Court Opinion

ID: 8630500
Source: CourtListenerOpinion
Date Created: 2022-11-24 19:36:54.08297+00
Date Added: 2024-06-11T16:55:45.131339
License: Public Domain

HUGHES, District Judge.
This is not a hearing of the case on its merits on the bill and answer. That cannot be until the cause is matured for the October term. This is simply a hearing of the motion for a preliminary injunction. The only matter before me now is the motion for a preliminary injunction. The property advertised to be sold is a part of the estate of the bankrupts, Asa Snyder & Co. As such it is in the custody of the district court. That court, under section 711, has exclusive jurisdiction of all matters in bankruptcy; and, under section 4972, the exclusive power of the court extends “to the ascertainment and liquidation of the liens and other specified claims” upon the property, which is the subject of controversy in the bill and answer. That being so, how could the trustees named in the deed of trust constituting a lien upon this property, with any shadow of legal propriety', have advertised it for sale without authority from the district court? Their sale would be invalid if it was made. If they had applied to the court, and there had been no objection made by the trustee in bankruptcy, it would, as a matter of course, have appointed them special commissioners, and directed them to sell as nearly as practicable according to the provisions of the trust deed. But, in the absence of such authorization from the court, they cannot sell; and, if they sold, the sale would be invalid. I must enjoin the sale, and then the question would be, whether a special order should be made appointing the trustees who have advertised, special commissioners of the court, with instructions to sell according to the terms of the deed.
But there is one objection to this course. An order of sale will be given, but now is not the proper time for it. Clear as the case of the defendant might now appear to me, I cannot prejudge it against the complainant, who may have important evidence to submit at the final hearing w'hich may change its whole aspect. There is even now a question as to the amount of the lien existing on the property. While such question exists, we *913are prohibited by the rules and usages of all equity courts from directing or authorizing a sale of the property. There shall be very little delay in ordering a sale, probably, by the trustees under the trust deed, as special commissioners; but we must have a hearing on the merits, on bill and answer, beforehand, based on a report settling the liens and their priorities. The preliminary injunction must be granted;
[For further proceedings in this cause, see Case No. 8,999.]