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IN RE SEELEY TUBE & BOX CO.

April 2, 1954

In re SEELEY TUBE & BOX CO.


The opinion of the court was delivered by: MODARELLI

The decisive issue to be decided is: Whether there was a timely filing by the United States of its claim, as set forth by the Referee in his Certificate of Review.

 On October 1, 1946, debtor filed its Petition and Schedules for an arrangement under Chapter XI, wherein it proposed to pay all general unsecured creditors whose claims were $ 1,000 or less 100% immediately upon confirmation of the arrangement, and to pay all other general unsecured creditors 100% six months after the confirmation. On that same day, Judge Smith of this Court adjudged that the petition had been properly filed under Section 322 of the Act, and having read the petition 'proposing an arrangement with its unsecured creditors, and the Court being satisfied with the sufficiency of' the application, ordered the matter referred to a Referee. On March 17, 1947, the Referee's order appointing the Distributing Agent, recited that the Court of Bankruptcy conducted a meeting of debtor's creditors 'on due notice to all creditors and other parties in interest;' that at the meeting, debtor filed 'written acceptances of creditors on the proposed amended arrangement;' that the court considered the amended arrangement and 'upon the further consideration of all matters and things required under the provisions of Chapter XI' of the Act, ordered debtor to file its application to confirm the amended arrangement on or before March 19, 1947; and the court fixed March 21, 1947, before the Referee 'as the time and place for the consideration of the confirmation of said amended arrangement, or any objection which may be filed thereto.' On March 21, 1947, the Referee's order confirming the amended arrangement recited that 'no written objections have been filed by any creditors or by any parties in interest to the confirmation of said amended arrangement.'

 Thereafter, the United States' claim was filed on May 9, 1947, nearly two months subsequent to the date of the confirmation order. Debtor's argument is based on Sections 367(4) and 369 of the Act, which provide, in substance, that the case before the Referee shall be dismissed when the arrangement is confirmed, except as to three types of debts, as to which jurisdiction shall be retained, viz., debts which

 1. have been proved, but not allowed or disallowed, prior to the date of confirmation; or

 2. are disputed or unliquidated, have been scheduled by the debtor, and are proved within such time as the court may direct; or

 3. arise from the rejection of executory contracts by the debtor and are proved within such time as the court may direct.

 The debtor argues that the proceeding terminates, except as to any of the above classified debts, when the order of confirmation is signed, as does the jurisdictional power of the court. Since the United States' claim is not such a classified debt, our jurisdiction terminated on March 21, 1947, the date of the confirming order, and that the filing date by the United States on May 9, 1947, was untimely, as a result of which the claim must be barred.

 It was held in Carolina Motor Express Lines, Inc. v. Blue & White Service, Inc., 7 Cir., 1951, 192 F.2d 89, 92, that there is no provision in the Bankruptcy Act

 '* * * which expressly or by implication gives to our district courts power or authority to extend the time for filing the plan of arrangement proposed by the debtor, or the statement of his executory contracts, or the schedules and statement of affairs required by the Act. * * *

 'The fact that in the Chandler Act * * * Congress deleted from sec. 74 of the Bankruptcy Act, regarding petitions for arrangement, the power there given district courts to extend the time for filing schedules and statements required in such proceedings, forces the conclusion that the District Court has no power to extend the time for filing such plans, statements and schedules in arrangement proceedings.'

 While in the Carolina Motor case, supra, schedules were not filed contemporaneously with the petition, and although an amendment effective October 7, 1952, c. 579, § 29, 66 Stat. 432, 11 U.S.C.A. § 724, now grants power to a district court to grant extensions of time for filing schedules under certain circumstances and for 'cause shown,' nevertheless the reasoning in that opinion applies to the case at bar where proper schedules were duly filed, i.e., the Act neither in 1947 nor now contains any provision for the type of informal, oral scheduling as is contended by the United States.

 The claim of the United States obviously is not one of the third types of debt as to which the court retains jurisdiction subsequent to the entering of the order of confirmation, viz., debts which 'arise from the rejection of executory contracts by the debtor and are proved within such time as the court may direct.' Exhibits A and B attached to the United States' brief are letters dated November 18, 1946 and November 19, 1946, addressed to debtor in Dover, New Jersey, sent by the Ordnance Department, Picatinny Arsenal, Dover, New Jersey, wherein the United States rejected the executory contracts: 'Pursuant to Article 5 of Contract (numbered in each letter), notification is hereby given that the right of the (debtor) to proceed with the delivery of the (containers) described in (contract sections) of said contract is terminated.' The United States argues that this court should spell out an estoppel against the debtor now claiming that the Referee retained jurisdiction of the claim of the United States. The transcript of the March 21, 1947 hearing clearly shows that Freeman and the Referee were mistaken in their belief that the claim did 'arise from the rejection of executory contracts by the debtor.' There is, however, no doctrine of law to the effect that where there was a mistaken belief as to jurisdiction over the subject matter, jurisdiction was thereby conferred where otherwise the court did not have it. If jurisdiction did not exist, as in the case at bar, it could not be conferred either by the consent of the parties, American Fire & Cas. Co. v. Finn, 1951, 341 ...


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