In re Reynolds

243 F. 272, 1917 U.S. Dist. LEXIS 1123

Opinion

RAY, District Judge

(after stating the facts as above). The trustee under the will of Matthew FI. Bender is now holding this sum of money, conceded to have been earned and in his hands and ready to be paid to the one entitled thereto, but he is confronted with the conflicting claims thereto of Florence I. Reynolds and of her trustee in bankruptcy. The bankrupt claims her trustee in bankruptcy has no claim to the money and no interest therein. The trustee, on the other hand, claims it is surplus income applicable to the payment of her debts existing pri- or to such bankruptcy, and that title passed to the trustee in bankruptcy, or at least, that the trustee occupies the position of creditors with execution, and may enforce the claim of the creditors of Florence I. Reynolds to this fund.

We have the case of two claimants to the fund1 now in the hands of Mr. Bullock, Jr., as trustee under the will of Mr. Bender, and who makes no claim thereto, but is perfectly willing to pay it to the party entitled thereto. Assuming thé fund to be a specific one, it would seem that it might be paid into court, leaving the two claimants to bring action and determine title. It may be necessary to have Mr. Bullock a party to any suit brought. But, however this may be, I do not see that this court has any power or jurisdiction to compel or direct the trustee ill bankruptcy to forego his claim as such trustee to the money, accept a bond, and consent that the money be paid by the trustee under the will to Florence I. Reynolds on the giving of suchbond. I am not pointed to any statute authorizing such an order. In the absence of some specific statute authorizing it, I am of the opinion such an order and bond would be nullities. Clearly the trustee under the will, in face of these two conflicting claims and demands, ought not to pay over the money, except on the judgment or decree of some court of competent jurisdiction, or on the consent of the claimants. Either the trustee in bankruptC3>- is entitled to this money or he is not, and if he is that fact can be determined in an appropriate action or proceeding and judgment rendered accordingly. Generally the court has control over a trustee in bankruptcy in dealing with the assets of the estate, but I do not think this power of the court is broad enough to authorize an order directing him as trustee to consent that the money in dispute be paid to the adverse claimant, and that he accept tire bond of such claimant, with surety, to pay an equal amount, with interest and costs, if it be determined that the money did not belong to the one to whom it was paid. If the money is paid to Florence I. Reynolds with the consent of the trustee in bankruptcy, whom will the trustee sue ? What will be the form of action ? It seems to me such a proceeding is unauthorized. The law and equity has given a remedy in such a case, and I do not see that the bankruptcy court has power to create a new one.

Application denied.