SIBLEY, Circuit Judge.
In a municipal bankruptcy composition whereby the old bonds of the debtor were to be exchanged for new bonds with later maturities and less interest rates, the appellant Ed C. Wright,
We think the court was in error in esteeming itself -cut off by the judgments mentioned from investigating the merits of this petition. The denial of the motion on Oct. 18, 1940, was only a refusal to modify an interlocutory injunction. It merely maintained the status, and denied Wright permission at that time to go elsewhere with his troubles. Being an exercise of discretion, we doubt if this judgment could have been successfully reviewed. The interlocutory decree of March 6, 1940, operated to confirm the master’s disallowance of the claim filed on these bonds, and the findings of the judge indicate that he thought Turner’s suit made their invalidity res judicata. The disallowance of a claim in bankruptcy is of course a judicial act, so far final as to admit of appeal, and constitute a thing adjudged if appeal be not taken. But a bankruptcy court is not wholly precluded by failure to take an appeal from reconsidering either the allowance or the disallowance of a claim so long as the cause remains under its control. The general Bankruptcy Act, 11 U.S.C.A. § 11, sub. a(2), gives jurisdiction to “allow claims, disallow claims, reconsider allowed or disallowed claims, and allow or disallow them against bankrupt estates.” In Wayne United Gas Co. v. Owens-Illlinois Glass Co., 300 U.S. 131, 57 S.Ct. 382, 81 L.Ed. 557, it was held that a court of bankruptcy has no terms, and can vacate even a final decree in its sound discretion though the time for appeal has expired. This power in the bankruptcy court was recognized by this court in Wragg v. Federal Land Bank, 5 Cir., 125 F.2d 1003. We are of opinion that this bankruptcy court has jurisdiction in its discretion, if justice and equity so require, to reconsider the disallowance of the proof of claim on these bonds, or to release this claimant from the injunction against a suit on them if it be true that the claim is unaffected by the composition.
These considerations suggest themselves to us as pertinent. The petitioner for composition got dollar for dollar for these thirteen bonds, just as it did for the others. These bonds have never been paid. They were as valid as any others at the filing of this proceeding unless defeated by the Turner judgment. That judgment was not rendered in a suit on the bonds, which were not then due, but the claim alleged was that the bonds were unconstitutional and void and that Turner was entitled presently to get back what he paid for them. The verdict and judgment adjudicated that Turner could not get his money back, but on their face did not expressly adjudicate that the bonds were void. If the law had been then properly understood and charged to the jury, the instruction would have been that the bonds were valid, (as it is now known they are), and for that reason Turner must keep the bonds and could not recover then his money. But under a mistake of law the parties had stipulated as a fact that the bonds were void. The judge went further and charged the jury that the violation of the Constitution in issuing the bonds was a delictum that the parties were in pari delicto, and for that reason Turner could not recover. A correct judgment was thus reached for a wrong reason. On appeal this court did not look into the rea[580]*580sons for the judgment, but affirmed it for lack of a bill of exceptions. Turner v. Board, 5 Cir., 75 F.2d 147.
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SIBLEY, Circuit Judge.
In a municipal bankruptcy composition whereby the old bonds of the debtor were to be exchanged for new bonds with later maturities and less interest rates, the appellant Ed C. Wright,
We think the court was in error in esteeming itself -cut off by the judgments mentioned from investigating the merits of this petition. The denial of the motion on Oct. 18, 1940, was only a refusal to modify an interlocutory injunction. It merely maintained the status, and denied Wright permission at that time to go elsewhere with his troubles. Being an exercise of discretion, we doubt if this judgment could have been successfully reviewed. The interlocutory decree of March 6, 1940, operated to confirm the master’s disallowance of the claim filed on these bonds, and the findings of the judge indicate that he thought Turner’s suit made their invalidity res judicata. The disallowance of a claim in bankruptcy is of course a judicial act, so far final as to admit of appeal, and constitute a thing adjudged if appeal be not taken. But a bankruptcy court is not wholly precluded by failure to take an appeal from reconsidering either the allowance or the disallowance of a claim so long as the cause remains under its control. The general Bankruptcy Act, 11 U.S.C.A. § 11, sub. a(2), gives jurisdiction to “allow claims, disallow claims, reconsider allowed or disallowed claims, and allow or disallow them against bankrupt estates.” In Wayne United Gas Co. v. Owens-Illlinois Glass Co., 300 U.S. 131, 57 S.Ct. 382, 81 L.Ed. 557, it was held that a court of bankruptcy has no terms, and can vacate even a final decree in its sound discretion though the time for appeal has expired. This power in the bankruptcy court was recognized by this court in Wragg v. Federal Land Bank, 5 Cir., 125 F.2d 1003. We are of opinion that this bankruptcy court has jurisdiction in its discretion, if justice and equity so require, to reconsider the disallowance of the proof of claim on these bonds, or to release this claimant from the injunction against a suit on them if it be true that the claim is unaffected by the composition.
These considerations suggest themselves to us as pertinent. The petitioner for composition got dollar for dollar for these thirteen bonds, just as it did for the others. These bonds have never been paid. They were as valid as any others at the filing of this proceeding unless defeated by the Turner judgment. That judgment was not rendered in a suit on the bonds, which were not then due, but the claim alleged was that the bonds were unconstitutional and void and that Turner was entitled presently to get back what he paid for them. The verdict and judgment adjudicated that Turner could not get his money back, but on their face did not expressly adjudicate that the bonds were void. If the law had been then properly understood and charged to the jury, the instruction would have been that the bonds were valid, (as it is now known they are), and for that reason Turner must keep the bonds and could not recover then his money. But under a mistake of law the parties had stipulated as a fact that the bonds were void. The judge went further and charged the jury that the violation of the Constitution in issuing the bonds was a delictum that the parties were in pari delicto, and for that reason Turner could not recover. A correct judgment was thus reached for a wrong reason. On appeal this court did not look into the rea[580]*580sons for the judgment, but affirmed it for lack of a bill of exceptions. Turner v. Board, 5 Cir., 75 F.2d 147. Since the Turner case was not a suit upon the bonds, there is no res judicata in the proper sense. Whether there is an estoppel by-judgment, or in pais, because of the stipulation that the bonds were invalid, Turner having gained no advantage by taking that position, is a question which it seems to us merits careful consideration. Furthermore, if there be an estoppel, there is the question, apparently not yet considered, whether such a defense is good against a bona fide holder for value before maturity of three of the bonds.
The affirmance by this court of the interlocutory decree of March 6, 1940, was on the ground that the appellant, Roberts, had no standing to appeal. No opinion was expressed as to any of the questions now raised. Roberts v. Board, 5 Cir., 117 F.2d 943. It ought not to preclude a reconsideration of the claim of Wright, the part of the decree disallowing his claim on these bonds not having been challenged or reviewed.
There is also the question whether, after the petitioner amended the petition for composition so as to exclude these bonds from the debts to be composed, the master and judge had authority to pass upon the validity of them as claims in this proceeding. We make no ruling upon any of these suggested questions. Our holding is that the district court had and still has power to consider or reconsider them and to grant such relief as in its discretion ought to be granted.
The judgment is accordingly reversed and the cause remanded for further proceedings consistent with this opinion. .
The bonds were at first owned by Ed C. Wright and Company and were transferred to Ed C. Wright pending the proceedings. The change in ownership is ignored as not presently important.