Hollywood National Bank v. A. J. Bumb, Trustee

This is an appeal from an order of the United States District Court for the Central District of California denying appellant’s petition to review and reverse an order of the referee in bankruptcy in Chapter XII proceedings. The district court had jurisdiction to consider the petition under 11 U.S.C. §§ 11 (a) and 67(c); we have jurisdiction of the appeal under 11 U.S.C. §§ 47 (a) and 816.

In 1965 and 1966, appellant-bank acted as escrow holder for the sale of two parcels of real property, each consisting of land and an apartment house. In each escrow, appellee Bumb was the seller, as the duly appointed trustee for the estate of the debtor, and the buyer was a corporation approved by the referee. The sales were authorized by orders of the referee, which orders permitted the opening of escrows to consummate the sales. Pursuant to these orders, the buyer and the trustee contracted with the bank to handle the escrows.

Thereafter, the trustee filed an application with the referee in which he al leged that the bank violated the escrow instructions and thereby damaged the estate. The referee then ordered the bank to show cause why it should not be held liable, thus attempting to assert…