Court Opinion

ID: 8796150
Source: CourtListenerOpinion
Date Created: 2022-11-26 14:11:58.367892+00
Date Added: 2024-06-11T17:03:38.512306
License: Public Domain

SANBORN, Circuit Judge.
George H. Fleischman and T. E. Armstrong were partners as Armstrong & Fleischman. Fleischman filed a petition in bankruptcy, and prayed therein that he, the partnership, and T. E. Armstrong individually, be adjudged bankrupts. T. E. Armstrong demurred to the petition against him individually, his demurrer was sustained, and the petition as to him individually was dismissed. He answered the petition as to the partnership, Fleischman demurred to his answer, that demurrer was sustained, and on April 15, 1913, the partnership and the individual, Fleischman, were adjudged bankrupt. On April 24, 1913, the referee, without notice to Armstrong and without hearing, ordered him to file with the referee within 10 days a list of his creditors and a schedule of his assets. On a petition of Armstrong to' revise this order, the District Court affirmed it. Thereupon Armstrong filed, a petition to revise and avoid this order of the court below, and his counsel now contend that this' order is erroneous: First, because the referee gave no notice of the hearing of the question whether or not he should make this order, failed to have any hearing upon that question, and failed to recite in the order anything about the notice or hearing as required- by General Order in Bankruptcy No. XXIII; and, second, because inasmuch as *99Armstrong- never consented to the administration of the partnership property, or his individual property, in bankruptcy, the referee and the bankruptcy court had no jurisdiction to draw to itself and administer his individual property, and therefore no jurisdiction to require him lo file a list of his creditors or a schedule of his assets.
[1] The second objection raises this question: May a court of bankruptcy which has adjudged a partnership, composed of two members, and one of its members, bankrupt, draw to itself and administer the property of the other member, and require him to- file a list of his individual creditors and a schedule of his assets? There was a time when this question was debatable. Vaccaro v. Security Bank, 103 Fed. 436, 442, 43 C. C. A. 279, 285; In re Bertenshaw, 157 Fed. 363, 373, 377, 85 C. C. A. 61, 71, 75, 17 L. R. A. (N. S.) 886, 13 Ann. Cas. 986. But it is so no longer. The Supreme Court of the United States has decided that the provision of section 5h of the Bankruptcy Law (Act July 1, 1898, chap. 541, 30 Stat. 547 [U. S. Comp. Stat. 1913, § 9589, p. 4367]), that “in the event of one or more but not all of the members of a partnership being adjudged bankrupt, the partnership property shall not be administered in bankruptcy, unless by consent of the partner or partners not adjudged bankrupt,” which counsel for the petitioner invoke, is inapplicable to a case of this character, is limited in its effect to those cases in- which one or more but not all of the partners have been, and the partnership has not been, adjudged bankrupt, and that, even if such a case as that in hand were governed by section 5h, the failure of the petitioner to object to the administration of tlie partnership property in bankruptcy and himself to settle the partnership business, would estop him from successfully claiming that his individual estate could not be drawn into and administered by the bankruptcy court. Francis v. McNeal, 228 U. S. 695, 700, 701, 33 Sup. Ct. 701, 57 L. Ed. 1029.
[2] As the individual property of the petitioner was subject to administration and application by the court of bankruptcy so far as necessary in order to pay in full the partnership debts he was required by General Order in Bankruptcy No. VIII (89 Fed. vi, 32 C. C. A. xi) to file a schedule of his debts and an inventory of his property within 10 days after his adjudication in bankruptcy. In re Solomofi & Carvel (D. C.) 163 Fed. 140; In re Junck & Balthazard (D. C.) 169 Fed. 481; Dickas v. Barnes, 140 Fed. 849, 851, 72 C. C. A. 261, 263, 5 L. R. A. (N. S.) 654.
[,3] Conceding that in issuing, without notice to- the petitioner or a hearing, its order on him on April 24, 1913, to file a list of his creditors and the inventory of his assets within 10 days thereafter the referee failed to comply with the provisions of General Order in Bankruptcy No. XXIII (89 Fed. xi, 32 C. C. A. xxvi), nevertheless, this mistake is not fatal to the decree of the court below affirming that order, because the only effect of the order of the referee was to require the petitioner to make his filings by May 4, 1913, when section 7 of the Bankruptcy Law and General Order No. VIII required him to make them on or before April 25, 1913, and error without prejudice is no ground for reversal.
The petition to revise must be dismissed; and it is so ordered!.