In re Soloway & Katz, No. 83

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No. 83 | 2d Cir. | Jan 13, 1914

COXE, Circuit Judge.

[1,2] The two objecting creditors have never had their day in court. The specifications of the Bay State Milling Company were not considered by the referee because he did not regard the filing and service thereof as regular. The amendments proposed by the Star and Crescent Company were disallowed for the reason as stated by the referee:

“That a very large majority of the claims were opposed to allowing an amendment, and I consider it as very questionable whether I have any right to allow an amendment, either as referee or as special master.”

It is entirely possible that the proposed composition is for the best interests of the creditors and that the opposition of the two creditors named is captious and, perhaps, vexatious. Nevertheless, we think they are entitled to be heard. The objection that the specifications of the Bay State Company were not filed with the referee within ten days after January 2d, because they were left with a clerk in his office on January 11th, after the referee had gone out, the said clerk not being the clerk designated by the referee as the person upon whom service could be made, seems to us unnecessarily harsh, especially so as the 12th of January was Sunday and the referee received the specifications on the Monday following. Furthermore the specifications were not served upon the attorney for the bankrupts within ten days after the return day, as required by rule 9 of the District Court of Connecticut, but three days later. It was, however, within the discretion of the District Court to relieve the creditor from the requirements of its own rule.

*335The action of the District Judge was intended to give the objecting creditors an opportunity to be heard on the merits. It was surely within his discretion to do this. He has made no definitive decision as to the legality or propriety of the composition, but has simply rendered it possible for the objecting creditors to state their case upon the merits to the referee and, if his decision be adverse, to review it upon a record which fully states the facts.

The order is affirmfed.