Crittenden v. Lines

Decision Date18 March 1964
Docket NumberNo. 18576.,18576.
Citation327 F.2d 537
PartiesHoward B. CRITTENDEN, Jr., Appellant, v. Kal W. LINES, Trustee in Bankruptcy of the Estate of Coy C. Goodrich, Bankrupt, Appellee.
CourtU.S. Court of Appeals — Ninth Circuit

Howard B. Crittenden, Jr., and Julian P. Beek, San Francisco, Cal., for appellant.

Glicksberg, Kushner & Goldberg and Lawrence Goldberg, San Francisco, Cal., for appellee.

Before HAMLEY, JERTBERG and MERRILL, Circuit Judges.

JERTBERG, Circuit Judge.

Appellant appeals from an order of the District Court confirming the order of the Referee in Bankruptcy in denying appellant's "Petition to Determine Title to Government Ordnance Contracts and to Real Property and Proceeds Thereof."

PRIOR HISTORY

On May 27, 1954, Coy C. Goodrich filed a petition in the district court pursuant to 11 U.S.C. § 722 for an arrangement under Chapter 11 of the Bankruptcy Act. The petition was filed in the name of "Goodrich Manufacturing Company, A Partnership Composed Of Coy C. Goodrich And Lulu Goodrich." In fact, no such partnership existed. Coy C. Goodrich was at all times the sole proprietor of the business known as Goodrich Manufacturing Company. Shortly after reference of the petition to a referee in bankruptcy, Coy C. Goodrich petitioned the district court to dismiss the proceedings on the grounds that the court lacked jurisdiction over his personal estate. Upon reference of the petition to dismiss, and after hearings thereon, the referee denied the petition. On November 15, 1955, the district court affirmed the referee's ruling and ordered that arrangement proceedings of the petitioner, Coy C. Goodrich, continue with or without amendment to the petition. Coy C. Goodrich appealed from this order to this court. While this appeal was pending, and on May 16, 1956, the referee adjudged "Goodrich Manufacturing Company, * * * copartnership" a bankrupt and directed that bankruptcy proceed. A contest for trustee developed and fathered further litigation, the story of which is told elsewhere.1

On July 27, 1956, the United States filed a creditor's claim in the bankruptcy proceedings. This claim arose out of two contracts between the Department of the Army and Coy C. Goodrich, as an individual doing business as Goodrich Manufacturing Co., for the manufacture of certain small arm tools which were entered into in 1952. By 1954, Goodrich being in financial distress, several of his creditors were threatening attachment proceedings and his subcontractors were refusing to continue performance under their contracts until they received payment for past work. On January 6, 1955, the United States terminated both of the contracts for the alleged default of Goodrich. Thereafter an appeal was taken from the finding of default to the Armed Services Board of Contract Appeals. While this appeal was pending, the United States petitioned for an adjudication of bankruptcy of "Goodrich Manufacturing Company, a partnership * * *" on the ground that the necessary creditor acceptances required to be filed in the Chapter 11 arrangement had not been filed within the time fixed by the referee for that purpose. On May 16, 1956, this petition was granted, as mentioned before. The order of adjudication was confirmed by the district court on December 3, 1956. An appeal from this order was taken to this court.

On February 11, 1958, the Armed Services Board of Contract Appeals ruled that the two contracts had been terminated for the convenience of the United States. On November 5, 1958, the appeals from the district court's orders of November 15, 1955, (affirming denial of the petition to dismiss Chapter 11 proceedings) and of December 3, 1956, (affirming adjudication of bankruptcy) were consolidated and decided in Goodrich v. England, 262 F.2d 298 (9th Cir.1958). In that case we noted that Coy C. Goodrich had intended to place his personal estate and debts before the lower court and we held that notwithstanding the misdenomination of the proceedings, Coy C. Goodrich in his individual capacity was at all times subject to the jurisdiction of the district court. We further held, 262 F.2d at 303:

"We cannot say that the referee abused his discretion in adjudicating appellant Coy C. Goodrich a bankrupt."

There being a dispute whether Goodrich's creditors desired dismissal of the proceedings in such posture, in light of the action taken by the Armed Services Board of Contract Appeals, we remanded for the purpose of determining whether dismissal would be in the best interests of his creditors. Upon remand the referee determined that dismissal was not in the best interests of Goodrich's creditors. The district court affirmed the referee's ruling. On appeal, this court affirmed in Goodrich v. Lines, 284 F.2d 874 (9th Cir. 1961), and further held that the remand ordered in Goodrich v. England, supra, did not have the effect of setting aside the adjudication of bankruptcy.

In 1959, the trustee disposed of much of the estate. On July 28, 1959, a large quantity of personal property consisting of machinery, tools and items of manufacture was sold to one Newburg. In September of 1959 the trustee joined with Coy C. Goodrich and Lulu O. Goodrich in a conveyance of the real property upon which the business was situated to Schlage Lock Company. The sale was confirmed and was pursuant to an agreement between the trustee and Schlage which was approved and authorized by the referee after a hearing thereon. Paragraph 9 of that agreement reads as follows:

"It is understood and agreed that the real property to be sold hereunder, stands, of record, in the names of Coy C. Goodrich and Lulu O. Goodrich, his wife, as joint tenants. Lulu O. Goodrich agrees to join with the trustee in conveying any and all right, title or interest she may have in said real property to Schlage. It is also understood and agreed that the purchase price * * * to be received by the trustee from Schlage for said real property shall belong to the trustee free and clear of any claim by Lulu O. Goodrich, as a joint tenant, or otherwise.
"It is understood and agreed that part of the consideration for the agreement by the trustee to sell, and by Schlage to purchase, said real property, is the promise herein of Lulu O. Goodrich to join with the trustee in conveying all of her interest in said real property to Schlage, and her promise herein to waive and release any rights she might have in and to the said proceeds of sale * * *."

In May of 1960 the trustee filed a claim against the United States in the court of claims for damages in the sum of $1,389,230.17 with respect to the two government contracts. The United States maintained there was nothing due the trustee and that its claim against the bankrupt's estate was meritorious. The United States also claimed a substantial amount of the proceeds from the sale of the personal property to Newburg on the basis of a claim of title to certain of that property. On April 24, 1961, the referee filed an order, after a hearing, authorizing the trustee to compromise with the United States all the claims between those parties. A compromise was effected whereby the United States paid the trustee $40,000.00 and all claims were withdrawn.

HISTORY PRELIMINARY TO PRESENT APPEAL

The caption in each and every pleading and paper filed in this matter has referred to the estate of "Goodrich Manufacturing Company, a partnership." In Goodrich v. England, supra, we noted that although the technical error could not prejudice Goodrich himself, such might be grounds for attack by one of his creditors. Howard J. Crittenden, appellant herein, has alleged that he is a creditor of Coy C. Goodrich and of Lulu O. Goodrich. Appellant's claim is based upon alleged services rendered as attorney for the Goodrichs between June 14, 1954, and September 10, 1959, having an alleged value (including costs and expenses) of $28,225.00.

On June 5, 1961, appellant filed a document entitled "Petition For Marshalling of Assets, Petition for Priority of Allowance Of Certain Debts And Attorney's Fees." In this document appellant alleged the following: his employment by Coy and Lulu Goodrich as individuals and by Goodrich Manufacturing Co., a partnership; that such partnership never existed in fact; that Crittenden rendered certain professional services by way of (1) attempting to dismiss the Chapter 11 proceedings on the ground that no partnership existed, (2) attempting to aid in the completion of the government contracts, and (3) attempting to obtain the Armed Services Board of Contract Appeals ruling; that Crittenden, at the request of Coy C. Goodrich had appeared before the Ninth Circuit Court of Appeals in the case of Goodrich v. England, supra, and argued that the only entity before the court was the partnership; that "it was solely because of and a result of the extensive work done by your petitioner Crittenden that this matter involving the entity before the Court was clarified, and only by this proceeding was the estate determined to be that of Coy C. Goodrich, an individual"; that notwithstanding that determination, and by virtue of the failure to correct the captions in the papers on file, the bankrupt in the instant proceedings was the partnership entity which had no creditors; that Crittenden, as creditor of the individuals Coy and Lulu Goodrich was entitled to a preference and a marshalling of assets; and that Crittenden was entitled to relief in conformity with the suggestion by this court in Goodrich v. England, supra, that the technical error might be grounds for attack by one of Coy C. Goodrich's creditors.

At the hearings on appellant's petition to marshal assets, etc., appellant advanced a number of theories upon which he felt relief could be predicated, including the following: That the Goodrich v. England decision did not hold that Coy C. Goodrich was the adjudicated bankrupt; that there were two bankrupt entities — a partnership...

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4 cases
  • Jarrow Formulas, Inc. v. Nutrition Now, Inc.
    • United States
    • U.S. Court of Appeals — Ninth Circuit
    • 4 Junio 2002
    ...(9th Cir.1974) (clear error), Carter-Wallace, Inc. v. Procter & Gamble Co., 434 F.2d 794, 803 (9th Cir.1970), and Crittenden v. Lines, 327 F.2d 537, 543 (9th Cir.1964). We disagree with Jackson's dicta that any of our cases have suggested that we review the district court's laches determina......
  • Herbert, In re
    • United States
    • U.S. Court of Appeals — Ninth Circuit
    • 16 Diciembre 1986
    ...the contracts were not ones 'which call for performance in futuro,' and were therefore not executory...." Crittenden v. Lines, 327 F.2d 537, 543 (9th Cir.1964). At the time the bankruptcy petition was filed on April 24, neither party owed future performance. 6 There is no allegation that AR......
  • In re Smith
    • United States
    • U.S. District Court — Northern District of Iowa
    • 25 Marzo 1966
    ...vested under Section 110 (a) (6) with rights of action arising from non-executory contracts which the bankrupt may possess. Crittenden v. Lines, 9 Cir., 327 F.2d 537. The exception to this rule applies when the profits of the contract can be divided between that earned prior to bankruptcy a......
  • Witty v. Louisville and Nashville Railroad Company
    • United States
    • U.S. Court of Appeals — Seventh Circuit
    • 2 Marzo 1965
    ...to establish an equitable estoppel. We see no error in the conclusion on this undisputed history of the dispute. Crittenden v. Lines, 327 F.2d 537, 543 (9th Cir. 1964); Boris v. Hamilton Mfg. Co., 253 F.2d 526, 528-529 (7th Cir. 1958). The district court made no mention of the facts stated ......

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