As between these claimants, the bankrupt, and the hank, the securities in question were lawfully hypothecated. The Bankruptcy Act, however, authorizes the trustee, and only the trustee, to avoid transfer if preferential. Sec. 60b. In this case he did not take any steps to do so until after the time fixed by the court for making claims had expired. Within that period there was nothing to show that any such proceeding would be taken or if taken would prevail. I think the order should not he held effective as to these securities, because they were not in the possession of the court within the time fixed for proving claims. It seems to me that it was beyond the power qf the court to bar claimants before it had the res in its hands. Then, of course, a limit could be- fixed within which adverse claims could be made, and reasonable conditions imposed as to contribution by claimants to the expenses of the proceedings to set aside the transfer. Such of the claimants as could not trace their securities in accordance with the rule laid down in our late decision (In re Hollins, 219 Fed. 544, 135 C. C. A. 312) could not recover. Except as to such claimants, if any, the order should be reversed.