257 F. 540 | 6th Cir. | 1918
This is an appeal from a judgment of the District Court. The question for decision is whether the petitioners should have been permitted to file and prove their claims against the bankrupt estate of R. H. Edelen. The court below adjudged that the claims were not provable, since they were not filed with the trustee within the time prescribed by section 57n, Bankruptcy Act of 1898 (Act July 1, 1898, c. 541, 30 Stat. 560 [Comp. St. § 9641]).
The material facts are undisputed, and are in substance as follows: The claimants and the bankrupt on March 7, 1912, by a written instrument guaranteed and agreed to pay to certain banks all sums of money advanced by the banks to or paid by them for Distillers’ Cooperage Company. Each of the signers of the agreement was bound for the whole amount of the indebtedness incurred by virtue of said written
“No one proved or attempted to prove any part of the claim now asserted against the estate within one year of the date of adjudication; no steps were taken by claimants or any one else within one year of the date of adjudication to liquidate any part of the claims asserted; and claimants are barred by section 57n of the Bankruptcy Act of 1898 from proving said claims or any part thereof.”
The litigation in the Nelson circuit court was a suit by the owner of the notes, on which judgments were based, against the claimants in this proceeding. The bankrupt, Edelen, was not a party thereto, nor were the judgments in those cases rendered" against him. Until that litigation was ended by the judgments against claimants, and they had paid off the same in whole or in part, the.y had no claim against'Edelen arising out of their obligation to the bank and their relations to each other. It is insisted that there is a real debt due and owing by the bankrupt, Edelen, to claimants under the instrument in question. That may or may not be true. There appears no obstacle to Edelen requiring such claim to be “liquidated by litigation.” It does not appear that his liability under the instrument has been admitted by him, nor has it been “liquidated by litigation.” If it is a claim which has not been “liquidated by litigation,” clearly it could not be proven, if presented after expiration of one year from adjudication. If the litigation in the Nelson circuit court, to which Edelen was not a party, did not hind him, that is, did not estop him from litigating either his liability to the bank, or from litigating with his co-obligors his liability to contribute,
Entertaining these views, we do not deem it necessary to construe the clause “within thirty days before or after the expiration of that' time,” found in section 57n.
Our conclusion is that the litigation in the case of the bank and others against claimants in the Nelson circuit court was not a “liquidation by litigation” of the claims now presented by claimants against the bankrupt estate of Edelen, within the meaning of section 57n of the Bankruptcy Act.
In so far as it may he thought that Page v. Rogers, 211 U. S. 575, 29 Sup. Ct. 159, 53 L. Ed. 332, Powell v. Leavitt, 150 Fed. 89, 80 C. C. A. 43, and other cases cited by appellants, are contra to the conclusion reached, we find nothing to support such contention. The facts there involved are materially different from the facts here, and the present case is clearly distinguished.
Affirmed, with costs.