IN RE LOVING(1912)
Mr. James Denis Mocquot for Loving, trustee.
Mr. W. F. Bradshaw, Jr., for the American-German National Bank.
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. [224 U.S. 183, 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 Saddlery 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:
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:
In this certificate it is said:
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:
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 , 53 L. ed. 772, 29 Sup. Ct. Rep. 436, 16 A. & E. Ann. Cas. 1008, and it was there held that [224 U.S. 183, 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. at L. 826, chap. 517, U. S. Comp. Stat. 1901, p. 488]; 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. A bankruptcy proceeding was instituted as to the claim and its alleged lien, as distinguished from a controversy arising in a bankruptcy proceeding, and the appeal was under 25a to the circuit court of appeals. Coder v. Arts, supra.
The question now propounded is: Was the trustee also entitled to a review in the circuit court of appeals, under 24b, by petition for review? Under that section authority, either interlocutory or final, is given to the circuit court of appeals to superintend and revise in matters of law the proceedings of the inferior courts of bankruptcy within their jurisdiction. We think this subdivision was not intended to give an additional remedy to those whose rights could be protected by an appeal under 25 of the act. That section provides a short method by which rejected claims can be promptly reviewed by appeal in the circuit court of appeals, and, in certain cases, in [224 U.S. 183, 188] this court. The proceeding under 24b, permitting a review of questions of law arising in bankruptcy proceedings, was not intended as a substitute for the right of appeal under 25. Coder v. Arts, supra, p. 233. Under 24b a question of law only is taken to the circuit court of appeals; under the appeal section, controversies of fact as well are taken to that court, with findings of fact to be made therein if the case is appealable to this court. We do not think it was intended to give to persons who could avail themselves of the remedy by appeal under 25 a review by petition under 24b. The object of 24b is rather to give a review as to matters of law, where facts are not in controversy, of orders of courts of bankruptcy in the ordinary administration of the bankrupt's estate.
In our judgment the rule was well stated in Re Mueller, 68 C. C. A. 349, 135 Fed. 711, by Mr. Justice Lurton, then Circuit Judge (p. 715):
We answer the question certified in the negative.