Thompson v. Mauzy

• Decision Date: 04 November 1909
• Docket Number: 880.
• Citation: 174 F. 611
• Parties: THOMPSON et al. v. MAUZY.
• Court: U.S. Court of Appeals — Fourth Circuit

174 F. 611

THOMPSON et al. v. MAUZY.

No. 880.

United States Court of Appeals, Fourth Circuit.

November 4, 1909

C. O Strieby, for appellants.

Fred. O. Blue and B. H. Hiner, for appellee.

Before PRITCHARD, Circuit Judge, and KELLER and McDOWELL, District judges.

KELLER District Judge.

On February 3, 1906, the appellee filed his voluntary petition in bankruptcy, having theretofore, on December 3, 1904, made a general assignment to B. H. Hiner, trustee, for the benefit of his creditors, which general assignment is referred to in the schedule of assets attached to his petition.

On July 24, 1906, an order of discharge was granted to him; there having been no appearance entered on behalf of any creditor before the referee.

On June 7, 1907, the appellants presented their petition seeking a revocation of the order of discharge under the provisions of section 15, Bankr. Act 1898 (Act July 1, 1898, c. 541, 30 Stat. 550 (U.S. Comp. St. 1901, p. 3428)), which section reads as follows:

'The judge may, upon the application of parties in interest who have not been guilty of undue laches, filed at any time within one year after a discharge shall have been granted revoke it upon a trial if it shall be made to appear that it was obtained through the fraud of the bankrupt, and that the knowledge of the fraud has come to the petitioners since the granting of the discharge, and that the actual facts did not warrant the discharge.'

This petition and the answer of the bankrupt thereto were referred to George P. Sherley, one of the referees of the district, as a special master, to take the testimony and make report thereof to the court, and of his findings of fact, together with his recommendations in respect thereto.

Said special master made his report sustaining some of the allegations of fraud, and made recommendations concerning certain specific property claimed in the petition to be property of the bankrupt which had been fraudulently placed in the hands of others; but the special master made no recommendation relative to the revocation of the discharge, without which action no jurisdiction could vest in the court to do or perform any acts recommended in the report of the special master, in relation to the administration of the property alleged in the petition to be the property of the bankrupt's estate.

Upon exceptions by the bankrupt to the report of the special master, a trial was had before the judge of the District Court, upon all the evidence taken before the special master, and, for reasons assigned in a full and able written opinion, made a part of the record in this case, the judge entered an order, dated October 17, 1908, finding for the bankrupt upon the issues made by the petition and answer, and accordingly dismissed the petition for revocation of the discharge.

On November 18, 1908, the petitioners filed a petition for appeal to this court, together with an assignment of errors, and on the same day said appeal was allowed by the trial court.

The learned judge below based his action in refusing the revocation of this discharge upon the ground that the petitioning creditors failed to show themselves free from laches and knowledge of the facts prior to the granting of the discharge.

For reasons hereafter assigned, we do not and cannot pass upon the correctness of this finding; but we do not regard it as improper to point out that, inasmuch as the issues were tried without the intervention of a jury, the findings of the court as to the facts are entitled to great weight upon appeal.

However, the question arises at the threshold of this investigation: Under what provision of the bankruptcy act is this appeal before us?

The statutes which seem in any way applicable to this question are the following sections of the bankruptcy act:

'Sec. 24a. The Supreme Court of the United States, the Circuit Courts of Appeals of the United States, and the Supreme Courts of the territories, in vacation in chambers and during their respective terms, as now or as they may be hereafter held, are hereby invested with appellate jurisdiction of controversies arising in bankruptcy proceedings from the courts of bankruptcy from which they have appellate jurisdiction in other cases.

'Sec. 24b. The several Circuit Courts of Appeal shall have jurisdiction in equity, either interlocutory or final, to superintend and revise in matter of law the proceedings of the several inferior courts of bankruptcy within their jurisdiction. Such power shall be exercised on due notice and petition by any party aggrieved.'

'Sec. 25a. That appeals, as in equity cases, may be taken in bankruptcy proceedings from the courts of bankruptcy to the Circuit Court of Appeals of the United States, and to the Supreme Court of the territories, in the following cases, to wit, (1) from a judgment adjudging or refusing to adjudge the defendant a bankrupt; (2) from a judgment granting or denying a discharge; and (3) from a judgment allowing or rejecting a debt or claim of five hundred dollars or over. Such appeal shall be taken within ten days after the judgment appealed from has been rendered, and may be heard and determined by the appellate court in term or vacation as the case may be.'

While the Supreme Court of the United States has not, so far as we are aware, directly decided what proceeding, if any, is appropriate ...