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CLINE V. KAPLAN, 323 U. S. 97 (1944)

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U.S. Supreme Court

Cline v. Kaplan, 323 U.S. 97 (1944)

Cline v. Kaplan

No. 307

Submitted November 13, 1944

Decided December 4, 1944

323 U.S. 97


1. Where a bona fide claim adverse to that of the bankrupt estate is asserted as to property which is not in the actual or constructive possession of the bankruptcy court, the claimant has the right to have the merits of his claim adjudicated in a plenary suit. P. 323 U. S. 98.

2. The bankruptcy court has the power and the duty to examine the adverse claim to ascertain whether it is ingenuous and substantial. P. 323 U. S. 99.

3. When it is established that the adverse claim is substantial, the bankruptcy court cannot retain jurisdiction unless the claimant consents to its adjudication by that court. P. 323 U. S. 99.

4. Consent to adjudication by the bankruptcy court of an adverse claim is lacking where the claimant has throughout resisted a petition for a turnover order and has made formal objection to the exercise of summary jurisdiction before the entry of a final order. Louisville Trust Co. v. Comingor, 184 U. S. 18. P. 323 U. S. 99.

5. Upon the facts of this case, held that a claimant adverse to the bankrupt estate, as to property which was not in the actual or constructive possession of the bankruptcy court, did not consent to adjudication of the claim by the bankruptcy court. P. 323 U. S. 100.

142 F.2d 301 affirmed.

Certiorari, post, p. 691, to review a judgment which, reversing orders of the bankruptcy court, sustained the referee's dismissal, for lack of jurisdiction, of a petition for a turnover order.

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