In re Shyvers

Respondents contend that with the denial of certiorari on March 4, 1940, Shyvers v. Security-First Nat. Bank, 60 S.Ct. 608 , 84 L.Ed.-, the jurisdiction of the U. S. District Court ceased, and that the entire matter was thereby set at large, the fund in question to be released to the debt- or, provided she exercised sufficient diligence before the claim of the bank was made effective. This premise is not sound, for the matter was still pending until the filing of the mandate from the Circuit Court of Appeals to the District Court on March 29, 1940. But assuming that the matter was not pending, still it was the duty of the bankruptcy court, a court of equity, to administer the funds held in custodia legis, distributing them to. such of the parties ’as, after due hearing, might show themselves entitled thereto. This high duty of a court of equity continues after a dismissal of the action on any ground. Especially is this true where, as here, the bank was claiming a lien on the funds in perfect good faith, as shown by the proceedings before the conciliation commissioner. Even though the proceeding be dismissed, the court has ample power to determine their disposition after notice to…