In re Caledonia Coal Co.
| Decision Date | 01 October 1918 |
| Docket Number | 835. |
| Citation | 254 F. 742 |
| Parties | In re CALEDONIA COAL CO. |
| Court | U.S. District Court — Eastern District of Michigan |
Harry L. Stearns and E. L. Beach, both of Saginaw, Mich., for trustee.
George C. Ryan, of East Saginaw, Mich., for claimants.
This is a petition to review an order of the referee disallowing certain claims against the estate and denying priority to certain other claims.
The Caledonia Coal Company, the bankrupt, was a Michigan partnership association, organized under the statute governing such associations, being Act 191 of the Public Acts of 1877, as amended by Pub. Acts 1881, No. 216. It was engaged in the mining of coal on a co-operative plan. Under this plan each stockholder worked as a miner in the mines owned by the company, for which he received wages on a certain scale. The capital stock of the company consisted of 5,000 shares, of the par value of $10 each. After operating in Michigan for several years with varying degrees of success, the company was finally, in the latter part of May, 1916, compelled to file a voluntary petition in bankruptcy. Thereupon the claims involved in this proceeding were filed by over 70 of the stockholders, who claimed various sums as wages earned by them in working in the mines of the company. These claims were filed about a month after the adjudication in bankruptcy, and, upon their being filed were allowed as a matter of course; no objections to them having been presented. The administration of the bankrupt estate was then suspended for about a year, while an attempt was made to resume the operation of the company. After about a year, however, the trustee abandoned the attempt and proceeded with the administration of the estate.
In July, 1917, the trustee filed a petition asking that the claims of these stockholders be re-examined and expunged. He alleged two grounds for the rejection of such claims: First that the amounts claimed to be due as wages had been advanced by the claimants to the company out of their unpaid wages for the purpose of furthering the common enterprise in which they were engaged and from which they expected to reap a profit; and, second, that the claimants were indebted to the company, on account of unpaid subscriptions for their stock, for sums at least equal to the amounts claimed to be due them. A time was fixed for the hearing on this petition, and notice thereof was duly given to the claimants. Testimony was taken before the referee. The latter then entered an order disallowing a number of the claims, and holding that the balance of such claims should be allowed merely as general unsecured claims, without any priority. This petition is filed to review such order.
Certain questions raised concerning the practice followed by the trustee and referee may be first considered. Complaint is made that the petition for the re-examination of these claims was not seasonably filed, in view of the provisions of rule 32 of the Bankruptcy rules for this district. This rule provides that--
'Petition for re-examination of claims shall be filed within sixty days after the filing thereof, unless the time therefor shall be extended by the court upon cause shown and after such notice to the claimant of the hearing of the said application as the court may direct.'
As already stated, the petition of the trustee was filed about a year after the filing of the claims in question, and it does not appear that there has been any formal compliance with the rule just quoted. In view, however, of the fact that due notice was sent to all of the claimants of the hearing on such petition, and as one of the questions raised by claimants and argued by both parties here is whether the petition of the trustee can be filed after the lapse of the time mentioned, I am disposed to consider this petition as if it included an application for the extension of time contemplated by the rule referred to. No motion to dismiss the petition as improperly filed was made, and the merits of the case have been fully argued. Reasons for the delay have been explained by the attorney for the trustee and are now before the court, so that no good purpose would be served by insisting upon the presentation of a formal application for an extension of time. Treating the petition, then, as involving such an application, I am of the opinion that the delay of the trustee has been satisfactorily explained, and that sufficient cause has been shown for the necessary extension of time.
It is further urged that the trustee has been guilty of such laches in filing his petition as to bar his right to do so. Delay alone does not constitute laches; the essential element being prejudice to another person by reason of the delay complained of. It does not appear that the delay in this case has resulted in any injury or prejudice to the claimants which would now make it inequitable to allow the trustee to file his objections to these claims. Section 57k of the Bankruptcy Act (Act July 1, 1898, c. 541, 30 Stat. 560 (Comp. St. Sec. 9641)) provides that--
'Claims which have been allowed may be reconsidered for cause and reallowed or rejected in whole or in part, according to the equities of the case, before, but not after, the estate has been closed.'
Under the circumstances it cannot be held that the trustee has been guilty of laches. In re Globe Laundry (D.C.) 198 F. 365.
Complaint is made because copies of the petition to re-examine were not sent to the claimants, and also because all of these claimants were joined in one petition. No statute, rule, or authority is brought to the attention of the court in support of these objections, which seem clearly without merit. General Order 21 (89 F. x, 32 C.C.A. x), which governs the practice in such a case, provides in paragraph 6 as follows:
It will be noted that there is nothing in this rule...
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In re Rivera
...347-48 (6th Cir.1993) (citations omitted). The Debtor has not shown that any prejudice has resulted to the Debtor. In re Caledonia Coal Co., 254 F. 742, 745 (E.D.Mich. 1918) ("Delay alone does not constitute laches; the essential element being prejudice to another person by reason of the de......
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...even though not available as a technical set-off. Boatmen's Bank v. Laws, 257 F. 299. Kiskadden v. Steinle, 203 F. 375, 382. In re Caledonia Coal Co. 254 F. 742. On footing the amount due on the stockholder's liability on the stock owned by the bankrupt must be deducted as a condition of th......
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...re Burton Bros. Mfg. Co., D.C., 134 F. 157; In re Huntenberg, D.C., 153 F. 768; In re McGowin Lumber Co., D.C., 223 F. 553; In re Caledonia Coal Co., D.C., 254 F. 742; Stanley Works v. Gourland Typewriter Mfg. Co., D.C., 278 F. 995; In re Dunn, D.C., 181 F. 701; In re Unit Lock Co., D.C., 4......
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