Court Opinion

ID: 8867686
Source: CourtListenerOpinion
Date Created: 2022-11-26 18:11:00.177917+00
Date Added: 2024-06-11T17:06:03.614285
License: Public Domain

ALDRICH, District Judge.
Gay Bros, is the partnership name, and J. A. Gay and L. D. Gay were the two partners. In the original petition the firm and the individual partners all joined as petitioners. They used Form 2, setting out the partnership debts which they were not able to pay, and stating that they were willing to surrender all their property for the benefit of their creditors. The petition sets out, by schedule annexed, marked “A,” and verified by oath, a full and true statement of the debts of said partners, etc.; by schedule marked” “B,” verified by oath, an accurate inventory of the property of said partners; by schedule marked “0,” a full and true statement of the individual debts of Joseph O. Gay; by Schedule D, an inventory of all his individual property, real and personal; by Schedule E, the individual indebtedness of Louis P. Gay; and by Schedule F, an inventory of his individual property. The petition concludes with a prayer that the firm may be adjudged, by a decree of the court, to be bankrupts (in the plural). The adjudication indorsed by the judge on the back of the original papers was “Petitioners adjudged bankrupts, and petition referred to Benjamin H. Corning, Escp, referee.” The order of the clerk, which I suppose was. for publication, was not so comprehensive as the indorsement by the judge, for it states only that “the said Gay Bros, are adjudged *871bankrupt.” It appears,, however, from subsequent proceedings in the case, that the referee notified the individual as well as the partnership creditors; so, if there was any defect in the language of the order promulgated by the clerk, it was cured by the notice of the referee and the appearance of the creditors.
Paragraph “c” of section 5 of the bankrupt law contemplates that the bankruptcy court which 1ms jurisdiction of one of the partners may have jurisdiction of all the partners, and of the administration of the partnership and individual property. Paragraph “d” provides that the trustee shall keep separate accounts of partnership property and property belonging to the individual partners; and paragraph “e” that the expenses shall be paid from the partnership property and the individual property in such proportion as the court shall determine. So it would seem that in a proper case (and I mean by that upon sufficiently comprehensive papers, and conditions warranting it) the court may wind up the affairs and relieve from the indebtedness of the partnership and the individual partners in one proceeding, and apportion the expenses as equity may require. Furthermore, it may be said that congress, for the purpose of making the law a practical, working law, authorized and called upon the supreme court to promulgate necessary rules and forms to be used in its administration. Form 2 of the rules prescribed by the supreme court (18 tffip. Ct. xviii.) is entitled “Pari nership Petition”; and I assume that it was intended to provide a form for putting the provisions of section 5 of the bankrupt law into practical operation, and that it was formulated in accordance with the view of the supreme court as to what section 5 contemplated should or might be done. That form, which was strictly followed by the petitioners in this case, clearly contemplates that not only the partnership assets may be inquired into, but that the assets and liabilities of the individual partners may be inquired into and wound up in one proceeding. Aside from what seems fairly to follow from the different paragraphs of section 5. and the form promulgated by the supreme court, it may be observed that the different results may be more easily, conveniently, and inexpensively reached in one proceeding, upon proper papers, ¡hah upon severa,I separate and distinct proceedings, involving different hearings, and what might be called circuity of legal process.
There has been no consideration upon argument of this particular question in any of the districts of the First circuit, that I am aware of; but I do understand that, the practice in the Massachusetts district, and in the Maine district as well, has been to discharge from both, partnership and individual Indebtedness in one proceeding upon one petition, where the firm and the individual partners become petitioners, and set out the various kinds of indebtedness, and the assets of the various inierests, and ask to he adjudged bankrupts. I see no reason why this practice should not be adopted for !Nbw Hampshire; and it may he understood that it is the practice, until there is an authoritative and controlling decision to the contrary, or until I am convinced upon argument that, tills should not be so. While a single fee to the clerk, the referee, and the trustee may *872be meager or entirely inadequate in such a comprehensive proceeding, I am disposed to follow the decision of Judge Ooxe in Re Langslow, 1 Nat. Bankr. N. 232, 98 Fed. 869, and the practice in Massachusetts and in Maine, until argument convinces me that I am wrong in this respect.
As to the form of the discharge, in Massachusetts the practice is, in such a case, to discharge each individual partner from all debts and claims, making no distinct reference to their partnership or individual character, — the theory being that the discharge of the partner from all debts and claims covers both; while in Maine, as I understand it, the practice is to expressly discharge each individual partner from firm indebtedness, and individual indebtedness as well.
In the view which I hold, the application for an amendment by annexing to the original petition a separate individual petition for each partner, in addition to the one in which they join as individuals, is unnecessary, and therefore is disallowed. The petition for discharge is granted, and a discharge should be issued to each individual partner, and should cover his liability on the debts and claims against G-ay Bros., and his individual indebtedness as well.