In re Advocate

• Decision Date: 04 February 1944
• Docket Number: No. 246.,246.
• Citation: 140 F.2d 783
• Parties: In re ADVOCATE et al.
• Court: U.S. Court of Appeals — Second Circuit

140 F.2d 783 (1944)

In re ADVOCATE et al.

No. 246.

Circuit Court of Appeals, Second Circuit.

February 4, 1944.

Martin B. Nadle, of New York City, for appellant Mandel.

Sale & Sale, of New York City, for appellant Advocate.

Julius J. Abeson, of New York City, for trustee, appellee.

Before SWAN, CLARK, and FRANK, Circuit Judges.

SWAN, Circuit Judge.

In April 1939 the appellants were adjudicated bankrupts, individually and as copartners trading as Frost Plumbing Supply Co. The appellee is the trustee in bankruptcy. On April 3, 1940 he began proceedings before the referee to require the bankrupts to turn over certain merchandise, books of account and money. Hearings upon the matter were terminated May 19, 1941; when it was finally submitted for decision does not appear. The referee's order directing the turn-over was made on March 8, 1943. On July 19, 1943 the bankrupt Mandel obtained from a district judge an order directed to the trustee to show cause why Mandel should not be allowed an extension of time to file a petition for review of the turn-over order. This motion was heard by Judge Inch upon affidavits and argument of counsel, and on August 24, 1943 an order was entered denying "the motion of Morris Mandel, one of the bankrupts herein, for an order extending his time to file a petition for review of referee's turn-over order dated March 8, 1943." In the recital of the order it appears that Mandel was represented by his attorney Mr. Nadle and "although the bankrupt Advocate is not a party to this motion," his attorney, Mr. Sale appeared and "at his request" was heard in support of the motion. Both bankrupts have appealed.

The trustee has moved for dismissal of the appeal in respect to the appellant Advocate. We think the motion must be granted. See In re Kane, 2 Cir., 48 F.2d 96, 97; In re Rose, 9 Cir., 86 F.2d 69. The motion was initiated by Mandel and the relief requested related only to a petition for review to be filed by him. Although Advocate's attorney was heard in support of the motion, the attorney was clearly informed both by Judge Inch's opinion and by the form of the order entered on August 24 that his participation was not regarded as making Advocate a party to the proceeding. It does not appear that Mr. Sale made application to resettle the form of the order. Nor can we see that the order as entered affects the rights of Advocate in any respect, except as a judicial precedent establishing that excuses such as Mandel offered for his delay in seeking to review the turn-over order were insufficient. Whether Advocate could show adequate excuses for his own delay was not decided. It is too elementary to require the citation of authorities that a person not a party to an action may not appeal from the judgment entered therein merely because it may establish a precedent adverse to a similar action which he may wish to bring. The appeal of Advocate is dismissed.

Section 39, sub. c, of the Bankruptcy Act, 11 U.S.C.A. § 67, sub. c, permits a person aggrieved by an order of a referee, "within ten days after the entry thereof, or within such extended time as the court may for cause shown allow," to file with the referee a petition for review of such order by a judge. Although the point was not raised below, the trustee now urges that the district judge was without jurisdiction to entertain Mandel's motion. The argument is based on the definition of "Court" in 11 U.S.C.A. § 1(9), the powers with which referees are invested by 11 U.S.C.A. § 66(6) and the provisions of Order 12 of the General Orders promulgated by the Supreme Court, 11 U.S.C.A. following section 53, to the effect that after a general reference "all the proceedings, except such as are required by the Act or by these general orders to be had before the judge, shall be had before the referee". We agree with the appellee that the preferable practice is to apply to the referee, to whom the case has been referred, for an extension of time in which to file a petition for review of an order made by him. Such an extension is to be allowed only "for cause shown". The referee being familiar with the proceedings is in a better position than a district judge to determine in the first instance whether the tardy applicant has a reasonable excuse for his failure to file the petition within the ten day period and whether there is any merit in the review he seeks. If the application is denied, the order of denial may be reviewed by petition and such method of review will bring up to the district judge, and to the appellate court in the event of appeal, a more adequate record than is likely to be made by a motion before the judge on affidavits. This is well illustrated by the present skimpy record which does not even contain a copy of the turnover order nor any findings of fact made by the referee. We cannot, however, accept the appellee's contention that the court lacked jurisdiction to entertain the motion. General Order No. 12 does not deprive a district judge of jurisdiction to hear an application in bankruptcy proceedings which have been referred generally to a referee, Petition of Baxter, 6 Cir., 269 F. 344, 347, certiorari denied 256 U.S. 694, 41 S.Ct. 535, 65 L.Ed. 1175; Warren v. Security-First Nat. Bank, 9 Cir., 121 F.2d 822, 826; Collier on Bankruptcy (14th ed.), § 22.05. In several cases motions for extensions of time have been made to the judge and entertained without question as to his power. In re Albert, 2 Cir., 122 F.2d 393; Thummess v. Von Hoffman, 3 Cir., 109 F.2d 291; In re Ragozinno, D.C. N.Y., 37 F.Supp. 524; In re Albert, D.C. N.Y., 40 F.Supp. 980. Such a motion may be made either before the judge or before the referee, but for reasons already stated we regard as the better practice making it before the referee. The dictum in the case of In re Amsterdam Brewing Co., D.C. N.Y., 35 F.Supp. 618, 619, to the effect that the referee would have no power to extend the time is disapproved.

The motion was denied on the ground that the bankrupt's delay in seeking to...