In re Big Pines Lime & Transportation Co.
In re BIG PINES LIME & TRANSPORTATION CO.
- Proceeding
- district
- Outcome
- writ denied — Exceptions sustained, and petition dismissed.
- Area
- other
- Panel
- Trippet (author)
Analysis
The court considered a petition for bankruptcy alleging that the debtor committed an act of bankruptcy by consenting to the appointment of a receiver and was insolvent. The court dismissed the petition, holding that consent to a receiver is not an 'application' under the Bankruptcy Act and that the evidence of insolvency was insufficient.
| What the court decided | The model |
|---|---|
Petition for bankruptcy dismissed“The exceptions to the report of the special master will be sustained, the petition dismissed, the master allowed $35 for reporter’s fees, and the special master allowed the sum of $200 for his services in this, behalf, all to be taxed against the petitioning creditors.” | agree with court The court correctly applied the statutory text of the Bankruptcy Act, which requires an 'application' for a receiver, not mere consent. Furthermore, the court correctly applied the rules of evidence to reject unsworn allegations in a third-party complaint as proof of insolvency. The dismissal follows logically from the failure to prove the statutory elements. |
The order itself: sound — The order is sound. It correctly interprets the statutory language 'applied' to exclude mere consent, distinguishing it from actual applications. It also correctly applies the hearsay rule to exclude unverified allegations from a prior complaint as evidence of insolvency. The reasoning is direct and supported by the record described.
Opinion — Trippet
TRIPPET, District Judge.
[1] This case requires an interpretation of subdivision 4, par. “a,” § 3, Bankruptcy Act July 1, 1898, c. 541, 30 Stat. 546 (Comp. St. § 9587). That provision provides that a person “being insolvent, applied for a receiver. * * * ” In this case the alleged bankrupt did not apply for a receiver. A suit was instituted against the bankrupt by one Rickershauser, in which the appointment of a receiver was prayed. Other creditors came in and then all parties stipulated that a receiver might be appointed. No receiver, however, was appointed. So the case cannot fall under the latter part of said subdivision 4.
The petitioning creditors desire the court to hold that the word “applied” means applied for or consented to the appointment of a receiver. The alleged bankrupt here did nothing in that case but consent to the'appointment of a receiver. If Congress meant that, if a person consented to the appointment of a receiver, it should be made an act of bankruptcy, it might easily have so stated. The cases relied upon by the creditors are cases wherein the application for a receiver was made on behalf of the bankrupt, or where the bankrupt actually petitioned for the appointment of a receiver.
[2] The proof in this cáse, however, fails to show that the alleged bankrupt was insolvent. The only evidence offered of insolvency was the allegations in the complaint in the case of Rickershauser against the alleged bankrupt. There was no stipulation in that casé that the allegations in the complaint were true. There was no answer confessing that they were time, and there was no finding of the court that they were true. They are, therefore, but the mere assertions of a third party, and are controlled by the rule concerning hearsay evidence.
The exceptions to the report of the special master will be sustained, the petition dismissed, the master allowed $35 for reporter’s fees, and the special master allowed the sum of $200 for his services in this, behalf, all to be taxed against the petitioning creditors.