In re Breyer Printing Co.

• Decision Date: 12 August 1914
• Docket Number: 2084.
• Parties: In re BREYER PRINTING CO. v. CENTRAL TRUST CO. OF ILLINOIS. BORLAND
• Court: U.S. Court of Appeals — Seventh Circuit

216 F. 878

In re BREYER PRINTING CO.

BORLAND v. CENTRAL TRUST CO. OF ILLINOIS.

No. 2084.

United States Court of Appeals, Seventh Circuit.

August 12, 1914

Allen G. Mills, of Chicago, Ill., for petitioner.

Alvin H. Culver, of Chicago, Ill., for respondent.

Before BAKER, SEAMAN, and MACK, Circuit Judges.

BAKER Circuit Judge.

Respondent has interposed a motion to dismiss this petition to review and revise on the ground that the subject-matter is not within our jurisdiction under section 24b. Facts disclosed in the petition are these: On December 26, 1912, the Breyer Printing Company was adjudicated a bankrupt upon a petition of creditors filed on December 24, 1912, and the Central Trust Company was appointed receiver and afterwards was duly elected trustee. Petitioner leased certain premises to the Breyer Printing Company on May 1, 1910, and claims that on December 1, 1912, there was rent due and unpaid to the extent of $1,666. On December 9, 1912, petitioner caused a distress warrant for that sum to be levied on certain chattels. From December 9 to December 27, 1912, these chattels were in the actual possession of petitioner under and by virtue of the distress warrant. On December 27, 1912, petitioner and the Central Trust Company entered into an agreement whereby the chattels were placed in the possession of the Central Trust Company subject to the lien and right of possession of petitioner, with the further stipulation that petitioner's right should attach to the proceeds if the chattels should be sold before petitioner's right was adjudicated. On January 10, 1913 petitioner filed in the District Court in bankruptcy his petition, in which he set out the foregoing facts respecting the lease, the seizure of chattels under the distress warrant, his possession thereunder, and his transfer of possession to the Central Trust Company under the recited agreement. The chattels in question were sold by the Central Trust Company for a sum in excess of the rent and costs due petitioner under the distress warrant. The prayer of the petition to the District Court was that the Central Trust Company as receiver and trustee should therefore be directed to pay to the petitioner the amount of her claim for rent and costs. The Central Trust Company answered the petition in the bankruptcy court by neither admitting nor denying the averments of the petition, and by affirmatively claiming title and right of possession in and to the distrained chattels superior to the right of petitioner; and the referee's order rejecting petitioner's asserted lien and finding title and right of possession in the trustee was confirmed by the District Judge.

Sections 23, 24, and 25 of the Bankruptcy Act draw a clear line of demarcation between 'proceedings in bankruptcy' and 'controversies at law and in equity arising in bankruptcy proceedings. ' 'Proceedings in bankruptcy' cover questions between the alleged bankrupt or the receiver or trustee of the bankrupt estate, on the one hand, and the general creditors, as such, on the other, commencing with the petition for adjudication, ending with the discharge, and including matters of administration generally, such as appointment of receivers and trustees, as well as examinations, exemptions, allowance and disallowance of claims, and the like, all of which naturally occur in the settlement of the estate. 'Controversies at law and in equity arising in the course of bankruptcy proceedings' involve questions between the receiver or trustee representing the bankrupt and his general creditors, as such on the one hand, and adverse claimants on the other concerning property in the possession of the receiver or trustee or of the claimants, to be litigated in appropriate plenary suits, and not affecting directly administrative orders and judgments, but only the extent of the estate to be distributed ultimately among general creditors. Matter of Loving, 224 U.S. 183, 32 Sup.Ct. 446, 56 L.Ed. 725; United States Fidelity Co. v. Bray, 225 U.S. 205, 217, 32 Sup.Ct. 620, 56 L.Ed. 1055; In re Mueller, 135 F. 711, 68 C.C.A. 349; In re Friend, 134 F. 778, 67 C.C.A. 500.

Did the landlord's petition in the bankruptcy court institute a 'proceeding in bankruptcy' of an administrative character, or did it present a 'controversy arising in the course of bankruptcy proceedings' in the nature of a suit in equity? If of the former class, our jurisdiction to review would attach under section 24b or 25a as might be appropriate to the particular proceeding in bankruptcy. If of the latter class, our jurisdiction could be invoked only under section 24a. For a defeated party is not at liberty to disregard the appropriate appellate remedy provided for his case and choose some other that may better suit his inclination or convenience. Matter of Loving, 224 U.S. 187, 32 Sup.Ct. 446, 56 L.Ed. 725; United States v. Beatty, 232 U.S. 463, 34 Sup.Ct. 392, 58 L.Ed. 686; In re Friend, 134 F. 778, 780, 67 C.C.A. 500. And this remains true although the appellate court may allow a writ of error which is addressed to questions of law involved in a 'proceeding in bankruptcy' to stand as a petition to review and revise, since both are ranged on the same side of the demarcating line and the methods are substantially alike....