In re Seal

GARVIN, District Judge. This is an application for an order vacating the order of adjudication herein and for a stay of proceedings, including the payment of moneys by a third party belonging to the bankrupt. The application is based upon alleged fraud practiced by the bankrupt in obtaining the adjudication. It is claimed that he borrowed various sums of money upon the representation that he was the sole heir and next of kin of his mother, who was advanced in years, and upon whose death he would repay the sums so obtained. On September 14, 1917, the bankrupt’s mother made a will, in which, it is claimed, she left him practically her entire estate. On October 7, 1919, she died, and it is alleged that the bankrupt came into considerable property under her will. The bankrupt denies having made statements at any time that he would be his mother’s sole heir, and there á sharp issue of fact is raised. The applicant, a creditor of the bankrupt, seeks to invoke the equity powers which a court of bankruptcy undoubtedly possesses to prevent a perpetration of fraud. That this court, sitting in bankruptcy, possesses equity powers to prevent the perpetration of fraud is well recognized; but these powers are by no means without limit. The bankrupt had a right to file the petition .in bankruptcy. He did not schedule under his assets any interest in his mother’s estate. The applicant claims that, because he had been designated as sole (or practically sole) devisee or legatee, this interest should have been scheduled as an asset. With this contention I am unable to agree. He had no vested right. His mother could at any time have changed her will, and I am unable to reach any other conclusion than that the property belonging to her estate comes within that class which is acquired by a bankrupt after his adjudication, and over which the court has no jurisdiction. It follows that the motion be denied. Order signed.