168 F.Supp. 420 (N.D.Cal. 1958), 14388, In re Snow Camp Logging Co.
|Citation:||168 F.Supp. 420|
|Party Name:||In the Matter of SNOW CAMP LOGGING COMPANY, a copartnership composed of Clarence Vander Jack, Clarence C. Vander Jack, and Horace Mecklem, Jr., and Jeanne V. Mecklem, Clarence Vander Jack, Clarence C. Vander Jack and Horace Mecklem, Jr., and Jeanne V. Mecklem, individually, Bankrupts.|
|Case Date:||October 30, 1958|
|Court:||United States District Courts, 9th Circuit, Northern District of California|
Huber & Goodwin, Eureka, Cal., L.W. Wrixon, Charles M. Stark and Paul W. .mcComish, San Francisco, Cal., for petitioners S. A. Peters and Timber Inc. of California, a corporation.
Max H. Margolis, San Francisco, Cal., Frederick L. Hilger, Eureka, Cal., for trustee.
HALBERT, District Judge.
In this proceeding S. A. Peters and Timber Incorporated of California (hereinafter referred to as petitioners) seek the review of an order of the referee in bankruptcy (Bankruptcy Act, § 2, sub. a(10), 11 U.S.C.A. § 11, sub. a(10) arising out of the administration of the estate of Snow Camp Logging Company, a bankrupt partnership, which said order embodies a joint judgment against petitioners.
Petitioners entered these proceedings by filing proof of an unliquidated claim in which was alleged the breach of a contract for the supply of logs entered into between S. A. Peters (and subsequently assigned to Timber Incorporated of California) and the bankrupt. This was opposed by the trustee, who petitioned the referee for an order disallowing the claim (Bankruptcy Act, § 57, sub. d, 11 U.S.C.A. § 93, sub. d). In addition, the trustee sought affirmative relief alleging a breach of that same contract on
the part of petitioners. The referee issued an order directing petitioners to show cause why the trustee's request for affirmative relief should not be granted.
Before the date set for the hearing on the order to show cause, petitioners appeared specially to object to the jurisdiction of the bankruptcy court on the ground that there was then pending in the Superior Court of the State of California, in and for the County of Humboldt, an action entitled Snow Camp Logging Co., a corporation, plaintiff, v. S. A. Peters and Timber Incorporated of California, defendants, and that the subject matter of said action was the same as that embodied in the trustee's petition for affirmative relief. This objection was overruled by the referee.
Petitioners then filed a motion for permission to withdraw their claim, again alleging the pendency of the state action, and also alleging that the bankrupt had no interest in the contract as it had been assigned to Snow Camp Logging Company, a corporation, which was not bankrupt. This motion, too, was overruled. Petitioners then made their return to the order to show cause, together with a plea in abatement reiterating their former objections.
The matter came on regularly and was heard by the referee. After a notice of decision and the submission by both parties of suggested findings of fact and conclusions of law, an order, judgment and decree was issued by the referee in which it was ordered that the trustee of the estate of Snow Camp Logging Company, a partnership, have judgment; and that such judgment be entered in his favor and against S. A. Peters and Timber Incorporated of California, in the amount of $674,627.47.
In their petition for review, petitioners have taken wholesale objection to the factual findings of the referee, as well as his conclusions of law. As most of these objections were not pressed in petitioners' memoranda, they will not be considered in detail except insofar as they impinge upon the larger issues presented (Humphreys Gold Corp. v. Lewis, 9 Cir., 90 F.2d 896).
Petitioners first contend that the contract upon which their claim was founded, and upon which the judgment was based, was not an asset of the bankrupt's estate. This issue was first raised in petitioners' Motion for Withdrawal of claim. In that motion petitioners asserted that it was alleged in the complaint in the state action that Snow Camp Logging Company, a corporation, was the assignee of the contract. In their memoranda here petitioners also point to the trustee's statement (in his petition for an order disallowing the claim) that the contract had been assigned to the corporation without consideration and, therefore, was an asset of the partnership. There is nothing about these statements which required the referee to accept them as determinative of this issue.
A specific finding of the referee on this point (Referee's Findings of Fact No. 19 reads: 'That at the time of the filing of the petition in bankruptcy herein said bankrupts owned the rights and property in and to said writing, * * *') is attacked on the ground that there is not one scintilla of evidence, either oral or documentary, to support that determination. This attack is without foundation. The only record before this Court is the transcript of the proceedings had to determine which party breached the contract, and the extent of the damages. The issue of ownership was decided adversely to petitioners before that time. Lacking a coherent statement of facts by either party, it is impossible to determine the exact course of events which...
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