UNITED KINGDOM MUTUAL STEAMSHIP ASSUR. ASS'N v. Liman

• Decision Date: 28 October 1969
• Docket Number: No. 376,Docket 33652.,376
• Citation: 418 F.2d 9
• Parties: UNITED KINGDOM MUTUAL STEAMSHIP ASSURANCE ASSOCIATION, v. Arthur L. LIMAN, Trustee in Bankruptcy. In the Matter of Seatrade Corporation, Kulukundis Maritime Industries, Inc., Tramp Shipping & Oil Transportation Co., A. H. Bull Steamship Co., A. H. Bull & Co. (Inc.) American Tramp Shipping Development Corporation, Messenian Shipping Corporation, Star Line Agency, Inc., Bankrupts.
• Court: U.S. Court of Appeals — Second Circuit

418 F.2d 9 (1969)

UNITED KINGDOM MUTUAL STEAMSHIP ASSURANCE ASSOCIATION, v. Arthur L. LIMAN, Trustee in Bankruptcy In the Matter of Seatrade Corporation, Kulukundis Maritime Industries, Inc., Tramp Shipping & Oil Transportation Co., A. H. Bull Steamship Co., A. H. Bull & Co. (Inc.) American Tramp Shipping Development Corporation, Messenian Shipping Corporation, Star Line Agency, Inc., Bankrupts.

No. 376, Docket 33652.

United States Court of Appeals Second Circuit.

Submitted September 8, 1969.

Decided October 28, 1969.

Marshall P. Keating (Kirlin, Campbell & Keating), New York City, for appellant.

Ambrose Doskow (Rosenman, Colin, Kaye, Petschek, Freund & Emil), New York City, for appellee.

Before LUMBARD, Chief Judge, and SMITH and FEINBERG, Circuit Judges.

J. JOSEPH SMITH, Circuit Judge.

This is a motion to dismiss the appeal by an insurer from an order by the United States District Court for the Southern District of New York, David N. Edelstein, Judge, denying review of an order of the referee in bankruptcy upholding summary jurisdiction in the bankruptcy court over the claim of the trustee to be indemnified by the insurer for moneys paid on personal injury claims. The insurer in this case, United Kingdom Mutual Steamship Assurance Association ("United Kingdom"), is a creditor of the bankrupt and has filed a claim against the estate; thereupon the referee determined that he had summary jurisdiction over this claim for indemnity by the trustee. There was no order in regard to the merits of the claim, merely that there was summary jurisdiction. We hold that the order was interlocutory, that it was made in a controversy arising in proceedings in bankruptcy and was therefore not appealable at this stage, and grant the motion to dismiss the appeal.

The applicable portion of the Bankruptcy Act, § 24(a), 11 U.S.C. § 47(a) provides:

"The United States courts of appeals * * * are invested with appellate jurisdiction from the several courts of bankruptcy in their respective jurisdictions in proceedings in bankruptcy, either interlocutory or final, and in controversies arising in proceedings in bankruptcy, to review, affirm, revise, or reverse, both in matters of law and in matters of fact * * *."

The distinction between "controversies" and "proceedings" from which it must be determined whether an interlocutory order may be the subject of appeal, has often been characterized as being hairline thin and the classification depends upon an analysis of each case. In re Imperial "400" National, Inc., 391 F.2d 163 (3d Cir. 1968) (order reopening ruling by referee on reclamation claims out of time, appealable); Columbia Foundry Co. v. Lochner, 179 F.2d 630, 14 A.L.R.2d 1349 (4th Cir. 1950) (claim for goods sold and delivered, counterclaim for damages for defect in goods, appealable); In re Greenstreet, Inc., 209 F.2d 660 (7th Cir. 1954) (claim and counterclaim on performance of contract, appealable). "Proceedings" are generally described as those matters of an administrative character, including questions between the bankrupt and his creditors which are presented in the ordinary course of the administration of the bankrupt's estate. Taylor v. Voss, 271 U.S. 176, 46 S.Ct. 461, 70 L.Ed. 889 (1926); Hillcrest Lumber Co., Inc. v. Terminal Factors, Inc., 281 F.2d 323 (2d Cir. 1960); In re National Finance & Mortgage Corp., 96 F.2d 74 (9th Cir. 1938). "Controversies" are usually described as arising in the course of the bankruptcy proceeding and not being mere steps in the ordinary administration of the bankrupt, but which present distinct and separable issues between the trustee and adverse claimants concerning the right and title to the bankrupt's estate. Taylor v. Voss, supra; Hillcrest Lumber Co., Inc. v. Terminal Factors, Inc., supra.

A dispute between the debtor and an adverse claimant over property which is within the summary jurisdiction of the bankruptcy court has been held a controversy. Hillcrest Lumber Co., Inc. v. Terminal Factors, Inc., supra. Similarly, it has been held that interlocutory orders in reclamation proceedings are not appealable since such a proceeding is a controversy, In re Brendan Reilly Associates, Inc., 372 F.2d 235 (2d Cir. 1967) and that proceedings concerning disputes as to the title of property in a dispute between the trustee and an adverse claimant over the right to possession of property is a controversy. In re Brendan Reilly Associates, Inc., 378 F.2d 30 (2d Cir. 1967); Harrison v. Chamberlin, 271 U.S. 191, 46 S.Ct. 467, 70 L.Ed. 897 (1926). In other words, the normal turnover or reclamation order concerns title to specific property and thus...