In re Worcester County

• Decision Date: 20 April 1900
• Docket Number: 318.,308,312
• Parties: In re WORCESTER COUNTY. Derby v. WORCHESTER COUNTY. In re DERBY.
• Court: U.S. Court of Appeals — First Circuit

102 F. 808

In re WORCESTER COUNTY. Derby v. WORCHESTER COUNTY. In re DERBY.

Nos. 308, 312, 318.

United States Court of Appeals, First Circuit.

April 20, 1900

Thatcher B. Dunn and James A. Stiles, for appellant.

George S. Taft, for appellee.

Before COLT and PUTNAM, Circuit Judges, and WEBB, District Judge.

PUTNAM Circuit Judge.

The underlying questions involved in these three cases are the right of the county of Worcester to prove a claim in bankruptcy, and to have priority for the claim if allowed all under the bankruptcy act of July 1, 1898, c. 541 (30 Stat. 544). The referee allowed the claim, but refused its priority. On appeal to the district court, that court, on the 21st day of July, 1899, entered an order as follows: 'It is hereby ordered and decreed that the debt may be proved by the county and is entitled to priority, and that the decree of the referee be modified accordingly. ' Derby, the trustee in bankruptcy, desired to appeal, but he failed to do so within the 10 days limited by the statute for appeals. Thereupon, on the 30th day of August, 1899, he filed a petition for rehearing. It is apparent that the purpose was to revive the right of appeal. The court treated the petition for the rehearing as a petition for a review, and on the 4th of October, 1899, granted it, and on the 10th entered an order as follows: 'It is hereby ordered and decreed that the proof of the county of Worcester be allowed as a debt entitled to priority. ' It will be noticed that the order thus entered departed literally from that of the 21st day of July, but we assume that the second was intended to be substantially the same as the earlier one, and to have effect both to allow the proof and to establish its priority. Derby as trustee, thereupon appealed, and his appeal is the subject-matter of 'Derby, Trustee, v. County Worcester.' The grounds of his appeal are two: First that the district court erred in allowing the proof; and, second, that it erred in allowing it as a debt entitled to priority.

The order of July 21st was entered during the term of the district court which commenced on the fourth Tuesday of June, 1899, and the petition for rehearing was filed at the same term. The order granting the rehearing, however, was entered at the term commencing on the second Tuesday of September, 1899. Inasmuch as the petition was filed during the June term, and was not stricken out, but was heard and its merits acted on at the September term, it must be accepted that the petition was filed at the June term with the consent of the court, and that the court thus held its control over the proceeding. In Andrews v. Thum, 12 C.C.A. 77, 64 F. 149, decided by this court, the facts were as follows: A petition, which we held to be, in substance, a petition for a rehearing, was seasonably filed in an equity cause at the October term of the circuit court for the district of Massachusetts. There was nothing in the case to show that the petition was brought to the attention of that court until the succeeding May term, when it heard it on its merits and denied it. We held that the proceeding was effective, and that the time for appeal did not begin to run until the petition was denied. This decision was cited, without disapproval, in Kingman & Co. v. Western Mfg. Co., 170 U.S. 675, 679, 18 Sup.Ct. 786, 42 L.Ed. 1192. We relied on Smelting Co. v. Billings, 150 U.S. 31, 14 Sup.Ct. 4, 37 L.Ed. 986, an examination of which will show that it fully supports the proposition we now make. Thus, it appears thoroughly settled by authority that, under the circumstances, the district court retained its control over the proceedings, and granted a rehearing and entered a new decree, with the same effect as though the whole had occurred during the June term. During that term the court had, of course, entire control over the decree entered on July 21st, and might at any time vacate it and enter a new decree. It is of no consequence whether the petition was regarded by the district court as a petition for a rehearing or a review, as the power of the court in this particular is regardless of forms, and may be exercised even in a summary manner. A striking illustration of this is found in Bank of Commerce v. Tennessee, 163 U.S. 416, 16 Sup.Ct. 1113, 41 L.Ed. 211, where the court, after a mandate issued, recalled it and modified its judgment.

The district court therefore had power during the term at which the decree was entered to vacate it and enter a new decree, and retained this power over the case by permitting the filing of the petition for a rehearing, as we have already shown, so that the result is in all respects the same as though all the proceedings had occurred at the June term. Nevertheless, under the jurisdiction vested in the several circuit courts of appeals to superintend, in matters of law, the proceedings of the several courts of bankruptcy within their jurisdiction, the county filed its petition to revise the action of the district court in reopening its decree and entering a later one. This is the subject-matter of the case entitled 'County of Worcester, Petitioner,' which, for the reasons given, need not be further considered.

We will add that, in view of what we have said, we have no occasion to consider whether or not the organization of the district court, sitting in bankruptcy, is, by the statute, of a continuous nature, so that, according to the expressions in Sandusky v. Bank, 23 Wall. 289, 292, 293, 23 L.Ed. 155, and in Stickney v. Wilt, 23 Wall. 150, 164, 23 L.Ed. 50, its proceedings are not subject to the ordinary rule that rehearings must be asked for at the term which the judgment is entered, or to the other rule that bills of review for matters appearing on the face of the record must ordinarily be brought within the time limited by statute for taking appeals, as shown in Central Trust Co. v. Grant Locomotive Works, 135 U.S. 207, 227, 10 Sup.Ct. 736, 34 L.Ed. 97, and in Reed v. Stanley, 38 C.C.A. 331, 97 F. 521, decided by the circuit court of appeals for the Ninth circuit.

The subject-matter of the remaining case, 'Derby, Trustee, Petitioner,' is in all respects the same as the subject-matter of 'Derby, Trustee, Appellant, v. County of Worcester. ' The statute of bankruptcy (section 24b, 30 Stat. 553) establishes the jurisdiction of this court to superintend and revise in the following language:

'The several circuit courts of appeal shall have jurisdiction in equity, either interlocutory or final, to superintend and revise, in matter of law, the proceedings of the several inferior courts of bankruptcy within their jurisdiction.'

Section 25 of the same act (30 Stat. 553), providing for appeals, enacts that 'appeals, as in equity cases, may be taken in bankruptcy proceedings from the courts of bankruptcy to the circuit court of appeals * * * from a judgment allowing or rejecting a debt or claim of five hundred dollars or over. ' In Re Good (C.C.A.) 99 F. 389, the circuit court of appeals for the Eighth circuit determined that what is matter of appeal under section 25 is not matter for revision under section 24. This is undoubtedly correct; yet it appears that Derby, being doubtful whether his remedy was under section 24 or section 25, undertook to avail himself of both until the question of procedure was determined. The county urges on us that the two proceedings neutralize each other, or that one of them, at least, operates to annul the other. We see no necessity for a conclusion of this nature. It has never been held by the supreme court in any of the several cases where parties have been doubtful whether their remedy was by error or appeal, and have therefore taken both, that one of them nullified the other; but instances are reported where the court has heard both the writ of error and the appeal, acting on each by the dismissal of one, and giving a judgment on the merits of the other, according as the law requires. Improvement Co. v. Bradbury, 132 U.S. 509, 515, 10 Sup.Ct. 177, 33 L.Ed. 433. There is nothing in the fact that Derby instituted both of these proceedings which lays any equitable basis for this proposition of the county, because, in contemplation of law, no substantial injury was thereby done it.

In any view of the dates of proceedings, Derby's petition was seasonable. The original decree was entered, as we have already said, on July 21, 1899. The petition to review was filed in this court on December 7, 1899; that is, within six months. The stature fixes no time within which a petition of this nature must be filed, so that unless some time is fixed by rule, as was the case in Re Hien, 166 U.S. 432 17 Sup.Ct. 624, 41 L.Ed. 1066, or by following some analogous provision of statute, petitions of this character can be filed with reference to any proceeding in bankruptcy so long as the decree is executory, or the case has not been closed. The bankruptcy act of 1867 in like manner omitted any limitation on the exercise of the revisory power of the circuit court, so that, in this circuit a rule was entered on September 15, 1870, requiring that the petition should be filed within 15 days after the ruling, order, or decree appealed from. Inasmuch as there is no statutory limitation fixing the time for filing bills for review for matters arising on the face of the record, Central Trust Co. v. Grant Locomotive Works, already referred to, determined that the time must be limited to that given by statute for taking an appeal from the decree sought to be reviewed. After a careful consideration of the question, the circuit court of appeals for the Ninth circuit, in Reed v. Stanley, ubi supra, held that, on the same rule, the time within which a bill of review might be filed, since the act establishing the circuit court of...