In re Ealy

31 F.2d 314, 1929 U.S. Dist. LEXIS 1052
CourtDistrict Court, E.D. Michigan
DecidedMarch 2, 1929
DocketNo. 1645
StatusPublished
Cited by6 cases

This text of 31 F.2d 314 (In re Ealy) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Ealy, 31 F.2d 314, 1929 U.S. Dist. LEXIS 1052 (E.D. Mich. 1929).

Opinion

TUTTLE, District Judge.

This bankruptcy cause is before the court on a petition of the Chemical National Bank of New York, a creditor, to review an order of one of the referees in bankruptcy denying its petition for leave to amend its claim, filed against the bankrupt partnership herein, so' as to make such claim a claim, not only against said partnership, but also against certain individual bankrupts herein. The material facts, which are undisputed, are as follows:

On February 5, 1927, the firm of Ealy, Pardee & Co., a partnership consisting of J. McNair Ealy, Peter C. Pardee, Amos L. Kinney, William P. Campbell, Charles W. Stacey, and David J. Evans, as partners, which partnership bad been operating a private bank at Reese, Mich., under the name of the Bank of Reese, was adjudicated a bankrupt herein. On the same day the members of said partnership just mentioned were also adjudicated bankrupts, as individuals, in this court. Thereupon the causes in which said partnership and individuals, respectively, had been so adjudicated bankrupt were duly consolidated for the sake of convenient administration, although, of course, the rights and liabilities of each of said bankrupts and of the creditors thereof, as between themselves, remain unaffected by such consolidation.

On August 3, 1927, the above-named Chemical National Bank of New York filed a proof of claim against said bankrupt partnership, alleging therein that the “Bank of Reese, Ealy, Pardee & Co., a corporation by or against which a petition for adjudication of bankruptcy has been filed, was at and before the filing of said petition, and still is, justly and truly indebted to said corporation (namely, said Chemical National Bank of New York) in the sum of $20,000 and inter[315]*315est from January 17, 1927; that the said debt exists upon a promissory note of which a copy is hereto annexed; that the consideration of said debt is as follows: Cash advanced; that the said debt was due on January 17, 1927.” The said note, copy of which was so annexed to said proof of claim, was dated at Reese, Mich., September 15, 1926, payable to said Chemical National Bank of New York, in the sum of $20,000, and signed by “Bank of Reese, Ealy, Pardee & Company, by Peter C. Pardee, Cashier.” No writing other than said note was attached to said proof of claim, and neither such note nor such proof of claim made any reference to any of the aforesaid individuals, as debtors or otherwise.

On February 16, 1928, this claimant filed herein a petition, which is the basis for the relief here sought. In said petition, as thereafter amended, the petitioner alleges that “upon September 15, 1926, J. McNair Ealy, Peter C. Pardee, and D. J. Evans, copartners as Bank of Reese, Ealy, Pardee & Company and J. McNair Ealy, Peter C. Pardee, and D. J. Evans, individually, became indebted to your petitioner in the sum of $20,-000, represented by the promissory note of the Bank of Reese, Ealy, Pardee & Company, in said above sum and debt, which note was due and payable on January 17, 1927, but was not paid”; that “as additional security to said note the said J. McNair Ealy, Peter C. Pardee, and D. J. Evans respectively and severally entered into agreements with your petitioner, individually guaranteeing to your petitioner the payment of said note and interest at maturity, copies of which guaranty agreements are hereto attached”; and that “it is now contended that the claim of your petitioner as filed cannot be considered as filed against the individual copartners above set forth, and if such contention is correct, and if petitioner is not permitted to amend its claim, irreparable injury will be done to petitioner.” The petition prays that the language of the aforesaid proof of claim be amended, so as to allege that said copartnership and said Ealy, Pardee, and Evans, as individuals, are indebted to the petitioner in the aforesaid sum; that copies of the said individual guaranty agreements be permitted to be attached to said proof of claim; that said proof of claim, when so amended, may be treated as the proof of claim of the petitioner against said eonartnership, and also against the individual estates of said individuals, as bankrupts; and that, “in the distribution of the estates of these several bankrupts, petitioner be permitted to have its share in such distribution in the order and to the amounts that it would have been entitled to, if its claim as now revised and amended had been so filed in the first instance.” One of the instruments of guaranty so mentioned and referred to is signed by said J. McNair Ealy, and the other by said Peter C. Pardee and D. J. Evans. Each is dated September 22,1926, at New York, and reeites that: “Whereas, Bank of Reese, Reese, Michigan, hereinafter called the principal, desires to transact business with and procure credit from the Chemical National Bank of New York, and may from time to time, by reason thereof, be indebted to said bank; Now, therefore, for and in consideration of the premises and of one dollar to the undersigned in hand paid by said bank, the receipt of which is hereby acknowledged, and for the purpose of inducing said bank from time to time to extend credit to the principal, and for other valuable considerations, the undersigned jointly and severally hereby guarantee to said bank, its successors or assigns, the payment at maturity * * * of all bills, notes, checks, drafts, acceptances, negotiable instruments and evidences of debt made, endorsed or discounted to or through said bank by the principal, and of all indebtednesses, obligations and liabilities, whether matured or unmatured, now existing or hereafter incurred, of the principal to said bank.”

The trustee in bankruptcy answered and opposed this petition, and the referee denied it. The grounds on which this decision of the referee was based are thus stated in the concluding sentences of the findings of law by which such decision was expressed: “These are entirely distinct and separate claims from that originally filed against the partners on their promissory note. Petitioner cannot be properly allowed to annex one claim to another in the guise of an amendment. The claimed right to amend would constitute an attempt to introduce new written instruments establishing entirely different obligations of an entirely different kind and class from that upon which the original claim is based. Petitioner lost its right to this relief by the expiration of the period of six months after the date of adjudication.” The correctness of this ruling is the subject now presented to this court for consideration.

The reference, in the proof of claim, to the bankrupt firm as a corporation, instead of as the partnership, which it really was, was obviously an immaterial, if not merely clerical, mistake or variance, involving form, [316]*316and not substance, which, dearly, petitioner should be permitted to correct, as it seeks to do. The making of a change in phraseology of this sort is merely an amendment which, under the circumstances disclosed, should undoubtedly be permitted by the court. Indeed, this is not disputed, but appears to be conceded, by the trustee in bankruptcy.

Whether, however, petitioner is entitled to change the language of its proof of elaim, filed against the bankrupt partnership as already described, so as to make it a claim against the bankrupt estates of the various individual members of said partnership, as petitioner seeks to do, is a wholly* different question.

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Bluebook (online)
31 F.2d 314, 1929 U.S. Dist. LEXIS 1052, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-ealy-mied-1929.