1. Section 67f of the Bankruptcy Act does not invalidate a lien
obtained by levy of an execution within the four months preceding
the filing of the petition in bankruptcy on which the judgment
debtor is adjudged a bankrupt if the debtor was in fact solvent
when the levy was made. P.
264 U. S. 429.
2. Congress has power to confer upon the bankruptcy court
jurisdiction to adjudicate the rights of trustees in bankruptcy to
property adversely claimed, even when not in the possession of the
bankruptcy court, and may determine to what extent jurisdiction
shall
Page 264 U. S. 427
be exercised by summary proceedings and to what extent by
plenary suit. Pp.
264 U. S. 430,
264 U. S.
438.
3. But the bankruptcy court has not been given jurisdiction by
summary proceedings or otherwise to avoid, under § 67f, a lien
created by levy of an execution under a judgment of a state court
within four months preceding the filing of the petition in
bankruptcy, where the property is in the actual possession of the
sheriff and neither he nor the judgment creditor has appeared in or
consented to adjudication by the bankruptcy court, and where the
claim of the creditor that the bankrupt was not insolvent at the
time of judgment and levy is not colorable, but substantially
supported.
Id.
4. Section 67f, in providing that the bankruptcy court may order
that a lien void as against the trustee shall be preserved for the
benefit of the estate, does not confer by implication jurisdiction
to determine whether the lien is void, but grants substantive
rights effected by means of subrogation. P.
264 U. S.
435.
286 F. 351 reversed.
Certiorari to a judgment of the circuit court of appeals
reversing, on petition to revise, an order of the district court in
bankruptcy which stayed a summary proceeding before the referee
brought by trustees in bankruptcy for the purpose of having an
execution declared void and to obtain possession of property upon
which it had been levied.
MR. JUSTICE BRANDEIS delivered the opinion of the Court.
Taubel-Scott-Kitzmiller Company, Inc., recovered in the supreme
court of the State of New York a judgment against Cowen Hosiery
Company, Inc. Execution thereon was levied upon personal property
of the defendant lying upon
Page 264 U. S. 428
premises occupied by it. The levy created a lien upon the
property. New York Civil Practice Act, § 679. The sheriff took, and
thereafter retained, exclusive possession and control of the
property. Within four months of the date of the levy, the Cowen
Company filed, in the Southern District of New York, a voluntary
petition in bankruptcy, and was adjudged a bankrupt. Relying upon
subdivision f
* of § 67 of the
Bankruptcy Act, the trustees sought, by a summary proceeding before
the referee, to have the lien on execution declared void and to
obtain possession of the property. The referee ordered that the
judgment creditor show cause before him why this should not be
done. Before the district court, the judgment creditor seasonably
challenged the jurisdiction of the referee and of the bankruptcy
court, furnished substantial support for its claim that the debtor
was solvent at the date of the entry of judgment and levy of
execution thereon, and insisted that, since the bankrupt did not
have, and the bankruptcy court did not acquire, possession of the
property, the execution lien and the right to possession under
Page 264 U. S. 429
the levy could not be assailed by the trustees, except by a
plenary suit in the appropriate forum. The trustees, on the other
hand, urged that the referee had jurisdiction even if the adverse
claim by the judgment creditor be deemed a substantial one. The
district court sustained the contention of the judgment creditor
and stayed the proceeding before the referee. Upon a petition to
revise, its order was reversed by the circuit court of appeals. 286
F. 351. The case is here on writ of certiorari. 260 U.S. 719.
A trustee seeking to have declared void, under subdivision "f"
of § 67, a lien obtained through legal proceedings and to recover
possession of property may be confronted with an adverse claim upon
several grounds. It may be asserted that the lien attacked is of a
character different from those provided for in that subdivision;
[
Footnote 1] or, although the
lien (
i.e., that obtained by levy of execution) is clearly
one to which subdivision "f" applies, that it is valid by reason of
other facts, for the statute does not, as a matter of substantive
law, declare void every lien obtained through legal proceedings
within four months of the filing of the petition in bankruptcy. The
lien may be valid because the debtor was in fact solvent at the
time the levy was made, [
Footnote
2] or, although the debtor
Page 264 U. S. 430
was then insolvent, because the property had passed into the
hands of a
bona fide purchaser; [
Footnote 3] or, although the debtor was then insolvent
and the levy was made within the four months, because inchoate
rights by way of lien had been acquired earlier. [
Footnote 4] As the establishment of any one
of these facts would bar recovery by the trustee, their assertion
presents a judicial question. In this case, since the possession of
the sheriff was the possession of the state court, the trustees'
claim to the property would, under general principles of law, have
to be litigated in the state court. [
Footnote 5] The question for decision is: has Congress
conferred upon the bankruptcy court, under these circumstances,
jurisdiction to adjudicate the controverted rights by summary
proceedings?
Congress has, of course, power to confer upon the bankruptcy
court jurisdiction to adjudicate the rights of trustees to property
adversely claimed. In matters relating to bankruptcy its power is
paramount. [
Footnote 6] Hence,
even if the property is not within the possession of the bankruptcy
court, Congress can confer upon it, as upon any other lower federal
court, jurisdiction of the controversy by conferring jurisdiction
over the person in
Page 264 U. S. 431
whose possession the property is. Congress has also (subject to
the constitutional guaranties) power to determine to what extent
jurisdiction conferred, whether through possession of the
res or otherwise, shall be exercised by summary
proceedings, and to what extent by plenary suit. [
Footnote 7] But Congress did not, either by §
2, § 23 of the Bankruptcy Act of 1898, or any other provision of
the act confer generally such broad jurisdiction over claims by a
trustee against third persons. [
Footnote 8] Nor has it provided in terms that a
substantial adverse claim to property which is not in the
possession of the bankruptcy court, and which is demanded by the
trustee under subdivision "f" of § 67, may be litigated, without
consent, by a summary proceeding. To sustain the judgment under
review, a specific grant of power to so deal with such a
controversy must be shown. The contention is that a specific grant
of the power is implied in a clause contained in subdivision "f."
Before examining the clause, it will be helpful to consider the
rules, established by decisions of this Court, governing like
proceedings under provisions of the Bankruptcy Act cognate to
subdivision "f" of § 67.
The Bankruptcy Act provides, in subdivision "e" of § 67, in
subdivision "b" of § 60, and in subdivision "e" of § 70, for the
recovery by the trustee of property formerly belonging
Page 264 U. S. 432
to the bankrupt and which, within four months of the
commencement of the proceedings in bankruptcy, had been subjected,
in some manner, to a lien. The substantive rights of the trustee
under these provisions differ according to the nature of the lien
or of the infirmity therein. Under subdivision "e" of § 67, where
the lien was created
in pais, it is voidable if it was
made, within the four months, with the intent to hinder and defraud
creditors, or if, within that period, it was made while insolvent
under such circumstances that, under the laws of the state where
the property is situated, it is void as to creditors. Under
subdivision "b" of § 60, the lien is voidable, whether it was
created
in pais or through legal proceedings, if it was
created within the four months while the debtor was insolvent and
the effect of its enforcement would be to give a preference. Under
subdivision "e" of § 70, a lien, however created, although not
within the four months, is voidable by the trustee if any creditor
of the bankrupt might have avoided it. But the adjective rights of
the trustee to litigate in the bankruptcy court claims incident to
the lien were the same under these differing provisions.
By the Act of 1898, as originally enacted, the power of the
bankruptcy court to adjudicate, without consent, controversies
concerning the title, arising under either § 67e or § 60b, or §
70e, was confined to property of which it had possession. The
possession, which was thus essential to jurisdiction, need not be
actual. Constructive possession is sufficient. It exists where the
property was in the physical possession of the debtor at the time
of the filing of the petition in bankruptcy, but was not delivered
by him to the trustee; [
Footnote
9] where the property was delivered to the trustee, but was
there after wrongfully withdrawn from
Page 264 U. S. 433
his custody; [
Footnote
10] where the property is in the hands of the bankrupt's agent
or bailee; [
Footnote 11]
where the property is held by some other person who makes no claim
to it; [
Footnote 12] and
where the property is held by one who makes a claim, but the claim
is colorable only. [
Footnote
13] As every court must have power to determine, in the first
instance, whether it has jurisdiction to proceed, the bankruptcy
court has, in every case, jurisdiction to determine whether it has
possession actual or constructive. [
Footnote 14] It may conclude, where it lacks actual
possession, that the physical possession held by some other persons
is of such a nature that the property is constructively within the
possession of the court. [
Footnote 15]
Wherever the bankruptcy court had possession, it could, under
the Act of 1898 as originally enacted, and can now, determine in a
summary proceeding controversies involving substantial adverse
claims of title under subdivision "e" of § 67, under subdivision
"b" of § 60 and under subdivision "e" of § 70. [
Footnote 16] But, in no case where it
lacked possession
Page 264 U. S. 434
could the bankruptcy court, under the law as originally enacted,
nor can it now (without consent), adjudicate in a summary
proceeding the validity of a substantial adverse claim. [
Footnote 17] In the absence of
possession, there was under the Bankruptcy Act of 1898, as
originally passed, no jurisdiction, without consent, to adjudicate
the controversy even by a plenary suit. [
Footnote 18] The Act of February 5, 1903, c. 487, § 8,
32 Stat. 797, 798, 800, together with the Act of June 25, 1910, c.
412, § 7, 36 Stat. 838, 840, conferred upon the bankruptcy court
jurisdiction, under certain circumstances, against the adverse
claimant, in a plenary suit under § 60, subdivision "b," § 67,
subdivision "e," and § 70, subdivision "e." But no amendment has
conferred upon the bankruptcy court jurisdiction, even in a plenary
suit, of proceedings under subdivision "f" of § 67.
The controversy presented when a trustee proceeding under
subdivision "f" of § 67 is confronted with a substantial adverse
claim to property not in his possession, does not differ in
character from that presented by like proceedings under the other
sections discussed. No reason is suggested why the Act of 1898
should have granted to the bankruptcy court jurisdiction in cases
arising under § 67, subdivision "f," while it did not in like cases
arising under these other provisions. Nor is any reason suggested
why Congress should have granted by that act power to adjudicate
the controversy arising under subdivision "f" of § 67 in
Page 264 U. S. 435
a summary proceeding, while it has never permitted a like
controversy arising under any of the other provisions discussed
above to be dealt with otherwise than in a plenary suit. [
Footnote 19]
The contention that Congress did confer upon the bankruptcy
court the exceptional jurisdiction to determine in a summary
proceeding substantial adverse claims arising under subdivision
"f," concerning the title and possession of property not in its
possession, rests wholly on the following clause of that
subdivision:
"the property affected by the levy [held void] shall pass to the
trustee as a part of the estate of the bankrupt, unless the court
shall, on due notice, order that the right under such levy . . .
shall be preserved by the trustee for the benefit of the estate as
aforesaid. And the court may order such conveyance as shall be
necessary to carry the purposes of this section into effect."
The argument is that, since the bankruptcy court is expressly
empowered to order that a lien void as against the trustee shall be
preserved for the benefit of the estate, it was given, by
implication, jurisdiction to determine whether the lien is void.
The argument proceeds upon a misapprehension of the nature and
purpose of the clause in question. It does not confer jurisdiction.
It confers substantive and adjective rights. Its grant of
substantive rights, effected by means of subrogation, is a grant of
property interests which the bankrupt did not own at the
Page 264 U. S. 436
time of filing the petition. [
Footnote 20] Thus, an execution lien upon property, owned
by the debtor at the time of the levy and good as against a
subsequent purchaser but void as against the trustee under
subdivision "f," may be preserved for the benefit of the estate. If
the lien were not so preserved, the benefit resulting from
nullifying it would enure to the purchaser. Subrogation is the
process by which this substantive right is made available.
[
Footnote 21] Where the
bankrupt remained owner of the property until the commencement of
the bankruptcy proceedings and the void lien remained the only
incumbrance on the property, there is no need of preserving it.
But, in such a case, it may be desirable to invoke the strictly
adjective powers conferred by the clause, and to apply for an order
that a release or conveyance be made so as to remove a could upon
title. [
Footnote 22]
The substantive right of subrogation which the clause confers
can come into effect only after the invalidity of the lien as
against the trustee has been established either by an admission of
the holder of the lien or by an adjudication. It is entirely
immaterial, so far as concerns the enjoyment of the right of
subrogation, in which of
Page 264 U. S. 437
these ways the invalidity is established. It is entirely
immaterial whether it is established by an adjudication, whether it
be that of a state court, the bankruptcy court, or of the federal
district court sitting at law or equity. In every case in this
Court in which this right to subrogation has been exercised (and in
most cases in the lower courts), [
Footnote 23] following an adjudication of invalidity made
by the bankruptcy court, there had been either consent that
jurisdiction be taken for that purpose [
Footnote 24] or there was possession of the res by
that court. [
Footnote
25]
Page 264 U. S. 438
In this case, the sheriff had, before the filing of the petition
in bankruptcy, taken exclusive possession and control of the
property, and he had retained such possession and control after
adjudication and the appointment of the trustees. [
Footnote 26] The bankruptcy court therefore
did not have actual possession of the
res. The adverse
claim of the judgment creditor was a substantial one. The
bankruptcy court therefore did not have constructive possession of
the
res. Neither the judgment creditor nor the sheriff had
become a party to the bankruptcy proceedings. [
Footnote 27] There was no consent to the
adjudication by the bankruptcy court of the adverse claim. The
objection to the jurisdiction was seasonably made, and was insisted
upon throughout. The bankruptcy court therefore did not acquire
jurisdiction over the controversy in summary proceedings. Nor did
it otherwise.
Reversed.
*
"f. That all levies, judgments, attachments, or other liens,
obtained through legal proceedings against a person who is
insolvent at any time within four months prior to the filing of a
petition in bankruptcy against him shall be deemed null and void in
case he is adjudged a bankrupt, and the property affected by the
levy, judgment, attachment, or other lien shall be deemed wholly
discharged and released from the same, and shall pass to the
trustee as a part of the estate of the bankrupt, unless the court
shall, on due notice, order that the right under such levy,
judgment, attachment, or other lien shall be preserved for the
benefit of the estate, and thereupon the same may pass to and shall
be preserved by the trustee for the benefit of the estate as
aforesaid. And the court may order such conveyance as shall be
necessary to carry the purposes of this section into effect:
Provided, that nothing herein contained shall have the
effect to destroy or impair the title obtained by such levy,
judgment, attachment, or other lien, of a
bona fide
purchaser for value who shall have acquired the same without notice
or reasonable cause for inquiry."
[
Footnote 1]
Henderson v. Mayer, 225 U. S. 631.
Compare City of Richmond v. Bird, 249 U.
S. 174,
249 U. S. 175;
In re Emslie, 102 F. 291;
In re Lillington Lumber
Co., 132 F. 886;
In re Robinson & Smith, 154 F.
343;
Kemp Lumber Co. v. Howard, 237 F. 574, 577;
American Trust & Savings Bank v. Ruppe, 237 F.
581.
[
Footnote 2]
See Simpson v. Van Etten, 108 Fed.199, 201;
Stone-Ordean-Wells Co. v. Mark, 227 F. 975, 977;
Martin v. Oliver, 260 F. 89, 93;
In re Community
Stores of Iowa, 282 F. 328, 329. Cases like
Cook v.
Robinson, 194 F. 785, 792, and
In re Arizona Smelting
Co., 231 F. 87, 92, to the contrary are not consistent with
the express words of the act. In
Clarke v. Larremore,
188 U. S. 486, it
appeared (
see original papers) that there was no
contention that the bankrupt was solvent at the time of the levy.
In
Hutchinson v. Otis, 190 U. S. 552, it
was agreed (
see original papers) that the debtor was
insolvent at the date of the attachment. In
Chicago, Burlington
& Quincy R. Co. v. Hall, 229 U. S. 511,
229 U. S. 514,
it is found that the debtor was insolvent at the time of the
garnishment.
See In re Ann Arbor Machine Co., 278 F. 749,
752. As against an adverse claimant, the mere adjudication of
bankruptcy does not, even in involuntary proceedings, conclusively
establish insolvency at the date of the attachment or levy.
Compare Gratiot State Bank v. Johnson, 249 U.
S. 246.
[
Footnote 3]
Jones v. Springer, 226 U. S. 148.
[
Footnote 4]
Metcalf v. Barker, 187 U. S. 165;
Pickens v. Roy, 187 U. S. 177.
[
Footnote 5]
Taylor v.
Carryl, 20 How, 583,
61 U. S. 595;
Covell v. Heyman, 111 U. S. 176,
111 U. S. 179.
Compare Lion Bonding & Surety Co. v. Karatz,
262 U. S. 77,
262 U. S.
88-90.
[
Footnote 6]
In re Watts & Sachs, 190 U. S.
1,
190 U. S. 27;
Robertson v. Howard, 229 U. S. 254.
[
Footnote 7]
It has not done so in terms. In the absence of congressional
definition of the scope of summary proceedings, it has been
determined by decisions of this Court and the General Orders in
Bankruptcy. The bankruptcy court may deal by summary proceeding
with property in its possession in all matters administrative in
their nature, and also with all matters judicial in their nature,
to the extent commonly practiced in courts of equity.
See
United States Fidelity & Guaranty Co. v. Bray,
225 U. S. 205,
225 U. S. 217;
Robertson v. Howard, 229 U. S. 254,
229 U. S.
260.
[
Footnote 8]
Harris v. First National Bank, 216 U.
S. 382;
Park v. Cameron, 237 U.
S. 616;
Kelley v. Gill, 245 U.
S. 116.
Compare Lovell v. Newman, 227 U.
S. 412.
[
Footnote 9]
Page v. Edmunds, 187 U. S. 596.
[
Footnote 10]
White v. Schloerb, 178 U. S. 542;
Fairbanks Shovel Co. v. Wills, 240 U.
S. 642.
Compare Pirie v. Chicago Title & Trust
Co., 182 U. S. 438,
182 U. S. 442;
Acme Harvester Co. v. Beekman Lumber Co., 222 U.
S. 300,
222 U. S.
307.
[
Footnote 11]
Mueller v. Nugent, 184 U. S. 1,
184 U. S. 15.
[
Footnote 12]
Babbitt v. Dutcher, 216 U. S. 102,
216 U. S.
105.
[
Footnote 13]
Compare In re Weinger, Bergman & Co., 126 F. 875;
In re Rudnick & Co., 158 F. 223;
In re
Ransford, 194 F. 658, 663;
In re Columbia Shoe Co.,
289 F. 465.
[
Footnote 14]
Hebert v. Crawford, 228 U. S. 204.
Compare Noble v. Union River Logging R. Co., 147 U.
S. 165,
147 U. S. 173;
Schweer v. Brown, 195 U. S. 171;
In re Kramer, 218 F. 138, 141.
[
Footnote 15]
In re Weinger, Bergman & Co., 126 F. 875;
In re
Eddy, 279 F. 919.
Compare In re Rockford Produce &
Sales Co., 275 F. 811;
also In re Yorkville Coal Co.,
211 F. 619;
In re Goldstein, 216 F. 887;
In re
Goldstein, 216 F. 889.
[
Footnote 16]
Murphy v. John Hofman Co., 211 U.
S. 562,
211 U. S. 569;
Hebert v. Crawford, 228 U. S. 204;
Weidhorn v. Levy, 253 U. S. 268,
253 U. S.
271-272;
Board of Trade of Chicago v. Johnson,
ante, 264 U. S. 1.
Compare Whitney v. Wenman, 198 U.
S. 539,
198 U. S. 553;
Matter of Loving, 224 U. S. 183;
Houghton v. Burden, 228 U. S. 161;
Lazarus v. Prentice, 234 U. S. 263.
[
Footnote 17]
Louisville Trust Co. v. Comingor, 184 U. S.
18;
Jaquith v. Rowley, 188 U.
S. 620;
First National Bank v. Chicago Title &
Trust Co., 198 U. S. 280,
198 U. S. 289;
Galbraith v. Vallely, 256 U. S. 46. In
Bryan v. Bernheimer, 181 U. S. 188,
181 U. S. 197,
there was consent to the jurisdiction.
[
Footnote 18]
Bardes v. Hawarden Bank, 178 U.
S. 524;
Mitchell v. McClure, 178 U.
S. 539;
Wall v. Cox, 181 U.
S. 244;
Frank v. Vollkommer, 205 U.
S. 521;
Wood v. Wilbert's Sons Co.,
226 U. S. 384,
226 U. S. 389.
Compare Hicks v. Knost, 178 U. S. 541;
Bush v. Elliott, 202 U. S. 477;
Lovell v. Newman, 227 U. S. 412;
Collett v. Adams, 249 U. S. 545;
Flanders v. Coleman, 250 U. S. 223.
[
Footnote 19]
The Act of 1841 (5 Stat. 440) was said, in
Ex parte
City Bank, 3 How. 292,
44 U. S. 312,
to have conferred upon the bankruptcy court jurisdiction over
adverse claims, although the property was not in its possession,
and it was also said that this jurisdiction might be exercised by
summary proceeding.
But see Bardes v. Hawarden Bank,
178 U. S. 524,
178 U. S.
533-534. The Act of 1867 (14 Stat. 517) conferred the
jurisdiction upon the federal District and Circuit Courts, but
required that the jurisdiction be exercised in a plenary suit.
Smith v.
Mason, 14 Wall. 419;
Marshall
v. Knox, 16 Wall. 551;
Lathrop v. Drake,
91 U. S. 516.
[
Footnote 20]
First National Bank v. Staake, 202 U.
S. 141,
202 U. S. 148;
McHarg v. Staake, 202 U. S. 150.
Compare In re Hammond, 98 F. 845.
[
Footnote 21]
The void lien is not preserved for the estate unless the trustee
requests that it be done.
See Goodnough Mercantile & Stock
Co. v. Galloway, 171 F. 940;
In re Walsh Bros., 195
F. 576;
In re Prentice, 267 F. 1019, 1020.
Compare
Thompson v. Fairbanks, 196 U. S. 516,
196 U. S.
527-528;
Duffy v. Charak, 236 U. S.
97,
236 U. S. 100.
The occasion for seeking subrogation under this clause of § 67,
subdivision "f," has been lessened by the amendment to § 47, clause
2, of subdivision "a" of the Act of June 25, 1910, c. 412, § 8, 36
Stat. 838, 840, by which a trustee in bankruptcy
"as to all property in the custody or coming into the custody of
the bankruptcy court, shall be deemed vested with all the rights,
remedies, and powers of a creditor holding a lien by legal or
equitable proceedings."
Compare Bailey v. Baker Ice Machine Co., 239 U.
S. 268,
239 U. S.
276.
[
Footnote 22]
Compare Chapman v. Brewer, 114 U.
S. 158,
114 U. S.
170-171;
De Friece v. Bryant, 232 F. 233,
239.
[
Footnote 23]
Invalidity was admitted in
First National Bank v.
Staake, 202 U. S. 141,
202 U. S. 143;
in
Rock Island Plow Co. v. Reardon, 222 U.
S. 354,
222 U. S. 356,
and in
Fallows v. Continental & Commercial Trust &
Savings Bank, 235 U. S. 300
(
see original papers).
Compare Miller v. New Orleans
Fertilizer Co., 211 U. S. 496. It
was admitted or assumed in
In Re Alabama Coal & Coke
Co., 210 F. 940, 942;
Bell v. Frederick, 282 F. 232,
233.
Compare In re Francis-Valentine Co., 93 F. 953, 954;
In re Hammond, 98 F. 845, 859;
Bear v. Chase, 99
F. 920, 924;
In re Lesser, 100 F. 433, 438;
In re
Kemp, 101 F. 689, 690;
In re Breslauer, 121 F. 910,
913, 914;
In re Petersen, 200 F. 739, 741;
In re
Obergfoll, 239 F. 850;
In re Community Stores, 282 F.
328;
In re Chebot, 288 F. 1006.
[
Footnote 24]
Objections to the jurisdiction of the bankruptcy court were at
first raised, but later withdrawn, and express consent given, in
Clarke v. Larremore, 188 U. S. 486 (as
the original papers disclose);
First National Bank v.
Staake, 202 U. S. 141
(
see 126 F. 845, 846);
Rock Island Plow Co. v.
Reardon, 222 U. S. 354,
222 U. S. 356;
Globe Bank & Trust Co. v. Martin, 236 U.
S. 288,
236 U. S. 293;
also
In re Porterfield, 138 Fed.192, 197. In other cases,
the objection to the jurisdiction was waived, or the existence of
jurisdiction was assumed.
See In re Beals, 116 F. 530,
534;
In re Southern Arizona Smelting Co., 231 F. 87, 89;
Jones v. Ford, 254 F. 645, 646;
In re Dukes, 276
F. 724;
In re Ann Arbor Machine Co., 278 F. 749, 751.
Compare Knapp v. Milwaukee Trust Co., 216 U.
S. 545,
216 U. S. 552;
also
Wells v. Sharp, 208 F. 393, 396;
In re
Brantman, 244 F. 101, 104;
In re Rockford Produce &
Sales Co., 275 F. 811, 814.
[
Footnote 25]
The property was in the actual possession of the bankruptcy
court at the time of the adjudication of the adverse claim in
Fallows v. Continental Savings Bank, 235 U.
S. 300,
235 U. S.
303-304. Also In re Fitzhugh Hall Amusement Co.,
228
F. 169, 171; 230 F. 811. Compare Henderson v. Mayer,
225 U. S. 631,
225 U. S. 632.
In some other cases where subrogation was ordered, the bankruptcy
court was deemed to have constructive possession because the claim
of the person in actual possession was held to be colorable.
See In re Weinger, Bergman & Co.,
126 F. 875; In re
Graessler & Reichwald, 154 F. 478.
[
Footnote 26]
The fact that the property remained on premises formerly
occupied by the bankrupt is, of course, immaterial.
Compare
Duffy v. Charak, 236 U. S. 97,
236 U. S. 98;
In re Rhoads, 98 F. 399, 400.
[
Footnote 27]
Compare Gratiot State Bank v. Johnson, 249 U.
S. 246,
249 U. S.
249.