Broders v. Lage

• Decision Date: 01 March 1928
• Docket Number: No. 7895.,7895.
• Citation: 25 F.2d 288
• Parties: BRODERS v. LAGE.
• Court: U.S. Court of Appeals — Eighth Circuit

25 F.2d 288 (1928)

BRODERS v. LAGE.

No. 7895.

Circuit Court of Appeals, Eighth Circuit.

March 1, 1928.

Maurice F. Donegan, of Davenport, Iowa (C. O. Boling, of Tipton, Iowa, on the brief), for appellant.

C. J. Lynch, of Cedar Rapids, Iowa (Johnson, Donnelly & Lynch, of Cedar Rapids, Iowa, on the brief), for appellee.

Before STONE and VAN VALKENBURGH, Circuit Judges, and PHILLIPS, District Judge.

PHILLIPS, District Judge.

This is an appeal from an order in a proceeding in bankruptcy sustaining a demurrer to the specifications of objections filed by Broders, the trustee and a creditor, to the application of the bankrupt for an order of discharge.

The phrase "proceeding in bankruptcy" includes questions arising between the alleged bankrupt and his creditors, commencing with the petition for adjudication, and ending with the discharge, and also includes the intermediate administrative steps, such as the election of trustee, allowance of claims, fixing of priorities, and proceedings relating to exemptions, sales, allowances, and other like matters, which courts of bankruptcy dispose of in a summary way. Taylor v. Voss, 271 U. S. 176, 181, 46 S. Ct. 461, 70 L. Ed. 889; In re Friend (C. C. A. 7) 134 F. 778; Thompson v. Mauzy (C. C. A. 4) 174 F. 611; Thomas v. Woods (C. C. A. 8) 173 F. 585, 588, 26 L. R. A. (N. S.) 1180, 19 Ann. Cas. 1080.

The order appealed from, therefore, was entered in a proceeding in bankruptcy. It was not a judgment granting or denying a discharge, and it is therefore reviewable by an appeal under section 24b (11 USCA § 47) and not under section 25, of the Bankruptcy Act (11 USCA § 48). Lindeke v. Converse (C. C. A. 8) 198 F. 618, 622, 623. In the case last cited, certain creditors of Julia D. Converse, the bankrupt, filed a motion to dismiss her application for discharge for want of prosecution. The trial court denied the motion, and the objecting creditors brought the question before the Circuit Court of Appeals by petition to revise. The court, in the opinion, said:

"The motion of the creditors was in reality an application to the court below to refuse the bankrupt a discharge on account of her lack of prosecution of her application for it. If that court had granted the motion, it would thereby have finally denied her application for her discharge. * * * The question to be decided was a question of law, reviewable by appeal under section 25a of the Bankruptcy Law if decided against the bankrupt and by petition to revise under section 24b of that law if decided against the creditors."

Subsections (b) and (c) of section 24 of the Bankruptcy Act, as amended by the Act of May 27, 1926, 44 Stats. 664, USCA tit. 11, § 47, reads as follows:

"(b) The several Circuit Courts of Appeal and the Court of Appeals of the District of Columbia 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. Such power shall be exercised by appeal and in the form and manner of an appeal, except in the cases mentioned in said section 25 to be allowed in the discretion of the appellate court.

"(c) All appeals under this section shall be taken within thirty days after the judgment, or order, or other matter complained of, has been rendered or entered."

The clause, "to be allowed in the discretion of the appellate court," applies to appeals under section 24b, and not to appeals under section 25. Rutherford v. Elliott (C. C. A.) 18 F.(2d) 956.

The order sustaining this demurrer was entered by the trial court April 12, 1927. On May 10, 1927, the trustee filed in the court below his petition for an appeal from such order. On May 12, 1927, the trial judge entered an order granting such appeal. The transcript was not filed in the office of the clerk of this court until July 8, 1927, and no application for the allowance of an appeal from the order complained of has ever been made to this court, and no such appeal has been allowed by this court.

It will be observed that section 24b provides for a review by appeal of all orders, both interlocutory and final, entered in proceedings in bankruptcy. The absolute right to prosecute such an appeal would open the door to innumerable appeals from summary orders entered in bankruptcy proceedings which might greatly impede the due and proper administration of the estates of bankrupts. We think Congress sensed this danger, and for that reason wrote into the act the language "by appeal * * * to be allowed...