In re Duguid

100 F. 274, 1900 U.S. Dist. LEXIS 393
CourtDistrict Court, E.D. North Carolina
DecidedMarch 16, 1900
StatusPublished
Cited by9 cases

This text of 100 F. 274 (In re Duguid) is published on Counsel Stack Legal Research, covering District Court, E.D. North Carolina primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Duguid, 100 F. 274, 1900 U.S. Dist. LEXIS 393 (E.D.N.C. 1900).

Opinion

PURNF.LL, District Judge.

A petition entitled “Tn re Duguid & Son and 8. 8. Duguid” was iiled in the office of the clerk of the district court: at New Berne, N. C., at 5 p. m., January 2!), 1900, and the judge, being absent from that division of the district, was, under section 18g of the bankrupt act, referred to the referee, who .on January 31st adjudged Bailie B. Duguid a bankrupt. The prayer of the petition is that the firm may be adjudged bankrupt, within the purview of ilie bankrupt act, and states that James A. Duguid, Hie “son,” is a minor, and lie and his general guardian have heretofore agreed to a dissolution of the partnership, and left the settlement of (he partnership affairs to petitioner. The partnership’s assets and debts are scheduled, and it appears in the schedules and otherwise that the partnership has committed acts of bankruptcy in permitting judgments to be taken'and preferences obtained, anil is unable to pay its debts.

The referee finds the following facts:

“That on the 15th day of January, 1900, the Geo. Dewitt Shoo Company secured judgments against Sallie S. Duguid and James A. Duguid, who com-* posed the firm of Duguid & Son. The summons was served on Mrs. S. S. Duguid, and James A. Duguid was represented in court by counsel. James A. Duguid is a minor. No appeal was taken from said judgments, but they are now judgmeids of a court of competent jurisdiction, and in full force and effect, no appeal having been taken. That execution issued on said judgments was placed in the hands of the sheriff of Graven county, and levied on stock of goods belonging to ft 8. Duguid and James A. Duguid. The levy was on the excess, after setting apart 8500 to each of the defendants in the execution. That tlie levy was made before; any proceedings in bankruptcy.”

The referee certifies the following conclusions of biw:

“That the parlies S. S. Duguid and James Duguid are entitled to their exemptions, each 8500; that James Duguid, being a minor, cannot be adjudged a bankrupt, nor have any benefit of the bankrupt law; that the only part of the amount realized from the sale of the excess of goods by the sheriff that the trustee is entitled to administer in bankruptcy is one-lialf of the SJOO, which Is the ini crest of Hallie 8. Duguid; that the sheriff of Craven county pay one half of the amount received from the sale of the stock to the Dewitt Shoe Company, and the other half to the trustee of Sallie S. Duguid; that no notice was served to set aside the said judgments within ten days after their rendition.”

It is stated in the certificate that the counsel who filed the petition moved the court (referee) to adjudicate the firm of Duguid & Bon bankrupts. The referee court declined, on the ground that [276]*276James Duguid was a minor, and could not be adjudicated bankrupt. The petition was signed by Sallie S. Duguid, as was also all the schedules which include the firm assets. “The referee court holds the guardian has no right to consent to the administration of the ward’s interest in the bankrupt court. Under the bankrupt law, a minor cannot figure in a bankrupt court.”

The contest is principally between creditors of the firm. Those who obtained judgments on January 15, 19.00, within four months of the petition in bankruptcy, claiming they are entitled to half the excess in the hands of the sheriff, as the interest of James Duguid, and other creditors claiming all the assets of the firm, and the members thereof, should be administered by the trustee in bankruptcy.

The first conclusion of law by the referee, that James Duguid is entitled to the personal property exemption set apart to him, is in accordance with the laws of North Carolina, as decided by the supreme court of the state, which this court follows.' See In re Stevenson (D. C.) 93 Fed. 789, and cases cited. The referee’s decision on this question is therefore affirmed. In North Carolina, in case of the bankruptcy of a partnership, where there are firm assets, but no individual estate, each partner is entitled to receive out of the partnership-assets the exemption allowed by the law of the state, provided the other partner or partners consent thereto. Ordinarily the conclusion that a minor cannot figure in the bankruptcy court is correct. There are some exceptions, however, to this rule, so laconically stated by the referee. In voluntary proceedings, the act of 1898 provides, “Any person who owes debts, except a corporation, shall be entitled to the benefits of this act as a voluntary bankrupt.” A minor is a person, and he may owe debts, but ordinarily such debts are voidable. Under certain circumstances, he may contract debts for necessities; but these debts are the exceptions, not the rule. Parties dealing with a minor in commercial transactions do so at their peril. Sometimes, in their anxiety to sell goods, salesmen, if they know it, shut their eyes to the incapacity of a minor to contract and the law. They assume the risk, and, if disappointed when pay day comes, they can blame themselves,— no one else.

An infant is not generally liable for a debt contracted during infancy. Such debts are voidable. Who can prophesy with any certainty what course an infant will adopt with reference to such debts after attaining his majority? The uncertainty of such course is even greater than the four over which the wise man, Solomon, was perplexed, as recorded in Proverbs. Guardians and others who have had experience can testify feelingly on this subject. Those who have not had the experience, but contemplate testing the matter, will be entitled to do so at some future period. To the former it is regarded as grounds where fools rush in, but angels fear to tread. In discussing this question in Re Derby, Fed. Cas. No. 3,815, Judge Blatchford says:

“The general contracts of an. infant having no force if disaffirmed by him after attaining his majority, it is idle for him to set forth, in a voluntary case commenced during his infancy, a schedule of his creditors, and idle for them [277]*277to prove their debts during bis infancy, for the whole proceedings must be in vain, if the debts are disaffirmed by him after he attains his majority.”

And there are other difficulties attendant on an involuntary case. The debts must be such as are provable under the statute, and an act of bankruptcy must also be set forth. The difficulties will present themselves to the legal mind, and the conclusion is that an infant cannot be adjudged a bankrupt either when he seeks voluntarily the benefits of the law, or an attempt is made to force him into bankruptcy. Whether a debt for necessities would support a petition or not" does not arise, but even this was an open question in England in 1891. In re Soltykoff [1891] 1 Q. B. 415. The referee is therefore affirmed in holding the infant member of the firm could not join in the petition or be adjudged a bankrupt.

But the infant was associated with his mother, a widow, the only adult in the firm, who files the petition, schedules her own and the firm assets, and asks that both be adjudged bankrupt. Her prayer as to herself is granted, and an adjudication as to the firm refused. The petitioner was the only one who could act for the firm, and she asked that the firm be adjudged bankrupt, the petition being on the prescribed printed form of a partnership petition.

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Bluebook (online)
100 F. 274, 1900 U.S. Dist. LEXIS 393, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-duguid-nced-1900.