Court Opinion

ID: 8803833
Source: CourtListenerOpinion
Date Created: 2022-11-26 14:41:47.15456+00
Date Added: 2024-06-11T17:04:00.947680
License: Public Domain

HOUGH, Circuit Judge
(dissenting). This petition to revise should be dismissed; it was prematurely or improperly taken. The referee refused jurisdiction upon inspection of pleadings. ' The court reversed his order, and instructed him to proceed with an ascertainment of facts. This was in accordance with the ruling in Re Goldstein, 216 Fed. 888, 133 C. C. A. 91 (C. C. A. 7th), to the effect that the District Court may pursue the summary method to the point of ascertaining that the alleged adverse claim is substantial and not merely colorable. No trial was ever had, and the order directing it is the subject for review. As we have no means of knowing whether the claim is either adverse or colorable, except an ex parte statement, there is nothing to review. For this reason I dissent from the judgment given.
But the opinion of this court, dealing with what I consider a moot point, asks and answers the question: What is a colorable adverse claim? In so doing the prior decisions of this court have been disapproved ; therefore I dissent from the opinion. It seems to be admitted (and is undeniable) that under Babbitt v. Dutcher and Mueller v. Nugent, supra, the bankruptcy court may not proceed summarily to adjudicate upon the rights of an adverse claimant whose claim is more than colorable and based upon a transfer antedating the bankruptcy. Whether in this case there ever was a transfer antedating bankruptcy is the question of fact, as to which no evidence has been taken. This renders inquiry into the meaning of the words “colorable” and “adverse” necessarily in vacuo.
The proposition laid down for law is that of In re Luken, 216 Fed. 890, 133 C. C. A. 94, and is equivalent to saying that, assuming no disputed question of fact, any debatable proposition of law constitutes its maker an adverse claimant. This in turn identifies “arguable” or “debatable” with “colorable”; the latter being the word of controlling and numerous decisions. A colorable question of law is a meaningless phrase. As a modifier in legal parlance, “color” means appearance, as distinct from reality. Colorable law is certainly no more than “color of law,” which “does not mean actual law.” McCain v. Des Moines, 174 U. S. 175, 19 Sup. Ct. 644, 43 L. Ed. 936. Both “color” and “colorable” always connote pretense, sham, or falsity. Chicago, etc., Co. v. Allfree, 64 Iowa, 500, 20 N. W. 779; Virginia v. De Hart (C. C.) 119 Fed. 628.
*66In a case earlier than the Luken.and Goldstein decisions the same court declared the true rule to be that, “where the party in possession sets out in his answer facts which, if true, would constitute an adverse title,” a summary proceeding is not proper. In re Blum, 202 Fed. 887, 121 C. C. A. 241. This must be construed with tire Goldstein ruling, supra. In re Yorkville Coal Co., 211 Fed. 621, 128 C. C. A. 570, this court held that an adverse claim was disclosed by testimony which, “if submitted in a court and no evidence offered in contradiction, would be sufficient to support a judgment in favor of the claimant.” These words mean the same thing as those quoted in the opinion of the majority from In re R. & W. Skirt Co., 222 Fed. 256, 138 C. C. A. 67, where it was further and truly said that “the purpose of the act will be largely defeated if, each dime a question of law arises over the title to property, an action at law or a suit in equity must be commenced.”
To say that the adverse position must rest upon testimony which, if uncontradicted, would support it, and then add to that the doctrine that an arguable or debatable proposition of law is enough to put the trustee to the delay and expense of a suit, leaves summary jurisdiction resting on nothing but agreement. Nor can our prior decisions be explained away by now calling the claims merely colorable; in the Skirt Company Case the report contains no statement of what the point of law was; but it was plainly debatable, as counsel differed about it and the claimant prevailed in the lower court.
In Alco Film Corporation v. Alco Film Service, 234 Fed. 55, 148 C. C. A. 71, the report shows on its face that the question of adverse claim was specifically raised. Objection to service of the'order outside the district was waived, but nothing else; and it was impossible to decide that case as it was decided without holding that a claimant who raised merely propositions of law was not entitled to require a plenary suit to test his rights.
The doctrine enunciated in the case from this court was substantially adhered to in Courtney v. Shea, 225 Fed. 358, 140 C. C. A. 382 (C. C. A. 6th), where it was held that summary proceedings should be dismissed when it appeared that the claim set up existed when petition filed, and “if supported by uncontradicted testimony would sustain a judgment in favor of the claimant.” No amount of uncontradicted testimony can sustain a judgment unless the law awards it.
I do not think the District Judge misapprehended the decisions of this court; on the contrary, this judgment overrules them.