Benitez v. Anciani

• Decision Date: 23 March 1942
• Docket Number: No. 3666.,3666.
• Citation: 127 F.2d 121
• Parties: BENITEZ et al. v. ANCIANI et al.
• Court: U.S. Court of Appeals — First Circuit

127 F.2d 121 (1942)

BENITEZ et al. v. ANCIANI et al.

No. 3666.

Circuit Court of Appeals, First Circuit.

March 23, 1942.

Francisco Capo Pagan, of Ponce, P. R., for appellant.

Kenneth B. Williams, of Boston, Mass., and Frank Torres, of Ponce, P. R., for appellees.

Before MAGRUDER, MAHONEY, and WOODBURY, Circuit Judges.

MAHONEY, Circuit Judge.

This case involves appeals from several orders of the district court sitting in bankruptcy.

Adela Rosaly Capo, Viuda de Seix, the debtor, on June 30, 1936, filed a petition in the district court for an extension of time in which to pay her debts under Section 74 of the Bankruptcy Act, 11 U.S.C.A. § 202. She later filed an amended petition and also an extension proposal. The proposal was confirmed on April 20, 1937, by an order of the referee which stated: "This court of bankruptcy retains jurisdiction in these proceedings exclusively for the purpose of determining any violation of the terms of the proposal." On June 30, 1940, Rosa Maria Anciani, a secured creditor, filed a petition alleging that the debtor had violated the terms of the proposal and had prolonged the proceedings for the purpose of delaying creditors. The petitioner prayed that the debtor be adjudged a bankrupt and her estate be liquidated. Action on the petition was postponed because the debtor was seriously ill. On August 13, 1940, the debtor died.

The creditors then filed an amended petition on October 11, 1940, which alleged that the debtor had died and that her only heirs were Julio Octavio Seix and Jaime Seix Irahola. The court was asked to adjudge the estate a bankrupt, order a liquidation and appoint "a trustee or other like officer". A copy of the amended petition was sent by the attorney for the creditors to Julio Octavio Seix. The amended petition was set down for hearing on October 18, 1940, and notice was sent to Fernando B. Fornaris as "Atty. for debtor's Estate." Fornaris asked the court to strike his name from the record since he was not attorney for the estate. This was granted by the court. While it does not appear that the attorney for the creditors sent notice of the hearing on the amended petition to Julio Octavio Seix, Seix sent a letter, dated October 11, 1940, to the district court acknowledging receipt of the amended petition and notice of the hearing, and objecting to jurisdiction and the holding of the hearing on October 18, 1940.

When the case came on for hearing on October 18, 1940, the court entered the following order: "The hearing is continued and the Court allows the surviving heirs to the said Estate two weeks to obtain services of an attorney to represent them." On this same day Seix filed a motion to revive asking that he and Jaime Seix Irahola be made parties to the proceeding and that notice of the hearing on the motion to revive be sent to Irahola. The creditors then filed a petition entitled: "Consent to Allow Debtor's Estate or Successors in Interest to Appeal and Defend, and Setting Date for Hearing". This petition stated:

"4th. That no service of said Petition for Bankruptcy Adjudication etc., the amended petition herein described, was made upon said Jaime Seix Irahola, mentioned in preceding paragraph 2nd. as one of the representatives of the debtor's estate."

* * * * *

"7th. That although Julio Octavio Seix has individually appeared as one of the debtor's heirs, the said Jaime Seix Irahola has not recorded his appearance.

"8th. That according to record information submitted by Julio Octavio Seix, in his `Motion to Revive' dated October 17, 1940, the said debtor's heir Jaime Seix Irahola, has his business address at number 420 Lexington Avenue, New York, N. Y., where he can be served with process from this Court."

The petition prayed that the amended petition and the motion to revive "be both set for a hearing not later than Friday, the 22nd day of November, 1940", and that notice of the hearing on the amended petition and the motion be sent to Seix and Irahola. On October 26, 1940, the court ordered that copies of the amended petition, the motion to revive, "the consent" and of the order itself be mailed to Seix and Irahola informing them that a hearing on these matters was to be held on November 22, 1940, "or as soon thereafter as they can be heard". A letter of the clerk of the district court to Seix reveals that the letter which was sent to Irahola "was returned as he was not found at said address".

Two days after the entry of the court's order, the creditors filed a petition in the district court praying that the debtor's heirs be restrained from settling without consent of the bankruptcy court a civil action which had been instituted by the debtor and was pending in the Insular District Court at Ponce, Puerto Rico. The attorney for the creditors sent a copy of this petition by mail to Seix, Irahola and Erasto J. Arjona Siaca as "Atty. for Debtor's Intestate." Siaca petitioned the court to strike his name from the record since he was "not the attorney for any such estate".

On November 22, 1940, the day set for the hearing, Seix filed a motion praying that the court vacate the order of October 26, 1940, and strike from the record the original petition, the amended petition, "the consent" and the application for the restraining order. He also asked that the motion to revive be dismissed without prejudice if the motion to strike were granted but that if the motion to strike were not granted the hearing be continued until the next term of the court. A court order filed on November 29, 1940, recited that at the hearing held on November 22, 1940, "None of the debtor's successors * * * appeared personally or by attorney. The then acting Judge, held that this court had acquired jurisdiction over the non-resident successor. * * *" It also stated that the amended petition and the application for restraining order "were adjourned to be continued for hearing and determination November 29, 1940." On November 29, 1940, the court "hereby sets the final hearing of said motions before this court for December 6, 1940 * * * or as soon thereafter as counsel can be heard". The following order was also entered: "The Court also temporarily restrains debtor's successor's from settling without the consent of this Court, civil suit number 626, pending before the Insular District Court for Ponce, Puerto Rico, as alleged in the moving papers, and to so notify the Secretary (Clerk) of that Court." It was also ordered that a copy of this order be mailed to Seix and Irahola.

On December 2, 1940, Seix filed a demand for a jury trial and on December 6, 1940, the day set for hearing on the amended petition and the application for the restraining order, filed a petition challenging the jurisdiction of the court on various grounds and asking dismissal of the motion to revive. If he lost on the jurisdictional grounds, he wanted time to file an answer and also to have his demand for a jury trial granted. The journal entry for December 6, 1940 says: "The application for compulsory bankruptcy and liquidation of estate, the motion to strike from record and the application for restraining order comes on to be heard. Frank Torres, Esq., appears in behalf of creditors. The Court hears said attorney and takes the matters under submission."

On December 26, 1940, Seix filed with the court a petition asking that the order of November 29, 1940, be vacated in its entirety, and on the same day filed a notice which recited that a letter had been sent to counsel for the creditors stating that a hearing would be held on the petition to vacate on December 27, 1940. The court, also on December 26, 1940, ordered that "the estate of Adela Rosaly Vda. de Seix be, and the same is hereby ordered liquidated in accordance with the Bankruptcy Act, and referred to Frank Bianchi, Referee in Bankruptcy". It also ordered that "Whereas on the 26th day of December, A. D. 1940, the estate of Adela Rosaly Vda. de Seix was adjudged a bankrupt. * * * That the application for a restraining order * * * be and the same is hereby referred to the said Referee for final determination". Two days later Seix and Irahola and creditors filed a notice of appeal from the order of November 29, 1940, temporarily restraining Seix and Irahola from settling the civil suit in the Insular District Court at Ponce, Puerto Rico, and from the order of December 26, 1940, under which "the estate of Adela Rosaly Vda. de Seix, was adjudged a bankrupt," "ordered liquidated," and the "application for a restraining order * * * referred to the * * * Referee for final determination."

On December 30, 1940, the referee entered an order appointing Enrique Armstrong a temporary receiver, and on February 8, 1941, a notice of appeal from this order of December 30, 1940 was filed.

On February 21, 1941, the appellants filed a petition to vacate the appointment of the temporary receiver, appearing "specially and exclusively for the object of filing this petition, without admitting the jurisdiction of this Court". The court denied this petition to vacate on February 28, 1941. The temporary receiver failed to qualify and on March 5, 1941, the referee appointed Miguel Mayol Arbona receiver and the district judge approved the appointment. On March 28, 1941 the appellants filed notice of appeal from the order denying the petition to vacate the appointment of the temporary receiver and also from the order appointing Mayol receiver.

Succinctly stated, the appellants have appealed from the following orders:

(1) the order temporarily restraining Seix and Irahola from settling the civil suit;

(2) the order adjudicating the estate a bankrupt and directing its liquidation;

(3) the order referring the restraining order to the referee for final determination;

(4) the order appointing Armstrong temporary receiver;

(5) the order denying the petition to vacate the appointment of the temporary receiver; and

(6) the order appointing Mayol receiver.

The first,...