Mahoney v. Ward

100 F. 278, 1900 U.S. Dist. LEXIS 394
CourtDistrict Court, E.D. North Carolina
DecidedMarch 9, 1900
StatusPublished
Cited by1 cases

This text of 100 F. 278 (Mahoney v. Ward) 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
Mahoney v. Ward, 100 F. 278, 1900 U.S. Dist. LEXIS 394 (E.D.N.C. 1900).

Opinion

PUBNELL, District Judge.

This canse is now before the court on petition for discharge by Willis Ward, Willis Ward & Co., W. E. Cawthorn, W. E. Cawthorn & Co., and J. R. Jones, Jr., and upon an examination of the record the following astounding facts are found:

On the 2d day of February, 1899, a petition entitled as above was filed in the office of the clerk of the district court alleging that Willis Ward was indebted to petitioners, was insolvent, had committed acts of bankruptcy in that he, as a member of the firm of Ward, Jones & Co., joined in a general assignment to B. II. Bunn, Esq., assignee, December, 1898, conveyed certain valuable real estate, and on December 28, 1898, assigned liis interest in certain docketed judgments. A subpoena and rule on Bunn, as-signee, and Batchelor, grantee, to show cause why the conveyances to them should not be held void were issued on the same day, and returned as served on February 3, 1899. The petition is neither printed nor typewritten nor in the prescribed form, and, if attention had been called to these facts at the time, the same would have been dismissed ex mero motu. On February 11th,, Willis Ward was duly adjudged a bankrupt, and an order entered restraining 1!. H. Bunn, trustee, from disposing of property under assignment. This is also a written order, in which it is further found that W. •E. Cawthorn, who, with Willis Ward, constitutes the firm of W. E. Cawthorn & Co., and J. R. Jones, Jr., who, with "Willis Ward, constitutes the firm of Willis Ward & Co., are all declared bankrupts. There is another written order, which contains matter not supported by any petition, affidavit, or other paper writing, and evidently signed on the statement of the then clerk or counsel in the cause as an order by consent. This order is without petition, gives time to parties to file schedules, and to Batchelor to file an answer, and excuses him from personal attendance. On February 27th, — 16 days afterwards, — “schedules,” so called, were filed by Willis Ward,' J. R. Jones, Jr., Willis Ward & Co., W. E. Cawthorn & Co., and W. E. Cawthorn (all by the same attorneys, Bunn & Sherocl), and none disclose any assets other than those named in the [280]*280assignment and deeds referred to in tbe petition. Except attorney’s fees, these “schedules,” so called, disclose no indebtedness except the1 debts of Willis Ward & Co. and W. E. Cawthorn & Co., and petitions accompanying these so-called “schedules” are signed by the attorneys. On March 6, 1900, the referee to whom the cause was referred filed five petitions for final discharges, — one for each of the parties hereinbefore mentioned, — a defective certificate of conformity, and a recommendation that these discharges be granted. No record of any proceeding before the referee is filed; no evidence of notices to creditors or advertisement of such notices, except a statement in the defective certificate that the notice was published and mailed; no evidence of a meeting, except on February 24, 1900; no objection was made to the discharge, “no creditor being present”; or any other action on the part of the referee as required by section 39 of the bankrupt act.

With the increased volume of business in the courts of this district it is impossible to examine every pleading, order, and other process filed or presented for approval. Officers and attorneys must, of necessity, be depended on in a great measure, especially in bankruptcy proceedings, wherein it is of the first importance to their clients for attorneys, who are paid for their services, to see that all proceedings are regular, in strict accordance with the act of congress, for otherwise, even though he may run the gauntlet, and obtain a formal discharge, it may prove a mocking delusion. The courts of bankruptcy being always open, all adjudications, orders, and decrees remain in the breast of the court. Discharges may be attacked by parties in interest at any time within a year, and revoked. Section 15a. When an error is discovered, it is within the power of the court, and to the interest of all parties, to correct it as soon as discovered, at the earliest moment possible. There are but two methods by which a person can be declared a bankrupt; i. e. in a voluntary proceeding on his own petition, and on the petition of his creditors setting out acts or an act of bankruptcy as prescribed by the statute. In an involuntary proceeding an order by consent is not sufficient upon which to have other parties than the one against whom the petition is filed adjudged bankrupts, even though they be connected with the defendant against whom a petition is filed as partners, parties in interest, or otherwise. The mode of proceeding against partnerships is provided for in the statute, but this proceeding does not come within the provision, and was an involuntary proceeding against Willis Ward individually. The fact that he happened to be a partner with Jones in one firm and with Cawthorn in another would not necessarily draw into the proceeding the two commercial firms, or justify each member of such firms' to come into court, save themselves from complying with the law by paying cost, and being adjudged bankrupts even by a consent order. If these several parties desire to avail themselves of the benefits of the bankrupt law, they must file their individual petitions, make the deposits required, and proceed stricti juris. The petition, which is the basis of this proceeding, does not ask for an adjudication as to any one [281]*281except Willis Ward, or process as to any one’s property except that of Willis Ward, and it would be an anomalous construction of the law, and a hardship on the officers, whose fees are too small at best, which the court will not tolerate or permit,- to allow every one with whom he had any business relations — a whole neighborhood, if necessary — to come into court, even by consent of par-lies, avail themselves of the deposit made by the petitioning creditors, and in a clandestine way get a discharge from their debts. To have a partnership adjudged bankrupts, all the partners should he named in the petition. In re Prankard, Fed. Cas. No. 11,366; In re Krueger, Fed. Cas. No. 7,941. The consent order of February 11, 1899, in so far.as it applies to John R. Jones, Jr., Willis Ward & Co., W. E. Cawthom, W. E. Cawthorn & Co., is therefore revoked and abrogated, and all proceedings pursuant to that portion of the order annulled.

What effect a discharge of one partner would have on the partnership or partnership’s debts is not necessary at this time to discuss or decide, for, in the present condition of the proceeding, Willis Ward is not entitled to a discharge. The proceeding as to Willis Ward will be re-referred to the referee of the second division .of the district, with instructions to read, consider, and inwardly digest section 39, with other provisions of the bankrupt act relating to the duties of referees, and proceed accordingly.

Section 14a requires the judge to hear petitions for discharge. He alone can grant a discharge in bankruptcy. For the convenience of parties in distant parts -of the district, a general order of reference was adopted September 7,1898, being district rule 9, as follows:

Free access — add to your briefcase to read the full text and ask questions with AI

Related

In re Ellenbecker
205 F. 396 (E.D. Wisconsin, 1913)

Cite This Page — Counsel Stack

Bluebook (online)
100 F. 278, 1900 U.S. Dist. LEXIS 394, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mahoney-v-ward-nced-1900.