Brady v. Bernard & Kittinger

• Decision Date: 13 February 1909
• Docket Number: 1,855.
• Parties: BRADY et al. v. BERNARD & KITTINGER et al.
• Court: U.S. Court of Appeals — Sixth Circuit

170 F. 576

BRADY et al. v. BERNARD & KITTINGER et al.

No. 1,855.

United States Court of Appeals, Sixth Circuit.

February 13, 1909

Rehearing Denied May 15, 1909.

Norman Farrell, Jr., and S. A. Anderson, for appellants.

J. R Duffin and G. B. Likens, for appellees.

Before SEVERENS, Circuit Judge, and KNAPPEN and SANFORD, District judges.

SANFORD District Judge.

This is an appeal from the District Court for the Western district of Kentucky, sitting in bankruptcy. The appellees have moved the court to dismiss the appeal upon the ground that it was not taken in time.

The proceedings below, so far as now material, were as follows:

On December 25, 1907, Bernard & Kittinger and the other appellees filed in said District Court an involuntary petition in bankruptcy against the appellant, Philip Brady. On January 9, 1908, Brady filed a plea to the jurisdiction of the court, averring that he had never had his domicile residence, or place of business within said district; and on January 13, 1908, by leave of the court, filed an answer averring that he was a farmer chiefly, and therefore not subject to the bankruptcy act of July 1, 1898, c. 541, 30 Stat. 544 (U.S. Comp. St. 1901, p. 3418), and denying that he was insolvent or had committed any act of bankruptcy; to which answer replication was filed.

No further proceedings were had until April 17, 1908, when the attorney who represented the petitioning creditors in the court below presented to the court and filed in the cause a written instrument, dated March 5, 1908, signed by Brady, withdrawing from the record his plea to the jurisdiction and answer, admitting the allegations of the petition, and consenting that he might be adjudged a bankrupt; and on the same day, in pursuance of this instrument and at the instance of said attorney, an order was entered by the court reciting that, upon the motion of said Brady, his plea and answer were withdrawn, and that, the petition for adjudication having been thereupon heard and considered, the said Brady was declared and adjudicated a bankrupt, and the cause referred to the referee in bankruptcy.

On April 12, 1908, 11 days thereafter, the said Brady and the other appellants, claiming to be his creditors also, came and moved the court to set aside the order adjudging Brady a bankrupt, and tendered to the court their sworn petitions praying the same relief, alleging in substance that the aforesaid instrument signed by Brady, upon which the adjudication was based, had been signed and left with the said attorney for the petitioning creditors on condition that it was only to be used in the event Brady failed to comply with certain conditions of a proposed settlement; that Brady had fully complied with these conditions, but that the said attorney had refused to dismiss the case in accordance with the agreement; that Brady had thereupon notified said attorney that his consent to the adjudication in bankruptcy was withdrawn, and that he would resist any effort to have him adjudged a bankrupt upon the authority of the aforesaid instrument; and that thereafter, without notice to Brady, said attorney had wrongfully and without right presented said instrument to the court, and caused the aforesaid motion and order of adjudication to be entered.

At a subsequent hearing upon this motion, counter affidavits were filed by the original petitioning creditors, alleging in substance that the aforesaid written instrument had been deposited by Brady with their said attorney with the agreement that if Brady did not comply with the terms of the proposed settlement it was to be filed as the basis of an adjudication in bankruptcy; that Brady had failed to comply with these terms; and that their said attorney, after notifying Brady's attorney that he would promptly file said instrument, had filed the same in good faith, concealing nothing, and in accordance with the agreement.

The motion to set aside the adjudication having been taken under advisement, the court thereafter, of its own motion, entered an order allowing the parties to take proof on the question whether Brady's residence, domicile, or principal place of business had been within the district for the greater portion of the six months immediately preceding the filing of the petition in bankruptcy; and, proof having been taken on this question alone, the court, on June 9, 1908, entered an order reciting that, pursuant to a written opinion that day filed, the motion to set aside the adjudication of bankruptcy was overruled. In the written opinion thus referred to, no reference was made to the manner in which the order of adjudication had been obtained, or to the question whether the said attorney for the petitioning creditors had been authorized to use Brady's written consent as a basis for the adjudication, but the jurisdictional question raised by Brady's plea was alone considered, and, the court reaching the conclusion that it was fairly certain from the testimony that Brady's principal place of business had been within the district for the greater part of the six months preceding the filing of the petition, it was recited that the motion to set aside the order of adjudication 'is therefore overruled.'

On June 18, 1908, within 10 days thereafter, Brady and the creditors who had moved the court to set aside the adjudication were granted an appeal from 'the judgments made and entered in the foregoing causes on April 17, 1908, and on June 9, 1908.'

The appellees, after filing a brief on the merits, before the hearing in this court moved to dismiss the appeal on the ground that, not having been taken within 10 days from the judgment of April 17, 1908, adjudicating Brady a bankrupt, it was not in time.

1. In so far as the appeal was taken from the judgment of adjudication entered April 17, 1908, the motion to dismiss must be granted. Section 25a of the bankrupt act of July 1, 1898, c. 541, 30 Stat. 553 (U.S. Comp. St. 1901, p. 3432), provides that an appeal taken from a court of bankruptcy to the Circuit Court of Appeals from a judgment adjudging a defendant a bankrupt 'shall be taken within ten days after the judgment appealed from has been rendered. ' As no appeal was prayed or granted from the judgment of adjudication within 10 days after its rendition, the time for appealing therefrom expired at the end of the said 10 days, and could not be extended or revived by any subsequent proceeding in the case. Credit Company v. Arkansas Railway Company, 128 U.S. 258, 261, 9 Sup.Ct. 107, 32 L.Ed. 448; Conboy v. First Nat. Bank, 203 U.S. 141, 145, 27 Sup.Ct. 50, 51 L.Ed. 128; In re Alden Electric Company, 123 F. 415, 59 C.C.A. 509. As neither the motion nor the petitions to set aside said judgment were made or presented to the court until after the expiration of said 10 days, the case cannot, for that reason, if for no other, be brought, even by analogy, within the rule laid down by this court in the case of Mills v. Fisher & Co., 159 F. 897, 87 C.C.A. 77, 16 L.R.A. (N.S.) 656, that where a petition to rehear is filed within 10 days after the judgment the time for taking an appeal is thereby extended.

2. The same reasoning, however, does not apply to the appeal from the order or judgment refusing to set aside the adjudication of bankruptcy. The provisions of section 25a of the bankrupt act, allowing appeals to be taken to the Circuit Court of Appeals from judgments adjudging or refusing to...