Chatfield v. O'Dwyer

• Decision Date: 21 May 1900
• Docket Number: 1,249.
• Citation: 101 F. 797
• Parties: CHATFIELD et al. v. O'DWYER et al.
• Court: U.S. Court of Appeals — Eighth Circuit

101 F. 797

CHATFIELD et al. v. O'DWYER et al.

No. 1,249.

United States Court of Appeals, Eighth Circuit.

May 21, 1900

J. N Cook, T. E. Webber, W. F. Kirby, and J. M. Carter, for appellants.

R. B Williams and W. H. Arnold, for appellees.

Before CALDWELL, SANBORN, and THAYER, Circuit Judges.

THAYER Circuit Judge.

On January 14, 1899, the Little River Lumber Company was adjudged a bankrupt, and the first meeting of its creditors was appointed to be held on January 25, 1899. At the first meeting the bankrupt company submitted a list of its creditors, showing that it was indebted to O'Dwyer &amp Ahern, the appellees, in the sum of $7,949.74. At a later date the appellees filed proof of their claim in proper form. Thereafter the appellants, J. L. Chatfield and W. J. Buhrman interposed objections to the allowance of the claim of the appellees. The objections were sent to a referee for a hearing and determination, who thereafter filed a report recommending a disallowance of the appellees' demand for the amount which they claimed to be due. The case was then taken for review in the mode provided by the bankrupt act before the judge of the district court, sitting in bankruptcy, who reversed the action of the referee, and allowed the claim. 92 F. 585. From this latter order the objecting creditors, J. L. Chatfield and W. J. Buhrman, have appealed to this court, under the provisions of section 25 of the bankrupt act, approved July 1, 1898. No one else has united in the appeal. A motion has been filed to dismiss the appeal, and the question to be determined is whether the appeal to this court can be prosecuted by the appellants, or whether the appeal should have been prosecuted by the trustee of the bankrupt, as the representative of all of its creditors.

Section 8 of the bankrupt law of 1867 (now section 4980 of the Revised Statutes of the United States) allowed an assignee who was dissatisfied with the allowance of a claim against the bankrupt's estate to appeal from the decision of the district court by which the allowance was made to the circuit court for the same district; and it was well established under that act that a creditor could not appeal from the allowance of a claim against the bankrupt estate, because the right of appeal was given to the assignee, as the representative of creditors, and was not in terms conferred on creditors. In re Troy Woolen Co., 9 Blatchf. 191 24 Fed.Cas. 244; In re Joseph, 2 Woods, 390, 13 Fed.Cas. 1124; In re Place, 8 Blatchf. 302, 19 Fed.Cas. 790. There was some conflict of opinion whether under section 2 of the old bankrupt act (now section 4986 of the Revised Statutes) the action of the district court in allowing a claim could be reviewed by the circuit court on a petition for review, or whether such allowance could only be reviewed by appeal, under section 8 of the act. Judge Woods maintained the affirmative view in Re Joseph, supra, while Judge Woodruff maintained the negative in Re Troy Woolen Co., supra. But it was conceded by all the courts before whom the question arose that, when an appeal was taken from an allowance under section 8 of the old bankrupt law, it could only be prosecuted by the assignee. In the case at bar we are not concerned with the question whether a creditor who has objected to the allowance of a claim of another creditor in the district court may file a petition to have the action of the district court reviewed under paragraph 'b,' Sec. 24, of the present bankrupt act, since in the case in hand the appeal is prosecuted under section 25. This latter section, under which the appeal was taken, provides 'that appeals as in equity cases may be taken in bankruptcy proceedings from the courts of bankruptcy to the circuit courts of appeals of the United States * * * in the following cases * * * (3) from a judgment allowing or rejecting a debt or claim of five hundred dollars or over. ' It will be observed that it differs from section 8 of the old bankrupt law, in that it does not say by whom such appeal may be taken. Subdivision 'c' of section 25 does declare, however, that 'trustees shall not be required to give bond when they take appeals or sue out writs of error'; and in view of this clause, and in view of the fact that it is incorporated into section 25, it is fair to infer that congress intended that an appeal from a judgment of the district court, allowing or rejecting a debt or claim, to the circuit court of appeals, should be prosecuted by the trustee. Moreover, section 7 of the present bankrupt law makes it the duty of a bankrupt to 'examine the correctness of all proofs of claims filed against his estate,' and 'immediately inform his trustee of any attempt by his creditors or other persons to evade the provisions of this act,' and 'in case of any person having to his knowledge...