In re Kahn

121 F. 412, 1902 U.S. Dist. LEXIS 11

• Court: District Court, S.D. New York
• Decided: September 24, 1902
• Status: Published

Opinion

ADAMS, District Judge.

The following questions are certified to me for my opinion:

“Are secured creditors, who hold mortgages on land; formerly owned by the bankrupt, and for the payment of which mortgages the bankrupt has executed his bond or has in the purchase of such real property, assumed the payment of existing mortgages, and where no present liability has arisen, which debts, if any, are purely contingent and subject solely to the contingency of a de-' ficiency arising in case the mortgaged premises shall be sold under foreclosure of such mortgages, and whose contingent debts, if any, are therefore not provable in bankruptcy, and the value of whose securities is not capable of present determination, necessary or proper parties to composition proceedings instituted by the bankrupt with his creditors? And should such a composition, if it be determined that the same is for the best interest of all creditors, having provable claims against the bankrupt estate, be refused the approval of the court, because such secured mortgage creditors are not made parties to the composition proceedings or refused voluntarily to become parties thereto.”

I am satisfied that the referee has correctly answered the questions in his careful opinion and I adopt it in deciding that the secured creditors mentioned are not necessary or proper parties to this composition proceeding, and that'it should not be refused approval because they are not parties; but as I have not heard them, or other parties than those who appeared before me and desired the confirmation of the referee’s report, this decision is made without prejudice to the rights of such creditors as have not been given proper notice of the submission of. the matter to me nor waived the same nor appeared herein.