Matter of Loving

224 U.S. 183, 32 S. Ct. 446, 56 L. Ed. 725, 1912 U.S. LEXIS 2294
CourtSupreme Court of the United States
DecidedApril 1, 1912
Docket216
StatusPublished
Cited by80 cases

This text of 224 U.S. 183 (Matter of Loving) is published on Counsel Stack Legal Research, covering Supreme Court of the United States primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Matter of Loving, 224 U.S. 183, 32 S. Ct. 446, 56 L. Ed. 725, 1912 U.S. LEXIS 2294 (1912).

Opinion

Mr. Justice Day

delivered the opinion of the court.

This case is here upon certificate from the Circuit Court of Appeals for the Sixth Circuit.

*184 From the statement in the certificate preceding the question asked of this court, it appears that Loving, Trustee in bankruptcy of the Starks-Ullman Company, filed a petition in the Circuit Court of Appeals to revise in matter of law an order of the District Court adjudging that the American-German National Bank of Paducah, Kentucky, had a lien under the statutes of Kentucky upon the property and effects of the bankrupt, in the sum of $10,125 and interest. The facts are stated as follows:

“On December 4, 1908, after the Saddlery Company had been adjudged a bankrupt, and the cause had been referred to the referee in bankruptcy, the bank filed before the referee its proof of claim, verified by its cashier, in which it alleged that the bankrupt was indebted to it in the sum of $11,125, evidenced by two notes, one for $2,000 dated April 20, 1908, and due four months after date* 'and the other for $8,000 dated July 25, 1908, and due- two months after date, each of which provided for a reasonable attorney’s fee, and executed by the bankrupt for unmanufactured leather sold to it for use in carrying on its manufacturing business. After setting forth the nature of this indebtedness, the proof of claim concluded as follows: ‘Deponent says that ... by and under the provision of Sections 2487-2490 of the Kentucky statutes, the claimant has a lien, upon all the property and effects of the bankrupt involved in its business, and upon all the accessories connected therewith used in its business, to secure the payment of its said indebtedness; and deponent now asserts its claim and hen upon all such property and effects to secure the payment of its said debt, including interest upon the notes from maturity thereof, and an attorney’s fee as provided in said notes of 10 per cent, for the collection thereof by legal process.’
“‘Wherefore, the affiant prays that the claimant’s debt be allowed as a hen claim against the assets of • *185 this bankrupt estate, and for all other proper and equitable relief.’
“The trustee in bankruptcy thereupon filed exceptions to the allowance of this claim iñ so far as it was made for any sum in excess of $10,000 at the time of the adjudication of bankruptcy, for various reasons set out in the exceptions, and also further objected and excepted to the allowance of any part of the said claim as a lien in favor of the bank against the estate of the bankrupt, for various reasons set forth in the exceptions. These exceptions of the trustee concluded as follows:
“'Wherefore, he prays that said claim be disallowed as a lien against the property of the aforesaid bankrupt, and that it be allowed as a general claim only for the sum of two thousand ($2,000) dollars, with interest from August 20,1908; and for eight thousand ($8,000) dollars, with interest from September 25, 1908.’ ”

The'referee, having heard the case upon an agreed statement of facts, ordered that the exceptions of the trustee be overruled, and the claim of the bank was established and allowed as a lien against the estate of the bankrupt. The trustee in bankruptcy thereupon filed his petition for review of the order of the referee in the District Court. The District Court affirmed the order of the referee and adjudged the claim to be in the amount found, with a lien for the security thereof, as reported by the referee. More than ten days thereafter, on June 30, 1909, the trustee in bankruptcy filed his petition for the revision of the order of the District Court in the Circuit Court of Appeals, his petition reciting:

“That said order was erroneous in matter of law in that it adjudged a dismissal of your petitioner’s petition, and in that it adjudged that the American-German National Bank of Paducah, had any lien upon any of the property or effects of the aforesaid bankrupt by virtue of the statutes of the state of Kentucky in such *186 cases inade and provided, or by virtue of any law or contract.
“Wherefore your petitioner, feeling aggrieved, because of such order, asks that the same may be revised in matter of law by this Honorable Court of Appeals of the United States for the Sixth Circuit, as provided in Section 24b of the bankruptcy law of 1898, and the rules and practice in such cases provided.”

In this certificate it is said:

“In the brief filed in this court in behalf of the trustee in support of the petition, no question is made as to the allowance of the claim of the bank as a general claim against the bank(ntpi), or. as to its amount, the sole contention of the trustee on the merits being that the District Court was in error in matter of law in adjudging that under the Kentucky statutes the claim was secured by a lien upon the property and effects of the bankrupt.”

The Circuit Court of Appeals propounds the question whether it has jurisdiction to revise the order of the District Court upon the petition for revision filed under § 24b of the Bankruptcy Act.

The Bankruptcy' Act of 1898, § 24, gives appellate jurisdiction to the Circuit Court of Appeals and to this court of controversies arising in bankruptcy proceedings, and in paragraph b provides :

“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.”

Section 25 provides for appeals and writs of error in bankruptcy proceedings to the Circuit Court of Appeals and to this court. These sections of the Bankruptcy Act were under consideration in this court in the case of Coder v. Arts. 213 U. S. 223, and it was there held that *187 controversies arising in bankruptcy proceedings, as distinguished from bankruptcy proceedings, were appealable to the Circuit Court of Appeals under the Court of Appeals Act of March 3, 1891 (26 Stat. 826, c. 517); that where a claim alleged to be secured by a lien upon the bankrupt’s estate, was filed against a bankrupt for allowance, an appeal was given under § 25a to the Circuit Court of Appeals, as from a judgment allowing or rejecting a claim of $500 or over, and that from any final decision of the Circuit Court of Appeals allowing or rejecting a claim coming within § 25b a further appeal was given to this court. Under the decision of this court in that case there can be no doubt that the bank in this case instituted a proceeding in bankruptcy, which was appealable under § 25a to the Circuit Court of Appeals. The fact that after the adjudication of the claim the trustee made no objection to its allowance as a valid claim, but intended only to contest its validity as a lien upon the bankrupt’s estate, made no difference as to the appellate character of the controversy.

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Bluebook (online)
224 U.S. 183, 32 S. Ct. 446, 56 L. Ed. 725, 1912 U.S. LEXIS 2294, Counsel Stack Legal Research, https://law.counselstack.com/opinion/matter-of-loving-scotus-1912.