In re VOGT

In re VOGT. (District Court, E. D. New York. February 5, 1908.) Bankruptcy — Funds in the Hands op Heceivee — Payment to Trustee. It being impossible, on a motion by a trustee for an order directing a receiver in bankruptcy to pay over money in Ms bands, to determine tbe validity of certain mortgages or to pass on the question whether any claims have been proved before tbe referee, either as general or secured claims, with reference to the fund, on affidavits, or to settle questions of title, if any were raised, the trust.ee being required to participate in further litigation with reference to such mortgages, the fund may be permitted to remain in the hands of the receiver until further proceedings show what conditions should be attached to any disposition of the fund. Francis R. Mullin, for trustee. Roger Foster, for Franks. [MAJORITY — CHATFIELD, District Judge.] CHATFIELD, District Judge. Certain are in the hands of the receiver in bankruptcy, and the trustee has made a motion to have these moneys turned over to him, inasmuch as litigation with reference to a $8,500 chattel mortgage, which was claimed as a lien upon these funds, has been terminated. Without attempting to interpret the language of the order under which these funds were deposited, it would seem that they should be now transferred to the trustee, if anything were to be gained by the change of the custody of these funds. It is impossible upon a motion and upon affidavits to determine the validity of the $3,800 and $2,000 mortgages, or" to pass upon the question whether any claims have been proven before the referee, either as general or secured claims, with reference to the fund, or to settle questions of title, if such are raised. It is apparently shown by the papers that the'$2,000 mortgage has been satisfied of record. The trustee must either bring the appropriate action to set aside the’ $3,800 mortgage, and the necessary litigation ' with ¿reference to the $2,000 mortgage must be instituted by the creditor, if the validity of that mortgage can be restored, or else the matter of these claims must be brought into this court by some proceeding under the bankruptcy law on behalf of the creditors who claim them. A determination of the validity of these liens would raise issues which cannot be determined on a motion of this character, and until a claim is put forward in some guise provided by the bankruptcy law no motion to expunge it can be made. The referee in bankruptcy to whom the case was originally referred is long since deceased, and no order appears upon the record referring the matter to any other referee. Without definitely passing upon this motion,, it would seem that the custody of the fund might as well remain in its present condition until further proceedings can be had. ■ The motion will therefore be denied, without prejudice to renewal, or to further application to this court in any way that either party may be advised.