In re Branche

• Decision Date: 12 September 1921
• Docket Number: 9141.
• Citation: 275 F. 555
• Parties: In re BRANCHE.
• Court: U.S. District Court — Northern District of New York

275 F. 555

In re BRANCHE.

No. 9141.

United States District Court, N.D. New York.

September 12, 1921

Muhlfelder & Illch, of Albany, N.Y., for petitioning creditors.

Charles R. Watson, of Albany, N.Y. (George J. Hatt, 2d, of Albany N.Y., of counsel), for bankrupt.

COOPER District Judge.

The question to be decided here is whether or not Walter L Branche should be adjudicated a bankrupt. A petition in involuntary bankruptcy was filed against Walter L. Branche by Rosenthal Bros., Cigar Manufacturers, Inc., a creditor alleging that the bankrupt had less than 12 creditors. An answer was interposed, alleging that there were 18 creditors at the time of the filing of the petition, but not controverting any of the alleged acts of bankruptcy or disputing the petitioner's claim. Subsequently two other creditors filed intervening petitions, and as to the Autoelectric Company, one of them, it appeared that its debt had been paid prior to the filing of its petition. The sole question upon the original petition, then, is whether the creditors are less than 12 in number, within the meaning of the Bankruptcy Law.

Proof was taken as to the issues raised by the answer, and it appeared that the gross debts of the bankrupt amounted to $16,000. Of this amount there is due the petitioner $13,419 for merchandise, consisting of cigars sold. There are no real assets, and the bankrupt is hopelessly insolvent, having squandered his money at the race tracks. Two of the creditors are brothers, and are not to be counted, since they are within the third degree of consanguinity. Bankruptcy Law Sec. 59e (Comp. St. Sec. 9643). A third creditor is secured by a chattel mortgage, claimed to be fraudulent, and she may not petition. Section 59b. By stipulation the Albany Times Union, a creditor, was stricken from the answer, its debt having been paid. The total number of creditors are thereby reduced to 15, excluding the petitioner and Ellis Kellert, who was permitted to intervene.

Of the remainder, the St. Agnes Cemetery claim, for balance due on contract for purchase of a cemetery lot not yet deeded, is substantially a secured claim. Then there is the debt (for groceries) of Harder, who testified that all bills previous to a month before filing of the petition herein were paid, and all subsequent to that time paid, and that he expected the amount of his charge, $18.12, to be paid. Next, there is a debt due the Albany Yacht Club. It appeared that Branche paid his dues in advance up to the 1st of February (the petition was filed February 22d), and the only amount due was $1.65. There are two bills for medical services, either or both of which might have been contracted after the filing of the petition. Then there remain several small claims for rent, nurse's bill, storage charge, drug charge, and club dues. Some of these claims are of doubtful validity as subsequent debts, such as that of Bruce McDonald Company, Inc., where the dealings of the parties are inconsistent with the existence of a valid debt, and the same is true of the Perry claim for nursing. The garageman has a statutory lien on the automobile for his storage charge. Few seem to be debts unpaid in good faith.

Mere schemes and artifices to avoid the letter and the spirit of the law will not be tolerated. To treat the holders of such claims just enumerated as creditors, to be considered in determining the number in existence for the purpose of preventing an insolvent debtor...