The Federal Reporter with Key-Number Annotations, Volume 250: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States, August-October, 1918. Page: 999
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IN RE GRAFF
of the property received by Johnson from the trustee in bankruptcy over
and above the payments made to creditors other than the alleged partners, all
such excess was for the benefit of Johnson's principals.
Although exact figures are not and apparently cannot be shown, it is clear
that Johnson's principals, regarded as creditors and not partners of Graff and
Nevins, were never paid in full; but they agreed (and this agreement was car-
ried out) that if they, through Johnson, received "all moneys or other things
constituting the estates in bankruptcy of said (Graff and Nevins), both as in-
dividuals and as copartners, then (i. e., on discharge of the bankrupts) in
the custody or control of the (bankruptcy) court or said trustee," they
and Graff and Nevins would exchange mutual releases of all and every claim
against each other. It is also clear that the trustee was to some extent at
all events aware of this settlement or compromise out of court, for he turned
over to the bankrupts certain land in Florida and jewelry of considerable
value which had been scheduled as assets.
On these facts the District Judge denied the application-to reopen, but in
the order of denial further directed that the former trustee should execute a
document validating the title of Nevins to the property alleged by the Trust
Company as the ground or reason for reopening the estate. Thereupon the
Trust Company took this petition.
Walter H. Merritt, of New York City (David W. Kahn, of New
York City, of counsel), for petitioner.
Watson & Jameson, of Brooklyn, N. Y. (J. Herbert Watson and
Michael M. Helfgott, both of Brooklyn, N. Y., of counsel), for Nevins.
Before WARD and HOUGH, Circuit Judges, and LEARNED
HAND, District Judge.
HOUGH, Circuit Judge [1, 2] The power of reopening estates
depends upon section 2, subd 8, of the Bankruptcy Act. The statute
presupposes that estates have been closed, and authorizes the court to
"reopen them whenever it appears that they were closed before being
fully administered." We have held in Re Goldman, 129 Fed. 212, 63
C. C. A. 370. that a motion to reopen is "addressed to the sound dis-
cretion" of the District Court, and in the same case pointed out that
such application should be made by creditors. This must follow from
the fact that the result of a reopening is the election of another trustee
-a matter in which creditors alone can act, in the first instance at all
 Proceedings upon petition to reopen need not be of a technical
nature nor of any especial formahty (Re Newton, 107 Fed. 431, 46 C.
C. A. 399); but there must be not only a reasonable prospect of unad-
ministered assets, but also evidence of creditors or other parties in
interest making the application who would and should be benefited by
 In this case the action of the lower court is, properly we think,
sought to be reviewed by petition to revise; a procedure entitling us to
correct its action only in matters of law. As the proceeding is in its
nature discretionary, our power to review is limited to considering
whether there was abuse of discretion.
 The error insisted on is that the order complained of pre-
vented the creation of a new trustee who might raise the question, in
a plenary suit or otherwise, that Graff and Nevins, or one of them, had
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The Federal Reporter with Key-Number Annotations, Volume 250: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States, August-October, 1918., legislative document, 1918; Saint Paul, Minnesota. (digital.library.unt.edu/ark:/67531/metadc38821/m1/1014/: accessed March 24, 2017), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.