The Federal Reporter with Key-Number Annotations, Volume 272: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States and the Court of Appeals in the District of Columbia, June-August, 1921. Page: 989
xx, 1023 p. ; 23 cm.View a full description of this legislative document.
Extracted Text
The following text was automatically extracted from the image on this page using optical character recognition software:
IN RE LOCUST BLDG. CO. VaU
(272 F.)
A. 91, and In re Grafton Gas & Electric Light Co. (D. C.) 253 Fed.
668, showing that under such circumstances the jurisdiction of the
bankruptcy court is complete and exclusive, both with respect to de.
termining the amount of any such claim and passing upon the validity
thereof, inasmuch as the property is in the possession of the trustee,
unless this court shall make an order allowing proceedings in the state
court or providing that the claim be liquidated therein. None of the
parties have cited to the court any authority for the proposition that,
in an action started subsequent to bankruptcy, the jurisdiction of the
state court should, as a matter of course, be respected, as it would be
if that jurisdiction had completely attached prior to the institution of
bankruptcy proceedings. In re Watts & Sachs, supra.
If the various parties in interest had been brought into an action un-
der the state statutes, by which all parties having any claim to the
title would be cut off, except those whose rights to the proceeds of sale
are fixed by the decree in foreclosure, where the title thus made would
be easier of investigation, and would clearly and conclusively determine
what liens exist against the property and should be transferred to the
fund, where their validity might be attacked by the trustee in bank-
ruptcy when they make claim thereto, there would be no reason why the
action in foreclosure should not proceed to the entry of the decree, if
the state court sees fit to proceed with the action and determine the
various issues presented on the pleadings.
If the state court did not deem it advisable, or was unable to proceed
with the liquidation of this claim and the determination of its validity,
within a reasonable time, the trustee could nevertheless in due course
proceed before the referee or this court to determine how the fund
should be distributed. But this court having already ordered the sale
of the property, free and clear of all claims, there being sufficient funds
admittedly to pay all liens, so that the security of a mortgage is un-
necessary for any purpose except to establish the lien, and particularly
where there are two prior mortgages, which are disputed, and as to
which the same issue will be presented as that to be litigated as to the
third mortgage, and where the issues as to these prior mortgages can-
not be determined in the present foreclosure action, this court is con-
strained to continue the stay against the foreclosure suit. Wabash
Railroad v. Adelbert College, 208 U. S. 38, 28 Sup. Ct. 182, 52 L. Ed.
379; Murphy v. John Hofman Co., 211 U. S 562, 29 Sup. Ct. 154,
53 L. Ed. 327.
In order to save time, and in view of the circumstances, the alleged
mortgagee may claim payment, and the issue raised by the trustee may
proceed to hearing pending the sale, if application is made in proper
form by either party therefor.
Upcoming Pages
Here’s what’s next.
Search Inside
This document can be searched. Note: Results may vary based on the legibility of text within the document.
Tools / Downloads
Get a copy of this page or view the extracted text.
Citing and Sharing
Basic information for referencing this web page. We also provide extended guidance on usage rights, references, copying or embedding.
Reference the current page of this Legislative Document.
The Federal Reporter with Key-Number Annotations, Volume 272: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States and the Court of Appeals in the District of Columbia, June-August, 1921., legislative document, 1921; Saint Paul, Minnesota. (https://digital.library.unt.edu/ark:/67531/metadc38843/m1/1011/: accessed April 24, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.