In re Lyons Beet Sugar Refining Co.

• Decision Date: 12 December 1911
• Citation: 192 F. 445
• Parties: In re LYONS BEET SUGAR REFINING CO.
• Court: U.S. District Court — Western District of New York

192 F. 445

In re LYONS BEET SUGAR REFINING CO.

United States District Court, W.D. New York.

December 12, 1911

Charles P. Williams, for claimant.

William S. O'Brien, for trustee.

HAZEL District Judge.

I do not agree with the referee in his disallowance of the claim of William H. Egan in question. The undisputed facts are that the bankrupt was adjudicated on June 21, 1910, and the disallowed claim was filed with the referee on September 13 1911, more than one year subsequent to the adjudication. At the time the petition in bankruptcy was filed there was pending a suit against the bankrupt in the Supreme Court of the state, and a judgment had been affirmed by the Appellate Division, from which an appeal was taken by the bankrupt to the Court of Appeals; the claimant becoming surety for costs on the appeal bond. The decision of the Appellate Division was affirmed, and thereupon the surety filed a claim for the costs against the bankrupt estate, which he had paid as surety on the bond.

The trustee objected to proving the claim, on the grounds (1) that it was not filed within one year after the adjudication as required by section 57n; and (2) that it was not 'a fixed liability absolutely owing,' under section 63a. The referee was of the opinion that the claim was not liquidated by litigation, and therefore it could not be proved under section 57n. Taking into consideration section 63, subd. 1 of the bankruptcy act, in connection with subdivison 4, I think that the claim was provable as one founded 'upon contract express or implied,' and the lang owing,' does not limit the broad term of subdivision 4. In re Smith (D.C.) 146 F. 923, 17 Am.Bankr.Rep. 112; In re Gerson, 107 F. 897, 47 C.C.A. 49, 6 Am.Bankr.Rep. 11; In re Overman, 109 F. 65, 48 C.C.A. 223, 54 L.R.A 369, 6 Am.Bankr.Rep. 324.

The trustee claims that there is a marked distinction between liabilities created by indorsement of a promissory note not due at the time of filing the petition and such as arise on a surety bond. But the facts of the Gerson Case, upon which reliance is placed, are quite analogous to the one here, and the same principle controls. True, it was a contingent liability; but, nevertheless, it was a fixed liability at the time the petition was filed. In my opinion the claim must be deemed to have been liquidated by the litigation, as the text has it, in that the liability became enforceable only by the finalities of the...