Armstrong v. Norris

• Decision Date: 12 November 1917
• Docket Number: 177.
• Parties: ARMSTRONG et al. v. NORRIS.
• Court: U.S. Court of Appeals — Eighth Circuit

247 F. 253

ARMSTRONG et al. v. NORRIS.

No. 177.

United States Court of Appeals, Eighth Circuit.

November 12, 1917

Edwin A. Krauthoff, William S. McClintock, and Arthur L. Quant, all of Kansas City, Mo., and O. M. Slaymaker, of Osceola, Iowa (Krauthoff, McClintock & Quant, of Kansas City, Mo., of counsel), for petitioners.

C. F Howell, C. H. Elgin, and Max M. Howell, all of Centerville Iowa, and A. M. Jackley, of Seymour, Iowa (Howell, Elgin &amp Howell, of Centerville, Iowa, of counsel), for respondent.

Before SANBORN and HOOK, Circuit Judges, and AMIDON, District Judge.

HOOK Circuit Judge.

This is a petition to revise an order of the District Court for the Southern District of Iowa in a bankruptcy proceeding. Two questions are involved; one of appellate practice, and the other of the scope and efficacy of a prior proceeding in Kansas and the right of Norris, the respondent, to maintain the present one in Iowa.

In July, 1913, partnership creditors instituted an involuntary proceeding in bankruptcy in the district of Kansas against Brown & Norris, a firm composed of I. T. Brown and C. G Norris. The petition averred that Brown and Norris individually were merchants, and were neither wage-earners nor persons engaged principally in farming or the tillage of the soil, but it did not in definite terms pray an adjudication against them as individuals. Brown and Norris filed an answer as individuals and as a partnership, admitting the ground of bankruptcy charged and submitting themselves to the jurisdiction of the court. On August 16, 1913, an order of adjudication was entered that:

'I. T. Brown and C. C. Norris, copartners trading under the firm name and style of Brown & Norris, is hereby declared and adjudged bankrupt accordingly.'

They filed schedules showing only firm creditors and debts. Dividends aggregating about 30 per cent. were paid on the claims of general creditors. August 13, 1914, Norris filed his verified application, reciting that he as a member of his firm had bee adjudged bankrupt, that he and his firm had surrendered all his and their property, etc., and praying for a discharge 'as an individual bankrupt and as a member of said bankrupt firm. ' This application was never brought to a hearing, and no other application for a discharge was made in the Kansas proceeding by the firm or a member. On December 7, 1915, Norris filed a voluntary petition in bankruptcy in the court below, Southern district of Iowa, and two days later was adjudged bankrupt. His schedules showed no assets, and only the firm creditors and debts disclosed in the Kansas proceeding. January 15, 1916, the petitioners here, who hold claims that were proved and allowed in the Kansas proceeding, moved the court below that its adjudication of December 9th be vacated, that the proceeding be dismissed, that Norris be enjoined from petitioning for a discharge, and for such other relief as might be equitable. April 24, 1916, the court denied petitioners' motion. It held in substance that Norris had not been individually adjudged bankrupt in Kansas, was therefore not entitled to a discharge there, and consequently his failure to procure one did not bar a subsequent individual proceeding in Iowa. May 19, 1916, the court in Kansas, at the instance of Norris, entered an order that his petition for a discharge there might be withdrawn without prejudice to his right to commence a new bankruptcy proceeding, or to continue one already begun. The petition to revise now before us is directed against the order of April 24, 1916, denying petitioners' motion to vacate, and for an injunction, etc.

It is urged by the respondent that a petition to revise does not lie, but that petitioners' sole remedy was an appeal from the order of adjudication of December 9, 1915, within 10 days thereafter, as provided by section 25a of the Bankruptcy Act (Comp. St. 1916, Sec. 9609). This is answered by Hart-Parr Co. v. Barkley, 146 C.C.A. 109, 231 F. 913.

Norris scheduled in Iowa no assets and no liabilities, except those involved in the Kansas proceeding. All the liabilities scheduled were the old partnership debts. Obviously his present and sole purpose is to obtain in Iowa what he did not secure in Kansas-- an individual discharge from his liability for the debts of his firm. The matter of discharge in bankruptcy is essentially a constituent of the proceeding in which the adjudication and the administration of the bankrupt estate are had. It cannot be...