In re De Tamble, 5963.

• Decision Date: 17 February 1937
• Docket Number: No. 5963.,5963.
• Parties: In re DE TAMBLE. DE TAMBLE v. NEW YORK LIFE INS. CO.
• Court: U.S. Court of Appeals — Seventh Circuit

88 F.2d 893 (1937)

In re DE TAMBLE DE TAMBLE v. NEW YORK LIFE INS. CO.

No. 5963.

Circuit Court of Appeals, Seventh Circuit.

February 17, 1937.

J. Kentner Elliott, of Chicago, Ill. (Edward T. Heineman, of Chicago, Ill., of counsel), for appellant.

William N. Marshall and Willis C. Webb, both of Chicago, Ill., for appellee.

Before EVANS and SPARKS, Circuit Judges, and BRIGGLE, District Judge.

SPARKS, Circuit Judge.

This is an appeal from an order of the District Court directing its clerk to pay the sum of $1,323.29 to appellee from funds deposited with its clerk.

The facts are undisputed. Appellant had filed his petition for extension of time in which to pay his debts, pursuant to section 74 of the Bankruptcy Act, as amended (11 U.S.C.A. § 202). Appellee was a secured creditor whose claim was sought to be affected by the proceedings. It was the owner and holder of a trust deed in the nature of a first mortgage encumbering the real estate involved, and was the owner and holder of the unpaid notes and indebtedness secured by that trust deed, all of which was due and owing in excess of $48,000. The trust deed conveyed the real estate and the rents, issues and profits thereof as security for the payment of the debt.

On September 6, 1935, following the filing of appellant's petition, the District Court appointed a custodian to operate, manage and control the real estate involved, and to collect the rents, issues and profits and deposit them with its clerk until the further order of that court.

On March 17, 1936, the court dismissed appellant's petition on the ground that the money or security necessary to pay all debts having unwaived priority, and the costs of the proceedings, had not been deposited as required by section 74(e), as amended (11 U.S.C.A. § 202(e).

The custodian at the time of his appointment took possession of the property and retained it until the petition was dismissed, performing all the duties as set forth in the order of appointment, and as a result thereof had collected and deposited with the clerk the sum of $1,591.83.

No foreclosure proceedings had been instituted prior to the dismissal of appellant's petition, and prior to the appointment of the custodian, appellant was at all times in actual and undisturbed possession of the property involved.

On May 26, 1936, appellee filed its petition requesting the court to apply the deposited funds on the account of appellee's mortgage indebtedness, and for such further and different relief as to the court might seem just and proper. This petition was granted and the court ordered the payment which is now in question.

It is first contended by appellant that the District Court lacked jurisdiction to make the order appealed from. He bases this contention upon the fact that the court failed to expressly reserve jurisdiction of the deposits when it dismissed appellant's petition. We think there is no merit in this contention. The proceeding was in equity, and the court had jurisdiction of the rents, issues and profits of the property involved, and was authorized to impound them through the services of its custodian and clerk. That which it rightfully received it might rightfully disburse, and jurisdiction of the fund could not be destroyed until disbursement was accomplished.

Appellant's answer to appellee's petition alleged that the deposits were his own personal property. If that were true he was entitled to...