Hill v. Western Elec. Co.

• Decision Date: 02 June 1914
• Docket Number: 2581.
• Citation: 214 F. 243
• Parties: HILL v. WESTERN ELECTRIC CO. et al. In re RANKIN.
• Court: U.S. Court of Appeals — Sixth Circuit

214 F. 243

HILL v. WESTERN ELECTRIC CO. et al.

In re RANKIN.

No. 2581.

United States Court of Appeals, Sixth Circuit.

June 2, 1914

A. T Hills, of Cleveland, Ohio, for appellant.

J. C Fisher, of Cleveland, for appellees.

Before WARRINGTON, KNAPPEN, and DENISON, Circuit Judges.

WARRINGTON Circuit Judge.

This is an appeal from an order adjudging E. H. Rankin a bankrupt. Section 25a, Bankruptcy Act; section 130, Judicial Code (Act March 3, 1911, c. 231, 36 Stat. 1134 (U.S. Comp. St. Supp. 1911, p. 194)). An involuntary proceeding was begun by petition of certain of his creditors alleging, among other things, that, within four months, Rankin had committed an act of bankruptcy by applying to the court of common pleas of Portage county, Ohio, 'for the appointment of a receiver for his property in behalf of creditors, being then insolvent. ' Rankin had been engaged in business at Hiram (in the county before mentioned), under the name of the Hiram Electric Company. The proceeding was resisted by appellant as receiver of the Elyria Gas Power Company, which was a creditor of the bankrupt. It was admitted in the answer of appellant that Rankin had applied for the appointment of a receiver of certain of his property in the action before referred to, wherein Rankin was plaintiff and the Hiram College and its board of trustees were defendants; and, while in effect admitting that a receiver had been appointed, it was denied in the answer (though not alleged in the petition) that the appointment was made on account of the insolvency of Rankin, and such insolvency was denied for want of knowledge. It was in substance alleged in the answer that the application for the receiver was made for the purpose only of preventing the college and the trustees, as vendors of certain property held by Rankin under a conditional sale contract, from wrongfully taking possession of the same with certain additional property under a claimed right to forfeit the contract. In the reply of the petitioning creditors, the right of appellant to oppose adjudication was denied on the ground that his company, the Elyria Gas Power Company claimed to be a secured creditor; but nothing is shown as to the extent of the alleged security. At the hearing Rankin's petition for such appointment of a receiver was offered in evidence, together with a stipulation, in which it was agreed: (1) That Rankin would, if permitted, testify that at the time he filed such petition he believed his assets to be worth $11,000 and his liabilities to be $10,000, and that his application for a receiver 'was not made with the purpose on his part of liquidating his assets and distributing them to creditors'; and (2) 'that, in fact, said Rankin was at the time insolvent, and his assets were worth not more than $7,500, and his liabilities were about $10,000.'

The bankrupt was not made a party to the proceedings taken on the appeal to this court, and the appellees have moved to dismiss for that reason. It is to be observed that this does not involve the objection made below, though not here, to the right of appellant, as a creditor, either to oppose the adjudication or to maintain the appeal. Since the date of the motion to dismiss, Rankin has voluntarily entered his appearance in the present proceeding, waiving notice of the appeal, and in terms submitted himself to the jurisdiction of the court 'in this matter as fully as though he had been duly and formally cited on the said appeal,' and has also waived 'time for filing of brief and other proceedings herein ' No objection has been made to this, and, on the contrary, counsel for the motion to dismiss have since confined their attention to the merits of the order of adjudication. The bankrupt has presented no objection to the action of the court below; and the issue is contested here only by the appellant and appellees as creditors of the bankrupt. In these circumstances we are disposed to treat the record as including the bankrupt at least as a party appellee. Richardson v. Green, 130 U.S. 104, 114, 115, 9 Sup.Ct. 443, 32 L.Ed. 872; Dayton v. Lash, 94 U.S. 112, 24 L.Ed. 33. He has been given ample opportunity to be heard on the appeal, and so the rule and the reason for requiring his presence (that is, that the successful party shall be at liberty to enforce the decree against parties who do not desire to have it reviewed, and the appellate tribunal shall not be required to decide the same question on the same record more than once) are practically satisfied (Masterson v. Herndon, 77 U.S. (10 Wall.) 416, 417, 19 L.Ed. 953; Davis v. Mercantile Trust Co., 152 U.S. 590, 593, 14 Sup.Ct. 693, 38 L.Ed. 563; In re Dandridge & Pugh, 209 F. 838, 126 C.C.A. 562 (C.C.A. 7th Cir.)), although the time within which Rankin might have appealed has long since expired. Questions like this are regulated by the rule governing appeals in equity in the courts of the United States. General Order in Bankruptcy, No. 36 (89 F. xiv, 32 C.C.A. xxxvi). The rule in equity, as well as the federal statutory policy, is liberal in allowing amendments respecting any defect in process or pleading. 1 Foster, Fed. Prac. (3d Ed.) Secs. 160, 161, et seq.; Browning v. Boswell, 209 F. 788, 791, 126 C.C.A. 512 (C.C.A. 4th Cir.). It is not suggested that the practice in this respect in equity or bankruptcy is less liberal than it is at law (Carey v. Donohue, 209 F....