In re Levy

259 F. 314 | E.D. Pa. | 1919

On Petition to Vacate Order Reopening Estate.

DICKINSON, District Judge.

[1, 2] The order now asked to be vacated was made under clause 8 of section 2 of the Bankruptcy Act (Act July 1, 1898, c. 541, 30 Stat. 545 [Comp. St. § 9586]), which empowers the court, in the exercise of the jurisdiction conferred upon it as a court of bankruptcy, to reopen closed estates “whenever it appears they were closed before being fully administered.” The finding upon which the order was predicated was that unadministered assets of the estate had come to light. The petition to vacate is made on behalf of the bankrupt. He was granted his discharge. The prayer of his petition is based upon the averments that the order was made without notice to him, and that it was made upon the petition of persons not creditors of the estate. The latter averment is in turn based upon the distinction' that, although they were at one time creditors of the bankrupt, having not only provable but proved claims, yet as the bankrupt had been granted his discharge he had ceased to be a debtor, and ex vi termini they had ceased to be creditors. It is, of course, not denied that they have an interest in the assets of the bankrupt estate, but the distinction made is fortified by the further distinction that they have such interest qua owners, but not qua creditors. The latter distinction may be accepted without in any way carrying the consequence of a denial of the right of such creditors to apply for the reopening of the case. The attempt to distinguish between the status of a creditor before and after discharge may be met with the comment that they are creditors, within the meaning of and as defined in the bankruptcy statute, and with the further comment that the distinction sought to be made is for present purposes of no practical value. As the order to reopen is limited to distribution purposes, it in no way affects the bankrupt.

The prayer of the petition to vacate is denied.

On Motion to Vacate Restraining Order.

[3.-5] The petition to vacate was argued and perhaps filed under a misapprehension of the situation. The proceeding is in bankruptcy, and because of this not within the provisions of section 265 of the Ju - dicial Code (Act March 3, 1911, c. 231, 36 Stat. 1162 [Comp. St. § 1242]), or within the scope of equity rule 73 (198 Fed. xxxix, 115 C. C. A. xxxix). A motion to vacate or modify a restraining order is, how • ever, one which the court will always entertain. The only possible interest, however, which a bankrupt would have in unadministered assets, is by virtue of his claim to his exemption, or to deny the assets in question to be the assets of the bankrupt estate, by setting up that the assets are property acquired by the bankrupt after his discharge, or for some other reason. No ground for the vacation or modification of the restraining order is advanced, except that it was made without notice to the bankrupt. The averment of the truth of this fact is itself denied. We need make no findings upon this point, however, as on the face of the proceeding the bankrupt has no interest in the assets of the bankruptcy estate. On the face of the proceedings the property to be affected belongs to the estate, and not only does the bankrupt not aver an interest, but it is asserted in the answer, the facts set up in which are admitted for the purposes of this argument, that he has specifically withdrawn from and repudiated all claims to an ownership interest.

The prayer of the petition to vacate, etc., is denied.