Hart v. Wiltsee, 2070.

• Decision Date: 25 January 1927
• Docket Number: No. 2070.,2070.
• Citation: 16 F.2d 838
• Parties: HART et al. v. WILTSEE et al. PARKER v. NEW ENGLAND OIL CORPORATION.
• Court: U.S. Court of Appeals — First Circuit

16 F.2d 838 (1926)

HART et al. v. WILTSEE et al.

PARKER v. NEW ENGLAND OIL CORPORATION.

No. 2070.

Circuit Court of Appeals, First Circuit.

December 31, 1926.

Rehearing Denied January 25, 1927.

Charles F. Choate, Jr., and Nathan Matthews, both of Boston, Mass., for appellants.

Sherman L. Whipple and Claude B. Cross, both of Boston, Mass., for Wiltsee et al.

Hugh W. Ogden, of Boston, Mass., for L. K. Morse.

George K. Gardner and Goodwin, Procter, Field & Hoar, all of Boston, Mass., for Lafayette Tuck.

Frederick N. Wier, of Lowell, Mass., for Middlesex Safe & Trust Co.

Lincoln Bryant, of Boston, Mass., for James M. Russell et al.

Romney Spring, of Boston, Mass., for Wm. O. Kimball et al.

Francis W. Sullivan, of Portland, Me., for Clarence A. Baker et al.

Frederick Foster, of Boston, Mass., for W. Joseph Tracy et al.

Arthur D. Hill, Hill, Barlow & Homans, Arthur C. Sullivan, and John H. Sherburne, all of Boston, Mass., for other respondents.

Before BINGHAM, JOHNSON, and MORRIS, Circuit Judges.

BINGHAM, Circuit Judge.

July 14, 1922, Henry S. Parker, a creditor of the New England Oil Corporation, brought a creditor's bill, seeking the appointment of receivers for the Oil Corporation in the District Court of Massachusetts. On July 22, 1922, the receivers were appointed. On January 8, 1923, the New England Oil Refining Company and Francis R. Hart, Daniel G. Wing, Alfred L. Aiken, Allan Forbes, Frank Finsthwait, and Thomas F. West, Jr., a committee representing the holders of notes of the New England Oil Corporation, of their own motion were made parties in the receivership proceeding. January 22, 1923, the noteholders' committee presented a plan for the reorganization of the Oil Corporation, which the court approved February 17, 1923. February 26, 1923, Ernest Wiltsee was allowed to intervene and file a late proof of claim, and on June 27, 1923, was adjudicated a creditor of the Oil Corporation in the sum of $176,000. Wiltsee's claim having been affirmed by the Circuit Court of Appeals (New England Oil Refining Co. v. Wiltsee, 3 F.2d 424), on May 8, 1924, he filed a petition asking information as to the reorganization effected by the noteholder's committee, and the manner of carrying it into effect. August 13, 1924, a decree was entered directing the committee to give the desired information. See (D. C.) 4 F. (2d) 392. April 27, 1925, the committee having previously on August 27, 1924, filed a report, a decree was entered requiring it to give further information. The committee filed a further report. Between April and August, 1925, hearings were had before the court on Wiltsee's petition for information and the reports of the committee, during which time the New England Oil Refining Company sought to appear in the proceedings, but was denied the right to do so. July 28, 1925, Wiltsee filed a petition in his own behalf, asking relief against the noteholder's committee for failure of duty and for damages, and on July 31, 1925, he presented another petition in behalf of himself, or in behalf of himself and other creditors who might become parties thereto, containing substantially the same allegations and asking for damages against the committee. On August 4, 1925, the District Court allowed the last petition to be filed nunc pro tunc as of May 8, 1924, the date of Wiltsee's original petition. October 7, 8, 1925, a decree was entered, in which it was found that the committee obtained the decree of February 17, 1923, through fraudulent representations, and were guilty of fraud in carrying out the reorganization, so far as it affected the rights of Wiltsee or any other creditors of the Oil Corporation to rescind the settlement of their claims, and ordered the receiver of the Oil Corporation to send notices of the decree to all former creditors, and that the Refining Company should pay the expenses incurred by the receiver in the proceedings pursuant to the order and stipulation of September 24, 1923. (This decree of October 7, 8, and the stipulation of September 24, 1923, are given and explained more at length in our opinion of November 16, 1925. In re New England Oil Refining Co., 9 F.2d 344). On December 14, 1925, a decree was entered amending the decree of October 7, 8, but only in so far as the decree of October 7, 8, fixed the time when the acts and things there required to be done should be performed. Shortly after April 28, 1924, the petitions of five more creditors were allowed, subject to objection of the committee, as being too late, etc., and on May 15, 1926, a final decree was entered awarding damages against the committee in the sum of $3,327,740.48. Included in this sum was $7,461.55, being expenses and compensation of receiver, which the Refining Company was ordered to pay pursuant to the stipulation of September 24, 1923. By this decree the claims of 336 creditors, who had been permitted to intervene, including those of the above-named 5, were allowed with interest.

July 1, 1926, Hart, Wing, Aiken, Forbes, Finsthwait, and West, Jr., the noteholder's committee, petitioned for leave to appeal from the interlocutory decrees of August 13, 1924, April 27, 1925, October 7, 8, 1925, December 14, 1925, and the final decree of May 15, 1926, filed their assignments of error, deposited $250 in lieu of bond for costs, and their appeal was allowed. July 7, 1926, citation on appeal was issued in behalf of said petitioners, citing in said Wiltsee and a large number of creditors, but not all of them. Thereafter the case was duly docketed in this court.

Wiltsee, in behalf of himself and other creditors cited as appellees, now moves to dismiss the appeal on the ground that the committee has failed to join as appellants parties who are indispensable to a proper appeal, that by the decrees appealed from the committee and the Refining Company are made jointly liable, and that the Refining Company should therefore have been joined as a party appellant, or summoned or severed in the court below, and, as neither of these things was done, the appeal must be dismissed for want of jurisdiction.

It also moves to dismiss the appeal on the ground that certain indispensable parties to a proper appeal have not been cited as appellees; that Mr. Garfield, the receiver, is an indispensable party appellee; that some 260 creditors, whose claims were allowed and embraced in the decree of May 15, 1926, are indispensable parties appellees, and have not been cited; that some 5 of these creditors, whose claims were allowed late, and which stand differently than the claims of other creditors who are made parties, have not been cited as appellees; that Henry S. Parker, complainant in the original suit, is a necessary appellee, and has not been cited; that the Tanker Syndicate, whose claim was disallowed, and the New England Oil Corporation, are likewise indispensable parties to a proper appeal, but whether as appellants or appellees the motion does not state.

The chief contention of the proponents of the motion is that by the decrees in question the Refining Company is made jointly liable with the committee to Wiltsee and the other creditors, and, being jointly liable and there having been no summons or severance, it is an indispensable party appellant; that, such being the case, this court is without jurisdiction to entertain the appeal, or to permit the Refining Company to voluntarily appear and be joined as a party appellant in this court.

We do not find it necessary to decide whether we would be authorized to permit such an amendment if the decrees appealed from imposed a joint liability upon the Refining Company and the committee, for we are of the opinion that the Refining Company is not made jointly liable with the committee in these decrees, and therefore is not an indispensable party appellant. While the Refining Company was made a party to the original receivership proceeding, it was not made or permitted to become a party to the proceeding instituted by Wiltsee. Its petition to become such party was denied. The provisions in the decrees relating to the committee, and upon which their liability is predicated, is their fraud or failure...