IN BE FRANKLIN II. KETOHUII.
889
adjourned return day, in order that her debt may be reckoned among the debts on the question of the bankrupt's discharge. The excuse given for failure to prove the debt earlier is that she was advised that her claim was against the bankrupt Belknap alone. But after she received this advice she learned. that Morris Ketchum, father of the bankrupt Ketchum, made proof of a large debt, upwards of $26,000, which he has been allowed by stipulation of the parties to prove nunc pro tunc. She now has ascertained that her claim is of the same nature as that of Morris Ketchum, and if his is provable against the firm, she is advised that hers is also. The case is still before the register, no report having been made to the court. This claim of Morris Ketchum was set forth in the schedules. The petitioner's claim was not so set forth. It is very large in amount, exceeding $100,000, and is for money fraudulently transferred by Belknap, her agent, to the firm's bank account. Morris Ketchum's debt has been contested by other creditors, including Mrs. Wyckoff, on the ground that it is the debt of Belknap alone and not the debt of the firm, but it has been held to be a valid debt of the firm, and therefore it is entitled to be computed in determining whether the requisite number and proportion of creditors assent to the discharge. The question whether these debts were of a nature to be provable against the firm was certainlya doubtful one, the doubt relating both to the facts imd the law of the case. The circumstance that Morris Ketchum's. debt was included in the schedule and Mrs. Wyckoff's was not, was calculated to give him an advantage over her as a. creditor, whether so intended or not. The question of the discharge is of great importance to the creditors, because there are but small assets, and under all the circumstances, I think it is just and right that the petitioner, as well as Morris Ketchum, should participate as a creditor, if her debt shall finally be established, in the determination of the question whether the requisite assent shall be given. Her consent that his proof be filed nunc pro tunc was .asked and given, and thereby he is enabled to participate in the decision of this question. As the case stands debt will not be oounted.
840
FEDERAL REPOnTEn.,
In re Borst, 11 N. B. R. 96; In re Read, 19 N. B. R. 232. But as the case is still before the register it is competent for the court, if justice requires it, and if by mistake, accident or otherwise, under the notices given to creditors of the hearing on the application for a discharge, creditors have failed to ,appear, to direct a new notice to be given, so that a just and fair vote of the creditors may be had. The case is under the control of the court, and creditors who show sufficient cause for their not appearing may be relieved. In this case it is proper that, after the determination of the much disputed question of the firm's liability litigated upon the re-examination of Morris Ketchum's proof of debt, a new notice should issue, that other creditors in the like position, but not named in the schedule, may have an opportunity to be heard. Ordered, that the register adjourn the proceedings on peti. tion lor a discharge to another day, and that a new notice be issued to creditors to appear and show cause.
In Re
KETCHUM.,
{District Court. S. D. New York.
February 6, l8BO.}
BANXRUPCy-SEAT IN NEW YORK STOCK EXCRANGE.-A Beat in the New York Stock Exchange is property which passes to an assignee in bank. ruptcy, and the court will require the lJankrupt to make a transfer of the Bame.
O. E. B1'ight, for assignee. O. W. Betts, for bankrupt. CUOATE, J. This is an application for an order requiring the bankrupt Ketchum to make a transfer of his seat in the New York Stock Exchange to the assignee in bankruptcy, or to such person as the assignee may procure as a purchaser of the seat. The real question is whether the right or privilege, which a bankrupt holds as a member of this stock exchange, is to be regarded as property which passes to his assignee in bankruptcy, under the bankrupt law, for the benefit of his croclitors. If it is, then whatever it may be necessary for the
IN RE FnANKLIN M. KETCHUM.
841
bankrupt to do to make the right available to the assignee he will be required to do. . I think the case cannot be distinguished in principle from the case of Gallagher v. Lane, 19 N. B. R. 224, in which it was determined that a Washington market leafle was property that belonged to the assignee. As in that case the consent of the city was necessary to a transfer" so here the consent of a committee of the stock exchange is necessary to a transfer of this right. The seat, however, has an actual pecuniary value, which the rules of the society, as interpreted and applied in practice, permit the holder. to realize, by a sale and transfer. There is no practical difficulty in effecting a transfer of this right or interest for a pecuniary consideration, subject to the condition that the debts of the present holder to members are first paid; and the right or privilege is to all intents and purposes a business right or privilege, useful for business purposes only. I see nothing in the rules of the exchange which renders it impossible for the seat to be disposed of by the assignee in bankruptcy, with the co-oporation of the bankrupt) subject to the condition above mentioned. The equity of the creditors in the matter is as obvious as in the case of the market lease. This seat in the board was actually used as part of the business capital of these bankrupts as stock-brokers. To suffer the bankrupt still to hold it virtually withdraws several thousand dollars in value of their business assets from the creditors. In the case of Hyde v. Woods, 4 Otto, 523, I understand it. to be distinctly intimated that membership in a stock board, where the transferee of a seat call1lot become a member except by election, is property which will pass to the assignee in bankruptcy, subject to a similar condition as to debts due to other members. The provision giving members a right somewhat in the nature of life insurance, is merely an inci. dent of inembership and a mere contingency, and does not, in my jlldgment, take this business privilege or asset out of the category of business property. I think this particular feature