Bankruptcy – Summary Jurisdiction – Filing Proof of Claim as Basis for Money Judgment on a Counterclaim in Favor of the Trustee

Appellant filed a proof of claim with the trustee in bankruptcy for unliquidated damages for an alleged breach of contract by the bankrupt. In response, the trustee filed a petition with the bankruptcy court for an order disallowing the appellant’s claim and for a money judgment against appellant for a breach of the same contract. The district court affirmed the referee’s denial of appellant’s claim and judgment in favor of the trustee. On appeal, held, affirmed. Filing proof of claim gives the bankruptcy court jurisdiction not only to hear, but to grant the trustee’s petition for affirmative relief on a counterclaim arising out of the same transaction. Peters v. Lines, 275 F.2d 919 (9th Cir. 1960).