Court Opinion

ID: 8633869
Source: CourtListenerOpinion
Date Created: 2022-11-24 19:41:58.65197+00
Date Added: 2024-06-11T16:55:51.920173
License: Public Domain

SHEPLEY, Circuit Judge.
This petition for the exercise of the revisory power of the circuit court over an order and decree of the district court in bankruptcy '. presents this question: Has the district court sitting in bankruptcy, authority, after a debt has been proved in the usual mode, to re-examine the claim and expunge or diminish it, or to refer it to a register for re-examination with a view to its being expunged or diminished, for causes, such as payment or other causes, alleged to have arisen after the proof was made? It is denied by the petitioner that this power exists except under a proceeding by bill in equity. The twenty-second section of the bankrupt act [of 1867 (14 Stat. 527)] authorizes the court to “reject all claims not duly proved, or where the proof shows the claim to be founded in fraud, illegality, or mistake.”
The thirty-fourth of the general orders in bankruptcy provides as follows: “When the assignee or any creditor shall desire the reexamination of any claim filed against the bankrupt’s estate, he may apply by petition to the register to whom the cause is referred for an order for such re-examination; and thereupon the register shall make an order fixing a .time for hearing the petition, of which due notice shall be given by mail addressed to the creditor. At the time appointed. the register shall take the examination of the creditor, and of any witnesses that may be called by either party; and if it shall appear from such examination that the claim ought to be expunged or diminished, the register, if no objection be made, may order accordingly. If objection be made, the register shall require the parties then, or Within a time to be fixed for that purpose, to form an issue to be certified into court for determination.” This general order was promulgated by the supreme court of the United States under the authority conferred upon the court by the tenth section of the bankrupt act to frame general orders “for regulating the practice and procedure of the district courts in bankruptcy, and generally for carrying the provisions of this act into effect.” Whether the order be considered as indicating the construction which the court put upon the twenty-second section of the act, or as intended to regulate the practice and procedure in cases not covered by the twenty-second section, the order clearly applies to the practice and procedure of the court in a ease like this, and is one clearly within the power of the court to frame, not being repugnant to any of the provisions of the act, and within the purposes enumerated in the tenth section. Petition for review dismissed.