In re Eppstein

• Decision Date: 02 September 1907
• Docket Number: 62.
• Citation: 156 F. 42
• Parties: In re EPPSTEIN.
• Court: U.S. Court of Appeals — Eighth Circuit

156 F. 42

In re EPPSTEIN.

No. 62.

United States Court of Appeals, Eighth Circuit.

September 2, 1907

Syllabus by the Court

A court of bankruptcy may by summary process require those who assert title to, or an interest in, property which has rightfully come into its possession and control as part of the bankrupt's estate, to present their claims to that court and, the notice being reasonable, may proceed to adjudicate the merits of such claims.

While property in the course of administration under the bankruptcy act is not exempted from taxation, or freed from tax liens or claims theretofore fastened upon it, it is nevertheless in custodia legis, and a preexisting tax lien or claim cannot be converted into a full title by the procurement of a tax deed without the court's sanction.

Ernest Morris, Alfred Muller, and M. Summerfield, for petitioner.

E. W Hurlbut, for respondent.

Before SANBORN and VAN DEVANTER, Circuit Judges, and PHILIPS District judge.

VAN DEVANTER, Circuit Judge.

The Colorado Carlsbad Water Company, a corporation existing under the laws of Colordo, was adjudged a bankrupt upon the petition of creditors. Before the petition was filed certain real property of the bankrupt had been sold for taxes, but the title, the right of possession, and the actual possession remained with the bankrupt, and these passed to the trustee upon his qualification. After the lapse of the three years designated in the redemption statute, and while the property was yet in the custody and control of the court of bankruptcy as part of the bankrupt's estate, the holder of the tax sale certificate, without the leave of that court, applied to the county treasurer and obtained a tax deed purporting to invest him with all the right, title, and interest of the bankrupt as the former owner. Thereafter the trustee, learning of the sale and deed, tendered to the claimant thereunder the amount for which the property had been sold, with statutory interest, penalties, and costs, and demanded a surrender of the tax title. The tender and request were refused, and, upon the trustee's petition, the claimant was ordered to show cause why the deed should not be set aside. He appeared and objected that his right could not be adjudicated in a summary proceeding, whereupon the objection was sustained and the petition dismissed. A petition for revision brings the matter here.

The question of jurisdiction is not free from doubt, but we are of opinion that the result of the cases is that a court of bankruptcy may by summary process require those who assert title to, or an interest in, property which has rightfully come into its possession and control as part of the bankrupt's estate, to present their claims to that court, and, the notice being reasonable, may proceed to adjudicate the merits of such claims. In re Kellogg, 121 F. 333, 57 C.C.A. 547; In re Rochford, 124 F. 182, 59 C.C.A. 388.

The question of the merits must also, upon authority, be ruled in favor of the trustee. Wiswall v. Sampson, 14 How 52, 14 L.Ed. 322; Taylor v. Carryl, 20 How. 583, 15 L.Ed. 1028; Barton v. Barbour, 104 U.S. 126, 26 L.Ed. 672; In re Tyler, 149 U.S. 164, 13 Sup.Ct. 785, 37 L.Ed. 689; Ledoux v. La Bee (C.C.) 83 F. 761; Clark v. McGhee, 87 F. 789, 31 C.C.A. 321; Virginia, etc., Co v....