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In re

In re

single person, and as a corporation is a person under the statute, so it is also an individual under the order. In re United Button Co. (D. C. 1904) 137 Fed. 668, 13 Am. Bankr. Rep. 454; In re Globe Sec. Co. (D. C. 1904) 132 Fed. 709. And where two petitions are filed against a corporation, one in the state by which it was incorporated, and one in a district in which it does business, the first hearing should be had at the former place, as that is the place of its domicile, and proceedings in the other court will be stayed to await such hearing and the decision thereon. Globe Sec. Co. (D. C. 1904) 132 Fed. 709; In re United Button Co. (D. C. 1904) 132 Fed. 378, 12 Am. Bankr. Rep. 761. In case there is substantial doubt as to the domicile or place of residence of a debtor, against whom petitions are filed in different districts, the court having jurisdiction of the petition earliest in date should be allowed to hear and determine the question of jurisdiction as depending on domicile, and the other court, without dismissing the petition before it, will stay proceedings thereon to await the result. Waxelbaum (D. C. 1899) 98 Fed. 589, 3 Am. Bankr. Rep. 392.

The provision of the general order that the court which makes the first adjudication shall "retain jurisdiction over all proceedings," is to be taken subject to the directions of this section with reference to the transfer of cases to other districts. In re Isaacson (D. C. 1908) 161 Fed. 779, 20 Am. Bankr. Rep. 430. This provision is not to be read as narrowly restricted to the bankruptcy of single debtors, but it applies equally to cases where different petitions are filed against a partnership. In re Sears (D. C. 1901) 112 Fed. 58, 7 Am. Bankr. Rep. 279. The "parties in interest" whose convenience is to be consulted, are not limited to unsecured creditors of the bankrupt, but the term is intended to include all persons whose pecuniary interests may be directly affected by the bankruptcy proceedings. In re United Button Co. (D. C. 1904) 137 Fed. 668, 13 Am. Bankr. Rep. 454. The burden of proof, however, as to the place where the proceedings will be most convenient for parties in interest rests upon those who ask for a transfer. And where the applicants are a minority of the creditors, and represent only a small part of the indebtedness, a transfer will not be warranted by the single fact that the greater part or all of the bankrupt's

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property is in the other district, as the court has power to order its sale there if deemed best. In re Tybo Mining & Reduction Co. (D. C. 1904) 132 Fed. 978, 13 Am. Bankr. Rep. 68.

So a transfer will not be ordered where the request therefor is presented by creditors who have received preferences which they do not offer to surrender, and it is doubtful whether the transfer will be for the greater convenience of the creditors who have not been preferred. In re Sears (D. C. 1901) 112 Fed. 58, 7 Am. Bankr. Rep. 279. Proximity of the place of business of a bankrupt to the court entertaining proceedings in bankruptcy, and proximity of a majority of the bankrupt's creditors in number or amount of claims, is persuasive, but not conclusive, in determining the court which shall assume final jurisdiction. In re United Button Co. (D. C. 1904) 137 Fed. 668, 13 Am. Bankr. Rep. 454.

Where a petition in involuntary bankruptcy against a debtor was filed in Georgia, and, pending a hearing there: on, he filed his voluntary petition in New York, alleging that he was a resident of the latter state, but it appeared that he had formerly been engaged in business in Georgia, that the debts to be affected were all contracted there, that his present business was agent or employe of the corporation which succeeded his former firm, that he was accustomed to spend a part of his time in Georgia, and that his creditors desired that the bankruptcy proceedings should be conducted in the latter state, it was held that it would be for the "greatest convenience of the parties in interest" that the court in Georgia should proceed with the case. In re Waxelbaum (D. C. 1899) 98 Fed. 589, 3 Am. Bankr. Rep. 392. And see further as to considerations affecting question of "greatest convenience.” In re Southwestern Bridge & Iron Co. (D. C. 1904) 133 Fed. 568, 13 Am. Bankr, Rep. 304; In re General Metals Co. (D. C. 1904) 133 Fed. 84, 12 Am. Bankr. Rep. 770.

Relationship between the bankrupt and the deputy clerk of the district court in whose office the petition was filed will be cause for transferring the case to another seat of the court in the same district and division and ordering the record to be filed and docketed in the office of the clerk of the court at the latter place. Bray v. Cobb (D. C. 1898) 91 Fed. 102, 1 Am. Bankr. Rep. 153.

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judge of the court of bankruptcy review a decision of the referee adverse to him, cannot be said to have consented to the jurisdiction, although he also excepts to the petition as not stating a cause of action and further pleads a general denial. In re Michie (D. C. 1902) 116 Fed. 749, 8 Am. Bankr. Rep. 734.

The consent of a defendant to be sued in the court of bankruptcy means consent to the tribunal in which the controversy is to be carried on, and not to the mode of procedure, which is regulated by general principles of law, unless other provision is made. In re Raphael (1911) 192 Fed. 874, 113 C. C. A. 198. And if the mode of procedure adopted is unlawful, the appearance of the defendant and his contesting the proceedings will not confer jurisdiction. Sinsheimer V. Simonson (1901) 107 Fed. 898, 47 C. C. A. 51, 5 Am. Bankr. Rep. 537.

The consent of the defendant, provided for in this part of the bankruptcy act, governing the jurisdiction of suits by a trustee in bankruptcy, was not intended to enlarge the jurisdiction of the federal circuit courts so as to confer a jurisdiction which they would not have because of diverse citizenship of the parties or because of a federal question being involved. Lovell v. Isidore Newman & Son (1913) 227 U. S. 412, 33 Sup. Ct. 375, 57 L. Ed. 577.

28. Jurisdiction of other federal courts.--A court of bankruptcy may exercise ancillary jurisdiction to enable a trustee appointed in another jurisdiction to reduce to possession property of the bankrupt within its district. In re Sage (D. C. 1915) 224 Fed. 525. See Babbitt v. Dutcher (1910) 216 U. S. 102, 30 Sup. Ct. 372, 54 L. Ed. 402, 17 Ann. Cas. 969, 23 Am. Bankr. Rep. 519; In re Elkus (1910) 216 U. S. 115, 30 Sup. Ct. 377, 54 L. Ed. 407; The Alert (D. C. 1912) 199 Fed. 542; In re Lipman (D. C. 1912) 201 Fed. 169, 29 Am. Bankr. Rep. 139.

A bankruptcy court in Louisiana has ancillary jurisdiction of a suit by a bankrupt's trustee to subject property in Louisiana to distribution in bankruptcy in Mississippi under a bill alleging that property of less value than $3,000 had been omitted from the bankrupt's schedules and conveyed to defendant after adjudication. Hartman v. Ackoury (D. C. 1914) 210 Fed. 188.

As to plenary actions, for the recoy. ery of property against adverse claimants or the like, the jurisdiction of the courts of bankruptcy is territorially restricted, and such a court cannot take jurisdiction of a trustee's suit for the recovery of property outside the boundaries of its own district, but, in order to obtain the possession of such property or its avails, the trustee must invoke the jurisdiction of the proper local court, either state or federal. In

re Brittania Mining Co. (D. C. 1912) 197 Fed. 459, 28 Am. Bankr. Rep. 6.51; Paine v. Caldwell (D. C. 1872) 6 N. B. R. 558, Fed. Cas. No. 10,674; In re Farrell (1912) 201 Fed. 338, 119 C. C. A. 576; In re Geller (D. C. 1914) 216 Fed. 558.

A trustee in bankruptcy desiring to sue for the recovery of a preference or to avoid a fraudulent conveyance, may go into the federal district court in the district where the proposed defendant resides, and there prosecute his ac. tion. Parker v. Sherman (D. C. 1912) 195 Fed. 648, 28 Am. Bankr. Rep. 379; Teague v. Anderson Hardware Co. (1). C. 1908) 161 Fed. 705, 20 Am. Bankr, Rep. 424; Lawrence v. Lowrie (D. C. 1903) 133 Fed. 995, 13 Am. Bankr. Rep. 297; Hills v. F. D. McKinniss Co. (1. C. 1910) 188 Fed. 1012, 26 Am. Bankr. Rep. 329; Sherman Bingham (C. C. 1872) 7 N. B. R. 490, Fed. Cas. No. 12,762. He may also sue in another district to collect assets of the estate. In re Farrell (C. C. A. 1912) 201 Fed. 338. In re Rathfon Bros. (D. C. 1912) 200 Fed. 108, 29 Am. Bankr. Rep. 22; Shainwald v. Lewis (D. C. 1880) 5 Fed. 510; Goodall v. Tuttle (D. C. 1872) 7 N. B. R. 193, Fed. Cas. No. 5,533; In re Murphy, 2 Nat. Bankr. News, 393. Or to recover a sum of money due to the bankrupt under written contract. Babbitt v. Burgess (C. C. 1873) Fed. Cas. No, 693. Or to redeem mortgag. ed property of the bankrupt. Barnard v. Hartford, P. & F. R. Co. (C. C. 1878) Fed. Cas. No. 1,003.

The jurisdiction thus to be exercised by the court in another district in a plenary suit is not a jurisdiction in bankruptcy, but its ordinary jurisdiction, in law or equity as the case may be, and therefore the trustee must pursue the same remedies and is subject to the same rules as those would be whose rights he represents, that is, either the bankrupt or the creditors according to the nature of the suit. Markson v. Heaney (C. C. 1871) 4 N. B. R. 510, Fed. Cas. No. 9,098; In re Williams (D. C. 1903) 123 Fed. 321, 10 Am. Bankr. Rep. 538; Hull v. Burr (1907) 153 Fed. 945, 83 C. C. A. 61, 18 Am. Bankr. Rep. 541.

And see United States Fidelity & Guaranty Co. v. Bray (1912) 225 V. S. 205, 32 Sup. Ct. 620, 56 L. Ed. 1055, 28 Am. Bankr. Rep. 207; Scott v. George's Creek Coal & Iron Co. (D. C. 1913) 202 Fed. 251.

The trustee cannot maintain a plenary suit in a court of bankruptcy of another district to recover alleged excessive payments or transfers to counsel made by the bankrupt in contemplation of bankruptcy and for services to be rendered therein, when the court in which the proceeding is pending has made no order for the re-examination and reduction of such payments or transfers. In re Wood (1908) 210 U.

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ney. Bray v. Cobb (D. C. 1898) 91 several inferior courts of bankruptcy, Fed. 102, 1 Am. Bankr. Rep. 153. confers no power on such courts to

control the discretion of a district 3. Removal of referees. The provi- court in making an order for the resion of section 24b (ante, § 9608), giv- moval of referee in bankruptcy. ing to the circuit courts of appeals ju- Birch v. Steele (1908) 165 Fed. 577, risdiction to superinteud and revise in 91 C. C. A. 415, 21 Am. Bankr. Rep. matter of law the proceedings of the 539. § 9619. (Act July 1, 1898, c. 541, $ 35.) Qualifications of referees.

Qualifications of Referees.-a Individuals shall not be eligible to appointment as referees unless they are respectively (1) competent to perform the duties of that office; (2) not holding any office of profit or emolument under the laws of the United States or of any State other than commissioners of deeds, justices of the peace, masters in chancery, or notaries public; (3) not related by consanguinity or affinity, within the third degree as determined by the common law, to any of the judges of the courts of bankruptcy or circuit courts of the United States, or of the justices or judges of the appellate courts of the districts wherein they may be appointed; and (4) residents of, or have their offices in, the territorial districts for which they are to be appointed. (30 Stat. 555.)

The circuit courts were abolished and their jurisdiction transferred to the district courts by Jud. Code, 88 289–291, ante, $s 1266–1268.

Notes of Decisions Disqualification of referees by inter- interest either in the proceedings in est. The provision of section 39b (post, bankruptcy or in the estate of the § 9623), that referees shall not act in bankrupt; and the bankrupt's debtor cases in which they are directly or in- cannot be said to be "interested" in this directly interested, does not apply to way, since his liability is not increasthe interest of a referee by way of ed, diminished, or in any way changed commissions on sums paid to creditors by the proceedings. But the judge on as dividends. In re Abbey Press being apprised of the fact that the ref(1904) 134 Fed. 51, 67 C. C. A. 161, eree is a debtor of the bankrupt, may, 13 Am. Bankr, Rep. 11.

in his discretion, revoke the order of A referee is not disqualified by inter- reference and send the case to another est from acting in a particular case referee. Bray V. Cobb (D. C. 1898) because he is a debtor to the bankrupt. 91 Fed. 102, 1 Am. Bankr. Rep. 153. The interest which will disqualify is an § 9620. (Act July 1, 1898, c. 541, $ 36.) Oaths of office of referees.

Oaths of Office of Referees.--a Referees shall take the same oath of office as that prescribed for judges of United States courts. (30 Stat. 555.) § 9621. (Act July 1, 1898, c. 541, § 37.) Number of referees.

Number of Referees.-a Such number of referees shall be appointed as may be necessary to assist in expeditiously transacting the bankruptcy business pending in the various courts of bankruptcy. (30 Stat. 555.) § 9622. (Act July 1, 1898, c. 541, § 38.) Jurisdiction of referees.

Jurisdiction of Referees.-a Referees respectively are hereby invested, subject always to a review by the judge, within the limits of their districts as established from time to time, with jurisdiction to (1) consider all petitions referred to them by the clerks and make the adjudications or dismiss the petitions; (2) exercise the powers vested in courts of bankruptcy for the administering of oaths to and the examination of persons as witnesses and for requiring the production of documents in proceedings before them, except the power of commitment; (3) exercise the powers of the judge for the taking possession and releasing of the property of the bankrupt in the event of the issuance by the clerk of a certificate showing the absence of a judge from the judicial district, or the division of the district, or his sickness, or inability to act; (4) perform such part of the duties, except as to questions arising out of the applications of

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bankrupts for compositions or discharges, as are by this Act conferred on courts of bankruptcy and as shall be prescribed by rules or orders of the courts of bankruptcy of their respective districts, except as herein otherwise provided; and (5) upon the application of the trustee during the examination of the bankrupts, or other proceedings, authorize the employment of stenographers at the expense of the estates at a compensation not to exceed ten cents per folio for reporting and transcribing the proceedings. (30 Stat. 555.)

Notes of Decisions 1. Jurisdiction and powers of referees. Fed. 726, 111 C. C. A. 454, 26 Am. 2. Determination of adverse claims. Bankr. Rep. 883; In re Peacock (C. C. 3. Specific powers and authorities of ref

1910) 178 Fed. 851, 24 Am. Bankr.

Rep. 159; In re F. M. & S. Q. Carlile Ordering surrender of property. 5. In proceedings for reclamation of

(D. C. 1912) 199 Fed. 612, 29 Am. property.

Bankr. Rep. 373; In re Bacon (D. C. Grant of injunction.

1912) 196 Fed. 986, 28 Am. Bankr. Rep. Appointment of receiver.

565. As to consent of defendant con8. Proceedings before referees.

ferring jurisdiction in such cases, see 9. Taking and preservation of evi- Kilgore v. Barr (1912) 114 Va. 70, 75 dence.

S. E. 762. A referee in bankruptcy has 10. Review and reopening of case.

no jurisdiction of a proceeding to de11. Certifying questions for review by

termine the validity of a transfer of judge. 12. Parties entitled to review.

property by bankrupts to one claiming 13. Time of petitioning for review.

adversely, and who objects to the juris. 14. Exceptions.

diction. In re Petronio (C. C. A. 1914) 15.

Record on petition for review. 220 Fed. 269. Where a creditor as16. Review of proceedings by judge.

serted that he had received goods from Effect of referee's findings of fact, a bankrupt in payment of his debt, and 1. Jurisdiction and powers of referees.

refused consent to a summary adjudica

tion, the referee is without jurisdiction, -The jurisdiction of referees in bank

and must remit the trustee to a plenary ruptcy is confined to the limits of the

suit. districts for which they are appointed

In re Vallozza (D. C. 1915) 225

Fed. 334. by the judge, and does not extend to

Where such a case arises, it is the cases pending outside such districts,

duty of the referee to hear the testi. except where the referees are specially

mony, in order to determine whether appointed to fill a vacancy temporarily.

the third person's claim is real or preIn re Schenectady Engineering & Const.

tended. If he finds that the claim is Co. (D. C. 1906) 147 Fed. 868, 17 Am. Bankr. Rep. 279.

made in good faith and is probably

real, but of doubtful validity or quesA referee in bankruptcy has no ju

tionable faith, it should then be deterrisdiction of summary proceedings to compel a corporation to issue stock to

mined in a plenary suit; but if he finds

that the claim is without any actual the trustee pursuant to an agreement

merit or legal foundation, he should remade with the bankrupt. A referee in

quire a surrender of the property to the bankruptcy, having no jurisdiction of a

trustee. In re Holbrook Shoe & Leathsuit by a trustee to enforce specific

er Co. (D. C. 1908) 165 Fed. 973, 21 performance of a contract between the bankrupt and a third person, acquires

Am. Bankr. Rep. 511.

Within the rule that a referee has juno jurisdiction by the consent of such third person.

risdiction to determine claims of third In re Ballou (D. C. 1914) 215 Fed. 810.

persons which are merely colorable, a

claim to property alleged to belong to a On a petition to sell mortgaged property free from the lien and transfer the

bankrupt's estate is not "colorable"

when the claimant sets up as facts and same to the proceeds, there being no

not as conclusions of law matters which, allegation in the petition nor in the

if true, would constitute a statement of notice that an attack was made on the

an adverse claim. In a proceeding by a validity of the mortgage, the referee

trustee against a bankrupt's wife to had no jurisdiction to adjudge it void.

recover $3,000, alleged to belong to his In re Martin (C. C. A. 1914) 210 Fed.

estate, her answer, that she had owned 620.

the money since 1910, had loaned it to 2. Determination of adverse her son-in-law, and that he had repaid claims. The referee has no power or it in May, 1911, did not indicate that jurisdiction to order third persons, in her claim was merely colorable, and possession of property claimed by the she was therefore entitled to a determitrustee, to deliver it to the latter, where nation thereof in a plenary suit. In the possession of the third person is re Blum (1913) 202 Fed. 883, 121 C. not admitted to be in subordination to C. A. 241. the bankrupt's title, but is based on a The administrator of an estate, who bona fide adverse claim. In re Blum appeared in bankruptcy proceedings in (C. C. A. 1913) 202 Fed. 883, 29 Am. response to an order of the referee to Bankr. Rep. 332; In re Gill (1911) 190 show cause, and went to trial upon the

jurisdiction and authority to authorize the business of the bankrupt to be continued for a limited time, when that is for the best interests of the estate, yet a referee in bankruptcy should not take it upon him to exercise such authority, where it involves transactions of considerable magnitude, especially since the amount of his own compensation may be directly involved, nor in any case should he authorize the issue of trustee's certificates to raise money to accomplish that end. Bray v. Johnson (1908) 166 Fed. 57, 91 C. C. A. 643, 21 Am. Bankr. Rep. 383.

merits without questioning the jurisdiction, waived his right to insist that the trustee should have proceeded against him by an action. In re F. W. Hall & Sons (D. C. 1913) 208 Fed. 578.

A referee in bankruptcy has jurisdiction to determine whether a preference has been received by a secured creditor. In re Keystone Press (D. C. 1913) 203 Fed. 710.

3. Specific powers and authorities of referees.-The referee has power to make an order requiring the trustee to give the bankrupt a certificate of the names and addresses of the creditors who have proved their claims, to enable him to apply for his discharge. In re Blaisdell (D. C. 1871) 6 N. B. R. 78, Fed. Cas. No. 1,488.

The referee, in case there is delay in winding up the estate in bankruptcy, may properly inquire why a settlement has not been made, and suggest the propriety of making progress, and indicate what steps the trustee should take. In re Bank of North Carolina (D. C. 1879) 19 N. B. R. 164, Fed. Cas. No. 896.

The referee has authority to order notice to creditors of a meeting to authorize the trustee to oppose the bankrupt's application for discharge. In re Hockman (D. C. 1912) 205 Fed. 330. He may call a meeting of creditors, if deemed advisable, before action is taken with respect to property subject to liens. In re Cutler & John (D. O. 1916) 228 Fed. 771. An order continuing a meeting of creditors of a bankrupt estate was a matter of discretion with the referee. In re RosenfeldGoldman Co. (D. C. 1915) 228 Fed. 921.

Referees in bankruptcy may administer the oath to witnesses appearing for examination or in any hearing before them.. U. S. v. Simon (D. C. 1906) 146 Fed. 89, 17 Am. Bankr. Rep. 41; In re Dean (D. C. 1874) 2 N. B. R. 89, Fed. Cas. No. 3,700.

It is within the jurisdiction and the discretion of a referee in bankruptcy to order amendments to be made in the petition and schedules of a voluntary bankrupt referred to him, in particulars as to which he finds them defective or insufficient, and to refuse to call a first meeting of creditors until such amendments are made. In re Brumelkamp (D. C. 1899) 95 Fed. 814, 2 Am. Bankr. Rep. 318.

A referee in bankruptcy has no authority to dismiss a bankruptcy proceeding generally, or any particular matter in bankruptcy referred to him after the adjudication. In re Elby (D. C. 1907) 157 Fed. 935, 19 Am. Bankr. Rep. 734.

A referee in bankruptcy has no authority to collect or receive money belonging to an estate in bankruptcy. In re Pierce (D, C. 1901) 111 Fed. 516, 6 Am. Bankr. Rep. 747. Although courts of bankruptcy have

4. Ordering surrender of prop. erty.-A referee in bankruptcy has jurisdiction of an application by a trustee in bankruptcy for an order requiring the bankrupt to surrender money or property of his estate alleged to be in his possession or control and to be withheld or concealed from the trustee, to cite the bankrupt before him to show cause, and to make an order in accordance with his findings. In re Oliver (D. C. 1899) 96 Fed. 85, 2 Am. Bankr. Rep. 783; In re Tudor (D. C.) 96 Fed. 942, 2 Am. Bankr. Rep. 808; In re Mayer (D. C. 1900) 98 Fed. 839, 3 Am. Bankr. Rep. 533; In re Miller (D. C. 1900) 105 Fed. 57, 5 Am. Bankr. Rep. 184; Prather v. Prather (1882) 4 Ky. Law Rep. 454.

His action is subject to review by the judge of the court of bankruptcy, but his decision will not be reversed unless plainly erroneous or based on clearly insuffi. cient evidence. In re Tudor (D. C.) 96 Fed. 942, 2 Am. Bankr. Rep. 80s. If, tbe order of the referee requiring a surrender of property was based on a mistake of fact, the referee has power, on petition of the bankrupt, filed within the time limited for review of his decision, to reopen and reconsider the matter, and, the mistake being shown, to set aside the order. In re Brenner (D. C. 1911) 190 Fed. 209, 26 Am. Bankr. Rep. 646. If the bankrupt fails or refuses to obey an order of this kind, lawfully made, the referee may enter the fact on his record, and it is then his duty to certify the facts to the judge, as the latter alone has the authority to adjudge the bankrupt in contempt and impose a punishment therefor. În re Miller (D. C. 1900) 105 Fed. 57, 5 Am. Bankr. Rep. 184.

The referee has power in the first instance to enter an order against & third person to show cause why he should not be required to surrender or pay over to the trustee property or money in his hands, alleged to belong to the estate in bankruptcy, and upon a hearing, to make an order requiring such surrender or payment within a limited time. Mueller v. Nugent (1902) 184 U. S. 1, 22 Sup. Ct. 269, 46 L. Ed. 405, 7 Am. Bankr. Rep. 224; In re Famous Clothing Co. (D. C. 1910) 179 Fed. 1015, 24 Am. Bankr. Rep. 780.

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