In re Brett

• Decision Date: 27 June 1904
• Citation: 130 F. 981
• Parties: In re BRETT.
• Court: U.S. District Court — District of New Jersey

130 F. 981

In re BRETT.

United States District Court, D. New Jersey.

June 27, 1904

Edward F. Merry and Griggs & Harding, for demurrant Paterson Brewing & Malting Company.

Michael Dunn, for petitioning creditors.

LANNING District Judge.

Three creditors have filed a petition against John T. Brett to have him adjudged an involuntary bankrupt. Section 4b of the bankruptcy act provides that:

'Any natural person, except a wage-earner, or a person engaged chiefly in farming or the tillage of the soil, * * * owing debts to the amount of one thousand dollars, or over, may be adjudged an involuntary bankrupt. ' Act July 1 1898, c. 541, 30 Stat. 547 (U.S. Comp. St. 1901, p. 3423).

Section 59b (30 Stat. 561 (U.S. Comp. St. 1901, p. 3445)) requires that each of the creditors filing a petition must have a provable claim. The Paterson Brewing & Malting Company another of Brett's creditors, has demurred to the petition, and assigned as causes of demurrer, first, that there is no averment in the petition that Brett is not a wage earner or farmer; second, that it does not appear by the allegations in petitioning creditors, is a 'provable' claim; and, third, that no act of bankruptcy has been alleged. The third cause of demurrer was not pressed on the argument, and is understood to have been abandoned.

The demurrant insists that the first two causes of demurrer deal with jurisdictional defects in the petition, and that it is beyond the power of the court to permit an amendment of the petition which shall relate back to the time when the petition was filed. The purport of the argument is that the petition is so defective in form and substance that the court acquired by it no jurisdiction of the subject-matter of the proceedings, or of the person of the alleged bankrupt. But it is not the petition that confers upon the court jurisdiction of the subject-matter. That is done by the law. Jurisdiction of the person is acquired by filing a petition, and serving a copy of it, with a subpoena, upon the alleged bankrupt. The demurrant by its demurrer necessarily admits that the petition has been filed, and the record of the case shows that a copy of the petition and the subpoena have been served on the alleged bankrupt. The demurrant by its demurrer necessarily admits that the petition has been filed, and the record of the case shows that a copy of the petition and the subpoena have been served on the alleged bankrupt. The court therefore has jurisdiction both of the subject-matter and the person. The petition may be dismissed for grave defects but though defective, it may also, under the authority of general order 11 (32 C.C.A.XIV, 89 F. vii), be amended, provided the petitioners shall, in their application for leave to amend, state the cause of the error in the petition, and verify the amendment in the same manner as the original petition was required to be verified.

In the Williams Case, Fed. Cas. No. 17,700, it appears that on June 22, 1874, a petition in bankruptcy was filed against Williams and McPheeters, who were partners in business, and that on June 29th they were adjudged bankrupts. After the proceedings in bankruptcy were commenced, one Ellis brought suit in a state court against the bankrupts, and williams was arrested upon process issued in that suit.

Thereupon he applied to the bankruptcy court for an injunction restraining Ellis from prosecuting his suit. A rule to show cause being allowed, the bankruptcy court, on the return of the rule, stayed the action. The bankrupt law then in force required that the petition should be signed by at least one-fourth of the creditors, the aggregate of whose claims should amount to not less than one-third of the provable debts. The petition was defective, in that it did not conform to these requirements of the law. It was subsequently amended, however, with the consent of the court; and, on a review of the order by the circuit judge, it was held that the court had jurisdiction of the cause notwithstanding the defect in the petition, and that the amendment of the petition related back to the commencement of the bankruptcy proceedings and gave effect to the action of the court. Accordingly the order of the District Court staying Ellis' suit was sustained.

In Roche v. Fox, Fed. Cas. No. 11,974, a motion to dismiss a petition in bankruptcy was made for want of jurisdiction, because the petition was not signed and verified by a sufficient number of creditors, and for other reasons that need not now be mentioned. In the opinion on the motion the following language was used:

'It is claimed that the court has not jurisdiction. Jurisdiction of what? The law gives the court jurisdiction of the subject-matter before any petition is filed. And the filing of the petition, the service of process, and the appearance of the alleged bankrupt in the cause are ample to give jurisdiction of the person. What question of jurisdiction remains? In a certain sense, it is true, the court has not jurisdiction. It cannot proceed to furnish the relief prayed for upon a petition which is demurrable in not containing all the necessary allegations. And the

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