Sheehan & Egan v. North Eastern Shoe Co.

• Citation: 47 F.2d 487
• Decision Date: 11 February 1931
• Docket Number: No. 2520.,2520.
• Parties: SHEEHAN & EGAN, Inc., et al. v. NORTH EASTERN SHOE CO.
• Court: United States Courts of Appeals. United States Court of Appeals (1st Circuit)

47 F.2d 487 (1931)

SHEEHAN & EGAN, Inc., et al. v. NORTH EASTERN SHOE CO.

No. 2520.

Circuit Court of Appeals, First Circuit.

February 11, 1931.

John M. Fogarty, of Lynn, Mass. (H. Ashley Bowen, of Lynn, Mass., on the brief), for appellants.

Walter M. Espovich, of Haverhill, Mass., for appellee.

Before BINGHAM, ANDERSON, and WILSON, Circuit Judges.

BINGHAM, Circuit Judge.

This is an appeal from a decree of the District Court for Maine dismissing an involuntary petition in bankruptcy. The ground assigned by the court was that it deemed "it for the best interest of creditors."

The involuntary petition was filed April 10, 1930, seeking to have the North Eastern Shoe Company, Inc., decreed a bankrupt. In the petition it was alleged that the respondent, for the greater portion of six months next preceding the date of the filing of the petition, had its place of business at Skowhegan in the county of Somerset and state and district of Maine, and had debts to the amount of $1,000; that the petitioners are creditors, having provable claims amounting in the aggregate, in excess of securities held by them, to the sum of $500; that the nature and amount of their claims were as follows: Sheehan & Egan, Inc., machinery and supplies, $395.50; Nicholas W. Mathey, machinery and supplies, $581.51; Julius Pamis, machinery and supplies, $632. In the petition it was also alleged that Julius Pamis of Haverhill, one of the petitioning creditors, did business under the firm name of the Haverhill Stitching Room Repair Company. It was also alleged that the respondent was insolvent, and that within four months next preceding the date of the petition had committed an act of bankruptcy, in that it had, on the 24th day of January, 1930, made a general assignment for the benefit of its creditors. The petition was signed by Sheehan & Egan, Inc., Nicholas W. Mathey, and Julius Pamis; and appended to it was an affidavit in which the petitioners made oath to the statements contained in the petition.

On April 29, 1930, the respondent filed an answer in which it only denied that it had committed the act of bankruptcy set forth in the petition or that it was insolvent.

On the same day (April 29, 1930) the respondent filed a petition to dismiss the involuntary petition, stating therein "that annexed hereto is a list of all its creditors with their respective addresses." This petition was signed by the North Eastern Shoe Company, by its treasurer, Clyde H. Smith; and appended thereto was a sworn affidavit of Clyde H. Smith "that the statement of facts contained in this petition are true and that the list of creditors annexed hereto is a true list of its creditors." In the list appears the name of the Haverhill Stitching Room Repair Company, 52 Wingate street, Haverhill, Mass., that being the name under which Julius Pamis did business as alleged in the involuntary petition.

May 1, 1930, the District Court entered an order that a trial would be had on the petition to adjudicate and a hearing be had upon the motion to dismiss on June 11, 1930, and that all the creditors named in the list should have at least ten days' notice thereof by mail. The notices were given.

On June 11, 1930, a hearing was had before the court on the answer and the motion to dismiss.

In the final decree, after reciting that the cause came on to be heard on the 11th of June, 1930, upon the answer and motion to dismiss the involuntary petition, it is stated that there were present at the hearing Mr. Egan, of the firm of Sheehan & Egan, Inc., and its attorney, Mr. Raymond Fellows; also Mr. Clyde Smith, president of the alleged bankrupt and his counsel, Mr. Walter M. Espovich. It is there also stated that almost all of the creditors (there being about 135 in all), except 2 who signed the involuntary petition and whose claims aggregate less than $1,000, had assented to an assignment for the benefit of creditors; that the third petitioning creditor, Julius Pamis, had ceased to be a creditor; that the court learned this fact by a conversation with Pamis over the telephone, in the presence of, and without objection by, counsel; and that said Pamis informed the court that he had no interest in the matter, and had been endeavoring to withdraw his name from the petition; that, in view of these facts and the fact that almost all of the creditors desired the estate to be settled under the assignment for the benefit of creditors, the court, deeming it for the best interest of the creditors, ordered the involuntary petition dismissed.

The record also contains a certificate of the evidence under equity rule 75 (28 USCA § 723). In this certificate it appears that, on January 24, 1930, the North Eastern Shoe Company...