In re Hollywood Land & Water Co.

41 F.2d 778, 1930 U.S. Dist. LEXIS 2174
CourtDistrict Court, S.D. Florida
DecidedMay 26, 1930
DocketNos. 758-M, 759-M
StatusPublished
Cited by2 cases

This text of 41 F.2d 778 (In re Hollywood Land & Water Co.) is published on Counsel Stack Legal Research, covering District Court, S.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Hollywood Land & Water Co., 41 F.2d 778, 1930 U.S. Dist. LEXIS 2174 (S.D. Fla. 1930).

Opinion

RITTER, District Judge.

The above cases have been heard together upon the motion of the Highway Construction Company of Ohio, Ine., to dismiss the amended petition in bankruptcy in each ease. This company is a very large creditor of the alleged bankrupt, which, by reason of judgments entered against the bankrupt, has obtained liens, 'it is claimed, upon the real estate of the said bankrupt by virtue of the recordation of said judgments on the 25th day of April, 1929, in Broward county, Fla.

There was filed on the 24th day of August, 1929, the original petitions of certain creditors in these cases, alleging the respective companies had committed four acts of bankruptcy. To these petitions a motion to dismiss was sustained. Permission to amend was granted, and on the 6th day of February, 1930, an amended petition in bankruptcy in each case was filed. The original petitions were defective in many respects. They did not, in fact, state any act of bankruptcy, although four acts were listed. The first is that the Hollywood Land & Water Company left remaining unpaid a judgment in the amount of $1,532,672.61, in favor of the Highway Construction Company of Ohio, Inc., dated the 25th day of April, 1929, and recorded in Broward county, “for a period of over thirty (30) days next preceding the filing of this petition.” The second alleged that the Hollywood Land & Water Company has left unpaid a judgment in the amount of $608,575.19, in favor of the Highway Construction Company of Ohio, Ine., dated the 25th day of April, 1929, “for a, period of over thirty (30) days next preceding the filing of this petition.” The third is of the same nature concerning a judgment dated the 4th day of April, 1929, which clearly1 shows, with reference to the date of filing the petition, that it was more than four months preceding the filing of the same, and therefore is not within the bankruptcy statute. The fourth is a mere statement that the Hollywood Land & Water Company, while insolvent, transferred to one or more of its unknown creditors substantial sums of money in unknown amounts, with the intent to prefer such creditors. This simply follows the language of the act and is so general and incomplete that it does not contain specific averments required to present a cause of action under the Bankruptcy Act. It is apparent that none of the charges state any act of bankruptcy. The Act of May 27, 1926 (44 Stat. 662, § 3, 11 USCA § 21(a), provides that a judgment must be suffered or permitted while insolvent, and that the same was not vacated or discharged within thirty days from the date such judgment and lien were obtained. It is therefore clear that the original petition did not state any act of bankruptcy. It is also not alleged that the alleged bankrupt owned real estate on which a lien could fasten. Weitzel Flooring Corp. et al. v. Getz (C. C. A.) 31 F.(2d) 930.

There is a right of amendment to an ineffective and inefficient petition in bankruptcy, and the courts are as lenient in this respect as in reference to pleadings in other cases. There must be something, however, in the original petition by which to’ aiüend. The right to amend can go no further than to bring forward and make effective that which in some form is already there. Remington on Bankruptcy, pars. 286, 287.

“An amendment to a petition which sets up no new cause of action or claim, and makes no new demand, but simply varies or expands the allegations in support of the cause' of action already propounded, relates back to the commencement of the action, and the running of the statute against the claim so pleaded [780]*780is arrested at that point. Bnt an amendment which introduces a new or different cause of aetion, and makes a new or different demand, not before introduced or made in the pending suit, does not relate back to the beginning of the action, so as to stop the running of the statute, but is the equivalent of a fresh suit upon a new cause of aetion, and the statute continues to run until the amendment is filed.” Whalen v. Gordon et al. (C. C. A.) 95 F. 305, 308.

In granting the motion to amend the original petition, this court could not grant the right to the petitioning creditors to introduce a new cause of action.

At the time the motion to dismiss the original petition was presented, this court did not give due consideration to the question as to what could be or could not be amended. We held that the original bill was so wholly defective and inefficient that it should be dismissed, and gave permission to amend in such ways as, under the law, it could be amended.

The amendment to the petition which was filed, and which we are now considering, charges as acts of bankruptcy the following: The bankrupt did — .

(a) “Suffer or permit, while insolvent, the Highway Construction Company, a creditor, to obtain through legal proceedings a judgment and lien in the amount of One Million Five Hundred Thirty-Two Thousand Six Hundred Seventy-two Dollars and sixty-one cents, ($1,532,672.61), said judgment being dated the 25th day of April, 1929, and now recorded in the Minutes of the Circuit Court of the Twenty-second Judicial Circuit of Florida, in and for Broward County, in Book No. 7, at page 469, and the said Hollywood Land & Water Company did not vacate or discharge the same within thirty (30) days from the date such judgment and lien were obtained.”

(b) A similar allegation with reference to tjie judgment for $608,579.19.

(o) A repetition of the judgment dated April 4, 1929, which is clearly beyond the reach of the Bankruptcy Act, it being more than four months preceding the filing of the petition.

(d) A blank as far as alleging any act of bankruptcy is concerned.

The above (a) and (b) are, in the amended petition, within the language of the Bankruptcy Act, and set forth the failure to vacate or discharge within thirty days from the date such judgment and lien were obtained, whereas the original petition asserts that they were left remaining unpaid “for a period of over thirty (30) days next preceding the filing of this petition.” The amended petition states a new cause of action; a new act of bankruptcy totally different from the original petition in these two (a) and (b). paragraphs, so that as far as the allegations are concerned as to these judgments in the amended petition, they are sufficient as against the motion to dismiss. Stating, however, as they do, a new cause of aetion, the amended petition is the original petition in bankruptcy in this matter.

The Fifth Circuit has, in the ease of In re Louisell Lumber Co. (C. C. A.) 209 F. 784, 785, considered a situation similar to the one confronting us in this case. Three creditors of the company filed a petition in bankruptcy. The court, in reference thereto, says:

“This petition contains allegations of the company’s indebtedness to the petitioners and an elaborate allegation of the company’s in? solvency, and pi'ayed that it be adjudicated a bankrupt. The petition was fatally defective in this: It contained no statement whatever that the corporation had committed any one of the five acts of bankruptcy. Bankruptcy, Act, § 3. It did not contain any attempt or defective effort to state any one of such acts of bankruptcy. It was an absolute blank so far as such allegations are concerned. On February 21, 1912, about eight months after the levy of the attachment and the fixing of the lien in favor of Armour & Co., the petitioning creditors were allowed by the court below to amend the petition by inserting the following: (Then follows certain allegations.)”

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Bluebook (online)
41 F.2d 778, 1930 U.S. Dist. LEXIS 2174, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-hollywood-land-water-co-flsd-1930.