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KNAPP v. MILWAUKEE TRUST COMPANY

decided: March 7, 1910.

KNAPP
v.
MILWAUKEE TRUST COMPANY, TRUSTEE OF THE ESTATE OF STANDARD TELEPHONE & ELECTRIC COMPANY, BANKRUPT.



APPEAL FROM THE CIRCUIT COURT OF APPEALS FOR THE SEVENTH CIRCUIT.

Author: Day

[ 216 U.S. Page 552]

 MR. JUSTICE DAY delivered the opinion of the court.

The Standard Telephone and Electric Company, a Wisconsin corporation, was adjudicated a bankrupt in the District Court of the United States for the Eastern District of Wisconsin. Under its articles of association is was authorized to carry on the business of selling appliances for telephone purposes and operating telephone exchanges. It had established and was operating a telephone exchange at the village of Sheridan, Wisconsin, and was carrying on the business of manufacturing and selling telephone apparatus in the city of Milwaukee, Wisconsin, where it had a stock in trade and trade fixtures. The trustee in bankruptcy filed a petition to sell all the property of the bankrupt. Appellant Knapp, as trustee of certain mortgages, given by the telephone company; intervened, and asked to have the lien of the mortgage established as the first lien on the property and satisfied out of the proceeds of the sale. The property was sold, and the question is as to the lien of these mortgages upon the fund.

The trustee in bankruptcy answered the petition of Knapp, trustee under the mortgage, averring that it was a chattel mortgage, and fraudulent and void as to creditors, because of certain agreements contained therein, because it was on after-acquired property, and because of the failure to file an affidavit of renewal as required by the Wisconsin statutes. The referee in bankruptcy found the facts, and held the mortgage void. Upon hearing, the District Judge reached a like conclusion. 157 Fed. Rep. 106.

The Circuit Court of Appeals of the Seventh Circuit upon appeal affirmed the decree of the District Court, holding the mortgage void for the reasons set forth at large in the opinion of the District Judge. 162 Fed. Rep. 675.

A motion has been filed to dismiss the appeal for want of findings of fact and conclusions of law in the Circuit Court of Appeals, as required by General Order in Bankruptcy XXXVI. Whether or not such a finding of facts was required depends

[ 216 U.S. Page 553]

     upon the character of the present proceeding. General Order in Bankruptcy XXXVI, authorized under subdivision b of § 25 of the Bankruptcy Act, provides for appeals under the act to this court from the Circuit Court of Appeals within thirty days after the judgment or decree, and for the making and filing of a finding of facts and conclusions of law separately stated, and that the record upon such appeal shall consist only of the pleadings, the judgment or decree, the finding of facts, and conclusions of law.

Section 25b provides for appeals from any final decision of a Court of Appeals allowing or rejecting a claim under the act, under such rules and within such time as may be prescribed by the Supreme Court of the United States. Such appeals are allowed when the amount in controversy exceeds the sum of $2,000, and the question involved might have been taken by appeal or writ of error from the highest court of a State to the Supreme Court of the United States; or where some Justice of the Supreme Court of the United States shall certify that, in his opinion, the determination of the question or questions involved in the allowance or rejection of such claim is essential to a uniform construction of the Bankruptcy Act throughout the United States.

Under authority of subdivision b, § 25, General Order XXXVI was adopted, and in the cases enumerated a finding of facts and conclusions of law must be made in the Circuit Court of Appeals, and the appeal taken within thirty days after the entry of the judgment of decree.

The case at bar is not of that class; it is an intervention in a bankruptcy proceeding, and, within the meaning of the act, a controversy arising in a bankruptcy proceeding, and the appellate jurisdiction is the same as in like cases under the Court of Appeals Act. Bankruptcy Act, § 24a; Hewit v. Berlin Machine Works, 194 U.S. 296; Coder v. Arts, 213 U.S. 223, and cases therein cited.

As the appeal was in the manner provided for in the Court of Appeals Act no special finding of ...


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