In re Herdic

W.D. Pennsylvania

In re Herdic

40 F. 360, 1889 U.S. Dist. LEXIS 189

DecidedOctober 26, 1889

StatusPublished

This text of 40 F. 360 (In re Herdic) is published on Counsel Stack Legal Research, covering District Court, W.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

In re Herdic, 40 F. 360, 1889 U.S. Dist. LEXIS 189 (W.D. Pa. 1889).

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Opinion

Acheson, J.

The answer of James P. Herdic, administrator of the estate of Peter'Herdic, deceased, to the rule to show cause, etc., raises a question of jurisdiction which was not discussed much, if at all, at the hearing, the arguments of counsel being directed to other questions of law, and to the merits of the controversy, but in the course of my investigation the question of jurisdiction has assumed a controlling importance. The facts upon which it arises are these: Peter Herdic, the bankrupt, was granted a discharge on February 18,1880. On July 28,1883, upon the petition of his assignees in bankruptcy, an order was made for the sale at public auction of the claim of the bankrupt’s estate against John G. Reading. After due public notice such sale took place, and Frank L. Herdic became the purchaser, for the price of $3,000. By an order of court made September 12, 1883, the sale was confirmed; and soon thereafter the purchase money was distributed among the creditors of the bankrupt, the Metropolitan National Bank, the present petitioner, receiving its pro rata share. Thus the matter rested until May 1, 1888 Peter Herdic having died in the mean time. On the date last mentioned said bank presented its petition, setting forth that the said purchase by Frank L. Herdic was made in trust for Peter Herdic, and that, for reasons set out, it was a concealed fraud upon the bankrupt’s creditors, and praying that James P. Herdic, administrator of Peter Herdic, deceased, be required to show cause why the said purchase should not be declared fraudulent, and the sale set aside; and, accordingly, on July 20, 1888, a rule'to show cause was granted upon the administrator.

Can the court, sitting in bankruptcy, at this late day, upon a mere [361]*361rule on the administrator, proceed in a summary way to rescind its order of confirmation of September 12,1888, and set aside said sale? This question I am constrained to answer in the negative. According to the general rule, the lapse of time here, of itself, would debar summary relief, and require a resort to a plenary suit. Bronson v. Schulten, 104 U. S. 410; Phillips v. Negley, 117 U. S. 665, 6 Sup. Ct. Rep. 901. Even where a decree in equity is obtained by fraud, the appropriate remedy, after the expiration of the term, is by a bill of review. Terry v. Bank, 92 U. S. 454. If it be conceded that a bankrupt court has power to alter or amend its records until the proceeding is formally endecl, still, it by no moans follows that, for matters dehors the record, the court may summarily vacate a sales regular on its face, years after final confirmation and the distribution ol the proceeds. Again, Peter Herdic was free to purchase at the assignee’s sale, (Traer v. Clews, 115 U. S. 528, 6 Sup. Ct. Rep. 155;) and he took tho same title that an entire stranger purchasing would have taken. That title has become vested in James P. Herdic, the administrator of the estate of Peter Herdic. The administrator is not a party to the proceedings in bankruptcy, and, therefore, his title cannot be adjudicated by the bankrupt court upon a rule to show cause. Smith v. Mason, 14 Wall. 419; Marshall v. Knox, 16 Wall. 551. If his title is impeachable for the cause alleged, the remedy is by a plenary suit. Id. This is not a question of convenient practice. Tho interests here involved are very large, — of such value as to bring the controversy within the appellate jurisdiction of the supreme court. Rut, under this proceeding, the administrator, in the event of a result adverse to him, would be deprived of his right of appeal to that tribunal. Stickney v. Wilt, 23 Wall. 150; Nimick v. Coleman, 95 U. S. 266. It is worthy of remark that in each of the two casos (Clark v. Clark, 17 How. 315, and Phelps v. McDonald, 99 U. S. 298) here cited to sustain the impeachment of the sale to Frank. L. Herdic the complainant proceeded by an original bill in equity; and this, in my judgment, is the proper mode of procedure in the present case. Rule to show cause discharged, without prejudice to the petitioner’s right to proceed by a plenary suit.

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Acheson, J.

The answer of James P. Herdic, administrator of the estate of Peter'Herdic, deceased, to the rule to show cause, etc., raises a question of jurisdiction which was not discussed much, if at all, at the hearing, the arguments of counsel being directed to other questions of law, and to the merits of the controversy, but in the course of my investigation the question of jurisdiction has assumed a controlling importance. The facts upon which it arises are these: Peter Herdic, the bankrupt, was granted a discharge on February 18,1880. On July 28,1883, upon the petition of his assignees in bankruptcy, an order was made for the sale at public auction of the claim of the bankrupt’s estate against John G. Reading. After due public notice such sale took place, and Frank L. Herdic became the purchaser, for the price of $3,000. By an order of court made September 12, 1883, the sale was confirmed; and soon thereafter the purchase money was distributed among the creditors of the bankrupt, the Metropolitan National Bank, the present petitioner, receiving its pro rata share. Thus the matter rested until May 1, 1888 Peter Herdic having died in the mean time. On the date last mentioned said bank presented its petition, setting forth that the said purchase by Frank L. Herdic was made in trust for Peter Herdic, and that, for reasons set out, it was a concealed fraud upon the bankrupt’s creditors, and praying that James P. Herdic, administrator of Peter Herdic, deceased, be required to show cause why the said purchase should not be declared fraudulent, and the sale set aside; and, accordingly, on July 20, 1888, a rule'to show cause was granted upon the administrator.

Can the court, sitting in bankruptcy, at this late day, upon a mere [361]*361rule on the administrator, proceed in a summary way to rescind its order of confirmation of September 12,1888, and set aside said sale? This question I am constrained to answer in the negative. According to the general rule, the lapse of time here, of itself, would debar summary relief, and require a resort to a plenary suit. Bronson v. Schulten, 104 U. S. 410; Phillips v. Negley, 117 U. S. 665, 6 Sup. Ct. Rep. 901. Even where a decree in equity is obtained by fraud, the appropriate remedy, after the expiration of the term, is by a bill of review. Terry v. Bank, 92 U. S. 454. If it be conceded that a bankrupt court has power to alter or amend its records until the proceeding is formally endecl, still, it by no moans follows that, for matters dehors the record, the court may summarily vacate a sales regular on its face, years after final confirmation and the distribution ol the proceeds. Again, Peter Herdic was free to purchase at the assignee’s sale, (Traer v. Clews, 115 U. S. 528, 6 Sup. Ct. Rep. 155;) and he took tho same title that an entire stranger purchasing would have taken. That title has become vested in James P. Herdic, the administrator of the estate of Peter Herdic. The administrator is not a party to the proceedings in bankruptcy, and, therefore, his title cannot be adjudicated by the bankrupt court upon a rule to show cause. Smith v. Mason, 14 Wall. 419; Marshall v. Knox, 16 Wall. 551. If his title is impeachable for the cause alleged, the remedy is by a plenary suit. Id. This is not a question of convenient practice. Tho interests here involved are very large, — of such value as to bring the controversy within the appellate jurisdiction of the supreme court. Rut, under this proceeding, the administrator, in the event of a result adverse to him, would be deprived of his right of appeal to that tribunal. Stickney v. Wilt, 23 Wall. 150; Nimick v. Coleman, 95 U. S. 266. It is worthy of remark that in each of the two casos (Clark v. Clark, 17 How. 315, and Phelps v. McDonald, 99 U. S. 298) here cited to sustain the impeachment of the sale to Frank. L. Herdic the complainant proceeded by an original bill in equity; and this, in my judgment, is the proper mode of procedure in the present case. Rule to show cause discharged, without prejudice to the petitioner’s right to proceed by a plenary suit.

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40 F. 360, 1889 U.S. Dist. LEXIS 189, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-herdic-pawd-1889.

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