The opinion of the court was delivered by: BYERS
Motion to confirm referee's report granting discharge.
There is opposition by the Peoples National Bank, a creditor whose claim has been expunged because barred by the Statute of Limitations, as announced in this proceeding in 2 Cir., 105 F.2d 157. That creditor urges that the court, of its own motion and in the public interest, should deny the motion.
Opposition is also voiced by the Superintendent of Banks of the State of New York, on behalf of the Bank of United States in liquidation. That bank is a creditor, for its attorney deposes that a claim was filed in the sum of $2,970 by the Superintendent, and the affidavit is not controverted for the bankrupt. That fact was not brought to the attention of the Circuit Court of Appeals, for its opinion recites (105 F.2d page 158): "No other claims were filed."
Reargument having been denied the Peoples Bank, the referee's report recites that on October 3, 1939, he granted the bankrupt's motion to dismiss the specifications of objection to discharge, which had been filed by the Peoples Bank. On the same day, the Superintendent appeared before the referee and "orally attempted to intervene in these proceedings and requested that he be permitted to proceed with the specifications of objection filed by the Peoples National Bank".
The referee states that, since the hearings had theretofore closed, the application was denied. The record indicates that on July 6, 1939, the referee, having been advised of a proposed petition for rehearing in the Circuit Court of Appeals, said: "The matter having been submitted on the record, I will fix September 19th, 1939, at 2 P.M. as the date of argument, submission of briefs and decision."
No later stenographic report has been submitted on this motion, notice of which was not given to the Superintendent.
The present status of the latter, however, as a creditor, not being questioned, it will be convenient to consider whether this court has the power to permit him to prosecute the objections, and if so, whether the case fairly invites its exercise.
It is obvious that, through adroit invocation of technical expedients, the bankrupt has successfully evaded a disposition on the merits of specifications of objection to his discharge, which comprehend allegations of serious import, and which, if sustained by the evidence, would result in a denial of his application.
Thus: That he concealed an interest in three different liquor corporations, one piece of real estate, and a substantial bank account; and that he testified falsely in these proceedings with reference to each of the foregoing matters.
With respect to the power of the court to deal with the situation, it is not seen why the proceedings before the referee could not have been reopened by him, at the instance of the Superintendent, on the very day that he announced his decision with respect to the Peoples Bank claim, or why that result may not be accomplished in the District Court, sitting in review of the referee's decision.
It was said by the Second Circuit Court of Appeals in Re Ruhlman, 279 F. 250, at page 252: "Creditors may be allowed, in the discretion of the court, to enforce objections filed and abandoned by other creditors. In re Houghton, Fed.Cas.No. 6,730."
See also Mazur v. Hirsch Shoe Co., 5 Cir., 46 F.2d 973; Schlicht v. DeGroot, 6 Cir., 38 F.2d 621; In re Reigel, D.C., 21 F.Supp. 565; In re Guilbert, D.C., 154 F. 676.
It is true that in the foregoing cases it appeared that the abandonment or withdrawal by the objecting creditor was for a selfish reason, but that does not remove those ...