In re Broadway Sav. Trust Co.

• Decision Date: 19 March 1907
• Docket Number: 78.
• Citation: 152 F. 152
• Parties: In re BROADWAY SAVINGS TRUST CO.
• Court: U.S. Court of Appeals — Eighth Circuit

152 F. 152

In re BROADWAY SAVINGS TRUST CO.

No. 78.

United States Court of Appeals, Eighth Circuit.

March 19, 1907

(Syllabus by the Court.)

Neither the allegation nor the fact that a corporation is engaged principally in manufacturing, trading, printing, publishing mining or, mercantile pursuits is jurisdictional in a proceeding in bankruptcy.

A creditor, who fails to appear or answer a petition in bankruptcy within the time limited therefor by the bankruptcy law, thereby waives all objections to subsequent amendments thereof which do not change the substance of the cause of action there stated nor the extent of the relief there sought, and renounces his right to contest the cause of action of which the original petition gives fair notice.

S. W Fordyce Jr., and Tyrrell Williams, for petitioner.

Stanley D. Pearce (Lee W. Grant, on the brief), for respondent.

Before SANBORN, HOOK, and ADAMS, Circuit Judges.

SANBORN Circuit Judge.

On July 27, 1906, three creditors filed a petition in the court below for the adjudication of the St. Louis Safe & Desk Company a bankrupt, but failed to allege that it was engaged principally in manufacturing, trading, printing, publishing mining, or mercantile pursuits. Bankr. Act July 1, 1898, c. 541, Sec. 4b, 30 Stat. 547 (U.S. Comp. St. 1901, p. 3423), as amended by act Feb. 5, 1903, c. 487, Sec. 3, 32 Stat. 797 (U.S. Comp. St. Supp. 1905, p. 683). On August 20, 1906, they filed an amended petition which remedied this defect, the desk company filed an answer which admitted the averments of the latter petition, and the desk company was adjudged a bankrupt. The last day for filing pleadings in response to the original petition was August 16, 1906, and on the next day the clerk made the formal order of reference of the petition to the referee, who took no action upon it. On August 23, 1906, the court adjourned and did not sit again until September 10, 1906, when the Broadway Savings Trust Company, a creditor of the desk company, which had not before appeared in the proceeding, filed a petition in the court below for the vacation of the adjudication and for leave to answer the amended petition, on the ground that the adjudication was made on the same day that the amended petition was filed, so that the Broadway Company and the other creditors of the desk company had no opportunity to appear and plead to it. On September 17, 1906, this petition was denied, and on October 1, 1906, the Broadway Company filed a petition to revise this order.

The original petition was demurrable and amendable. 1 Stat. 91, c. 20, Sec. 32 (U.S. Comp. St. 1901, p. 696, Sec. 954); In re Plymouth Cordage Co., 135 F. 1000, 1003, 68 C.C.A. 434, 437.

The contention of counsel for the petitioner that the omitted allegation, or the fact that the desk company was engaged principally in one of the pursuits which subjected it to the adjudication, was jurisdictional, has received deliberate and studious consideration, and our conclusion, the reasons for it, and authorities in support of it may be found in our opinion in Re First National Bank of Belle Fourche, which is filed herewith. ^[1] Our judgment is that neither the allegation nor the fact was jurisdictional, because neither conditioned the power of the court to hear the cause and decide every issue in it between the parties. It had the same jurisdiction of the cause and of the parties, and the same power to determine the issues between them, whether the desk company was or was not engaged in one of the pursuits mentioned in section 4b of the bankruptcy law. The only difference the decision of that issue made was that if it was so engaged the court should have given judgment for the petitioners, and if it was not so occupied it should have refused to adjudicate the desk company a bankrupt

The only remaining question is, was it error for the court below to adjudge the desk company a bankrupt upon the amended petition without notice to or time for creditors who had defaulted to appear or answer it? A proceeding in bankruptcy is a proceeding in equity, and the rules and practice in equity prevail in its conduct as far as they are consonant with the speedy administration of justice which it prescribes. Parties who have appeared in a suit in equity or in bankruptcy are entitled to a reasonable time to demur or answer an amended pleading of their adversary. Lockman v Lang, 132 F. 1, 6, 65 C.C.A. 621, 626; Files v. Brown, 124 F. 133, 142, 59 C.C.A. 403, 412; Nelson v. Eaton, 13 C.C.A. 523, 525, 66 F. 376, 378; Davis v. Davis, 62 Miss. 818; Fisher v. Simon, 14 C.C.A. 443, 67 F....