DAVID L. SKINNER & CO., Inc., et al. v. HITCHCOCK et al., 67 F.2d 68

WILSON, Circuit Judge. This ease originally came before this court on a petition for leave to appeal. While no transcript of the record in the District Court was filed with the petition, the facts on which the alleged erroneous ruling of the District Court was made are simple, and at the time of the hearing on the petition for leave to appeal were orally stated to this court by the parties.

The petition for appeal was allowed and opportunity given the petitioner to file a transcript of the record in the District Court, and ten days given to each party in which to file briefs after the filing of the transcript with the clerk of this court. This has been done. No new facts other than those agreed upon by the parties at the time of the hearing on the petition, or any new authorities cited in the briefs filed within the ten-day period in addition to those cited in the brief filed by the receivers in opposition to the granting of the petition, appear.

It now appears from the record that the only issues of fact raised by the answers to the petition in bankruptcy are: Whether

an act of bankruptcy was committed by the appointment of a receiver in the state courts for the Nantasket Steamboat Company because of its insolvency; whether it was insolvent on the date of the filing of the petition in bankruptcy; and whether two of the three petitioning creditors participated in the state receivership proceedings to the extent of estopping them from joining in such petition. Of course, no facts bearing on these issues are found in the record. Neither do any grounds appear therein on which the motion for postponement of the hearing was based.

The single issue of law raised by the assignment of errors is whether an order of the District Court continuing the hearing on the issues raised on the petition in bankruptcy and answers thereto filed June 12, 1933, until after September 15, 1933, without fixing any definite date for such hearing, is in compliance with

section 18d of the Bankruptcy Act (11 USCA § 41 (d), which requires the issue thus raised to be determined “as soon as may be.” The order of the District Court, which is the basis of the appeal, issued on motion of the appellees that the hearing on the issued thus raised “be continued until on or about September 15,1933,” and against the protest of the appellants, is as follows: “Upon the foregoing motion, after hearing William Harold Hitchcock, petitioner, and C.

Harold Baldwin of counsel for the petitioning creditors, “It is ordered that hearing be continued until after September 15,1933.” It may be that, by the time this opinion is filed, the question raised by the assignment of errors will have become of little concern to the parties to the cause, but an

interpretation of

section 18d of the act is essential for the future guidance of both court and counsel. It is undoubtedly true that some discretion is permitted the District Court under

section 18d of the act in fixing the time of hearing on the issues raised by a petition in bankruptcy and answer thereto, yet it is perfectly clear that Congress intended by the provisions of the act to have the issue of bankruptcy determined at an early date. The reasons therefor are so plain as not even to require a statement thereof. While this court cannot control a proper exercise of judicial discretion by the District Court in such cases, it is of the opinion that the postponement of such hearing to an indefinite date more than three months after the filing of an answer is a clear abuse of the discretion vested in the District Court under the

section above referred to. Adams v. Foster, 5 Cush. (Mass.) 156; Bentley v. Ward, 116 Mass. 333; Silverstein v. Daniel Russell Boiler Works, Inc., 254 Mass. 137, 149, 149 N. E. 795. To approve of such an order would, in effect, defeat the obvious purpose of

section 18d of the act. The order of the District Court is reversed, and the case is remanded to that court for further proceedings not inconsistent with this opinion.