In re Okmulgee Producing & Refining Co.

265 F. 736, 1920 U.S. Dist. LEXIS 1146
CourtDistrict Court, D. Delaware
DecidedApril 13, 1920
DocketNo. 348
StatusPublished
Cited by5 cases

This text of 265 F. 736 (In re Okmulgee Producing & Refining Co.) is published on Counsel Stack Legal Research, covering District Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Okmulgee Producing & Refining Co., 265 F. 736, 1920 U.S. Dist. LEXIS 1146 (D. Del. 1920).

Opinion

MORRIS, District Judge.

Two petitions in bankruptcy have been filed against Okmulgee Producing & Refining Company, a. Delaware corporation, one in the District Court of the United States for the Eastern District of Oklahoma on February 19, 1920, and the other in this court by the same petitioning creditors on February 23, 1920. Several creditors other than the original petitioners have entered their [738]*738appearance and joined in the petition here. The Refining Company moved this court to relinquish its jurisdiction and to transfer the case to the aforesaid Oklahoma court, under authority of section 32 of the Bankruptcy Act (Comp. St. § 9616), upon the ground that the latter court has jurisdiction and can proceed with the case for the greatest convenience of parties in interest.

The original and intervening petitioning creditors have filed a motion that the petition or motion for transfer be dismissed, upon grounds which may be summarized thus: (1) That the petition or motion is not verified as required by the Bankruptcy Act; (2) that the alleged bankrupt is not a competent party to petition or .move the court for the transfer of this case; (3) that the petition or motion does not state facts sufficient to warrant the court granting the relief prayed; and (4) that the motion for transfer is premature, in that there is under the Bankruptcy Act and the General Orders no power in the court to make an order of transfer prior to adjudication.

[1] The application to transfer sets up matters of fact, and was verified by the oath of the president of the Refining Company. The oath was “that the facts therein set out are true to the best of his knowledge, information, and belief.” It is contended that this is not a compliance with section 18c of the Bankruptcy Act (Comp. St. § 9602) which provides: “All pleadings setting up matters of fact shall be verified under oath.” The form of the oath is not prescribed by the act. Section 30 (Comp. St. § 9614), however, provides that—

“All necessary rules, forms, and orders as to procedure and for carrying this act into force and effect shall he prescribed, and may be amended from time to time, by the Supreme Court of the United States.” .

In pursuance of the power and authority thus conferred the Supreme Court prescribed certain forms, and by General Order 38 (89 Fed. xiv, 32 C. C. A. xxxvii) directed:

“The several forms annexed to these General Orders shall be observed and used with such alterations as may be necessary to suit the circumstances of any particular case.”

The form of verification prescribed for an involuntary petition in bankruptcy (form 3) is absolute, namely, “That the statements contained in the foregoing petition, subscribed by them, are true,” while the form for verification to a voluntary petition (forms 1 and 2) is qualified, thus, “That the statements contained therein are true according to the best of my [their] knowledge, information and belief.” The Supreme Court thereby recognized both thé absolute and the qualified form of oath as being within tl]e meaning of the statute. Sabin v. Blake-McFall Co., 223 Fed. 501, 505, 139 C. C. A. 49.

No form was prescribed for a motion or petition to transfer a case to another district. The form of verification annexed to the motion in the case at bar is therefore not in conflict with any form or General Order prescribed by the Supreme Court. It is not in conflict with the statute, unless the verification to a voluntary petition in bankruptcy is also in conflict therewith, which cannot, owing to its origin, be here presumed. The creditors, in support of -their contention [739]*739upon this point, cite In re Vasibinder (D. C.) 126 Fed. 417, and United States v. Collins (D. C.) 79 Fed. 65. The latter case is not one arising under the Bankruptcy Act, and the former considers the sufficiency of a qualified verification to an involuntary petition in bankruptcy. Such verification, being in conflict with the form prescribed by the Supreme Court, presented a question differing materially from the one now before this court. I am of opinion that, assuming, but not deciding, the motion to transfer to be a pleading, its verification satisfies the statutory requirement. In re Milgraum & Ost (D. C.) 129 Fed. 827.

[2] Is the alleged bankrupt a competent or proper party to petition or move this court for a transfer of this case? This question may be best disposed of by considering the dominant purposes of the act, the nature of a proceeding in bankruptcy, and whether an alleged bankrupt is a party in interest, within the meaning of section 32 of the act. The dominant purposes of the act were pointed out by Sanborn, C. J., speaking for the Circuit Court of Appeals for the Eighth Circuit in Swarts v. Fourth Nat. Bank, 117 Fed. 1, 3, 54 C. C. A. 387, 389, thus:

“No one can become familiar -with the bankrupt law of 1898 without a settled conviction '(hat the two dominant purposes of the framers of that act were: (1) The protection and discharge of the bankrupt; and (2) the distribution of the unexempi: property which the bankrupt owned four months before the filing of the petition in bankruptcy against him, share and share alike, among his creditors. All the earlier sections of the act are devoted to the security and relief of the bankrupt, and, when the distribution of his property is reached, the provisions relating to it are all drawn from the standpoint of the insolvent, and not from that of his creditors. The rights and privileges of the bankrupt, and the equal distribution, of his property, dominate every provision, while the rights, wrongs, benefits, and injuries of his creditors are always incidental, and secondary to these controlling purposes.”

The nature of a bankruptcy proceeding was well defined by Wood-ruff, C. J., in Re Boston, H. & E. R. Co., Fed. Cas. No. 1,677, where he said:

"At first view, it is natural and agreeable to our ordinary ideas upon this subject, to assume that a petition by an alleged creditor against his debtor, to compel a submission of his estate to the bankruptcy court, is a contest between two parties, with which a third person may not meddle. But this is by’ no means a complete view of the scope and effect of the proceeding. Jt is not a mere suit inter partes. It rather partakes of the nature of a proceeding in rem. * * * ”

That the bankrupt is a party in interest in the proceeding for transfer was expressly decided by this court in Re United Button Co., 137 Fed. 668, 672, where Judge Bradford said:

“The Bankruptcy Act does not define or describe ‘greatest convenience’ or ‘parties in interest,’ as those phrases are used in section 32 and General Order 6. Both expressions are elastic and largely indefinite. It is manifestly too narrow a construction of the phrase ‘parties in interest’ to restrict it merely to unsecured creditors in bankruptcy. The bankrupt is not only literally but substantially a party in interest.”

The petitioning creditors cite no authority in support of their contention that the alleged bankrupt is not a competent or proper’party [740]*740to move for a transfer, but say that the alleged bankrupt’s position until adjudication is in the nature of that of a defendant, and this proceeding, if allowed, would giant it a change of venue without the law making any provision therefor.

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Bluebook (online)
265 F. 736, 1920 U.S. Dist. LEXIS 1146, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-okmulgee-producing-refining-co-ded-1920.