Court Opinion

ID: 9444169
Source: CourtListenerOpinion
Date Created: 2023-08-03 19:44:17.37592+00
Date Added: 2024-06-11T17:29:44.884596
License: Public Domain

FRANK, Circuit Judge
(dissenting).
I think the district court erred in not requiring a bond pursuant to F.R.C.P. 65(c) and General Order in Bankruptcy No. 37, 11 U.S.C.A. following section 53. The Seventh Circuit has recently so held in a case which, as my colleagues say (in their note 2), is in direct conflict with their decision. See Chatz v. Freeman, 7 Cir., 204 F.2d 764. The opinion of that court so adequately states my views that it will serve no purpose for me to report them.' It satisfactorily distinguishes In re Barrett, D.C., 132 F. 362, cited by my colleagues. It cites and quotes from 4 Collier, Bankruptcy (14th ed.) 390-391 and 5 Remington (5th ed.) 315.
I would add only this: In In re Lustron Corp., 184 F.2d 798, an earlier decision by the Seventh Circuit,1 and in three other cases cited by my colleagues,2 it was held merely that the Bankruptcy Court has power by injunction without bond to grant a temporary injunction to preserve the status quo pending (1) the institution of a plenary action by the trustee or (2) his intervention in a plenary suit brought by others elsewhere. Those decisions do not hold that such an injunction without bond shall continue after the plenary suit has been instituted or the trustee has thus intervened; see also 67 Harv.L.Rev. (1953) 512.
Magidson v. Duggan, 8 Cir., 180 F.2d 473, is the only case in accord with my colleagues’ decision. I hope that, because of the conflict with the Seventh Circuit decision, the Supreme Court will grant certiorari.
On Petition for Rehearing.
HINCKS, Circuit Judge.
The petition is based upon the statement in our opinion that “the sworn allegations of the complaint” were before the judge below when he made his stay order. It is true that this statement is not literally accurate: the complaint was not verified. But it incorporated an agreement between the bankrupt and the individual defendants who were all the stockholders of the corporate defendant and also officers, directors and stockholders of the bankrupt, and this agreement was verified. The complaint also incorporated a “lease” from the corporate defendant to the bankrupt. *865Both the verified agreement and the lease were admitted in the defendants’ answers to the complaint, together with numerous other allegations of the complaint. These admissions, coupled with the allegations of the plaintiff-appellee’s verified petition for the stay, we think constituted a sufficient factual basis to support the exercise of the power conferred on the court by Section 2, sub. a(15) to maintain the statu quo pending the determination of the controversy.
Accordingly, the petition for rehearing is in all respects denied, FRANK, J., not concurring.

. There the Bankruptcy Court, sitting in Illinois, issued a temporary injunction to prevent parties to a suit pending in Ohio from procuring confirmation of judicial sales, in foreclosure of liens, until the further order of the bankruptcy court. In sustaining the injunction order, the Seventh Circuit said, 184 F.2d at page 796, that that order was temporary and intended to maintain the existing status, in order to permit the bankruptcy trustees a reasonable time to investigate and decide whether they should seek to intervene in the Ohio suit, and there set up the invalidity of the liens,

. In re Metzger’s, Inc., D.C.Mich., 68 F.Supp. 663; Sproul v. Gambone, D.C.Pa., 34 F.Supp. 441; cf. Steelman v. All Continent Corp., 301 U.S, 278, 287, 57 S.Ct. 705, 81 L.Ed. 1085.