CERTIORARI, 285 U.S. 533, to review the reversal of an order of the District Court, 46 F.2d 811, in a bankruptcy proceeding.Mr. Robert A.B. Cook, for petitioner, relied on: Taubel-Scott v. Fox, 264 U.S. 426; Mueller v. Nugent, 184 U.S. 1; May v. Henderson, 268 U.S. 111; Harrison v. Chamberlin, 271 U.S. 191; Foster v. Manufacturers' Finance Co., 22 F.2d 609, cert. den. 276 U.S. 633; In re Hopkins, 229 F. 378; American Finance Co. v. Coppard, 45 F.2d 154; Whitney v. Barrett, 28 F.2d 760; Board of Education v. Leary, 236 F. 521; Gamble v. Daniel, 39 F.2d 447; In re White Satin Mills, 25 F.2d 313; In re Friedman Bros., 19 F.2d 243. Mr. Joseph B. Jacobs for respondent.
On page 290 of 1 F.2d we said: "The question of procedure was raised at least 10 days before the decision, and the right to proceed summarily was directly challenged." In Re Horgan, 1 Cir., 158 F. 774, it was held that the jurisdictional question raised before the entry of the final decree was sufficient, citing Louisville Trust Company v. Comingor, supra. Again, in Re White Satin Mills, Inc., D.C., 25 F.2d 313, it was held that the objection to summary proceeding was sufficient where made after the testimony was heard but prior to the entry of the referee's order. We are of the view that appellants' objection to the summary procedure was raised in apt time and that the court by the order appealed from erroneously reversed the referee in this respect.
Neither can they be secured, as their contract with the bankrupt entitles them to be secured, without keeping the securities in their possession. The fact that property held by a third person is allegedly withheld from the bankrupt estate as a result of a fraudulent and preferential transfer does not entitle a bankruptcy court to summarily require that the property be turned over. Cooney v. Collins, 8 Cir., 176 F. 189; Johnston v. Spencer, 8 Cir., 195 F. 215; Shea v. Lewis, 8 Cir., 206 F. 877; Harrison v. Chamberlin, supra; Brenner v. Sawyer, 1 Cir., 24 F.2d 167; In re White Satin Mills, Inc., D.C.Minn., 25 F.2d 313; In re American Fidelity Corporation, Ltd., D.C., 28 F. Supp. 462; In re Lummus, D.C., 214 F. 891. The question whether a creditor obtained a preferential or fraudulent transfer is not apposite to the issue of whether the creditor was an adverse claimant. In re Vallozza, D.C.N.J., 225 F. 334. As stated in Shea v. Lewis, supra [206 F. 881]: "Such a claim may be adverse and substantial, even though in fact fraudulent and voidable."
Cf. In re White Satin Mills, Inc., 25 F.2d 313 (D.C. Minn.). No such finding was made by the referee or the District Court. We conclude that jurisdiction cannot rest upon consent.
Decree for plaintiff. See, also, 25 F.2d 313. JOHN B. SANBORN, District Judge.