Herman Eisenberg, the attorney for the judgment creditors, is the party who made the offer of $ 200 to the Trustee.
Later in the hearing the Trustee said: 'Well the present status is this: Here is a property to which I have title as trustee, subject to liens and mortgage. Whether or not the judgment in dispute has a basis in fact, that is for the State Court. There is no equity in the property as far as we are concerned. I have to do something with this property. That is why I suggested to Mr. Back that they make an offer for the right, title, and interest, and they are making it. Now along comes this better offer. There are no other assets.'(Emphasis supplied.) The Referee then observed 'It would appear from the proofs of claim filed with the Referee that all creditors have been paid except this one.'
In addition, at the special meeting of creditors of October 21, 1953, there occurred this colloquy between the Referee and the Trustee:
'The Referee: In the previous account what happened to the other creditors?
'Mr. Silver: They were paid.' This fact was confirmed orally by the Trustee at the time of argument.
In view of the action of the State Court in staying execution on the Goldberg judgment, which was predicated on stipulation of the judgment creditors and the bankrupts, there certainly was no basis for the sale even had there been an equity therein. The whole proceeding raises the question of the possibility of unjustly enriching the judgment creditors.
Although this Trustee did not at any time file any written petition to abandon the Trustee's right, title and interest in and to the real estate in question, he did orally inform both the bankrupts and the Referee of his conclusion that the bankrupts had no equity in the property of any value to the estate and that he had to do something with it. It is my opinion that the conclusions of the Trustee so expressed to the Referee constituted an abandonment of the property. This, I feel, was confirmed by the Referee when after a statement by counsel for the bankrupts following the oral disclaimer of the Trustee, the Referee said to counsel for bankrupts, 'If that were the factual situation why didn't you take a rule upon the trustee to ask me for an order of turn over?'
The idea of the Trustee to reconvey to the bankrupts at private sale for a nominal sum and the acceptance by the Referee of a further nominal raise by the judgment creditors on the theory that he was bound to accept bids and approve a sale to the highest bidder was all predicated on the false assumption that the Trustee still had this real estate for disposal.
Practically this identical situation was before the court in In re Yalden, D.C.Mass., 109 F.Supp. 603, 604. I quote with complete approval from the opinion of the court in that case as follows:
'A trustee in bankruptcy has the right to abandon property of the bankrupt, title to which has been vested in him, when such property is of no value to the estate. Stanolind Oil & Gas Co. v. Logan, 5 Cir., 92 F.2d 28, 31. There is no procedure prescribed by the Bankruptcy Act, 11 U.S.C.A. § 1 et seq., to be followed by the trustee in abandoning property. Although it is better practice for the trustee to file a petition for allowance of the abandonment, and to have this passed upon by the referee, this is not necessary. It is enough if the trustee did in fact abandon the property. Mere inaction with respect to the property is not enough, but it is sufficient if the trustee clearly indicates his intention to abandon the property as valueless. In re Webb, 4 Cir., 54 F.2d 1065; In re Malcom, D.C., 48 F.Supp. 675, and the numerous cases there cited. * * *'
Here the Trustee clearly indicated that he considered the property worthless to the estate, and his intention to disclaim all title to the property. The method he chose, which had the approval of the Referee, was not only gratuitous but without the sanction of law or reason. He obviously had nothing to sell for the very simple reason that he did in fact abandon the real estate in question at the special meeting of creditors on October 21, 1953.
On the abandonment, title irrevocably reverted to the bankrupts. Consequently since 1953 the property in question has belonged to the bankrupts and not to the estate. The order and decree of the Referee under date of December 2, 1953, authorizing and empowering the Trustee to make, execute and deliver a Trustee's Deed for his right, title and interest in and to premises known as 4150 Maywood Street, Philadelphia, Pennsylvania, to Gilbert R. Goldberg for the sum of $ 200, is hereby vacated and set aside, and the Trustee will take the necessary steps to effect the abandonment to the bankrupts of the real estate aforesaid. It is so ordered.
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