In re Heltman-Thompson Co., 1369.

• Decision Date: 04 February 1949
• Docket Number: No. 1369.,1369.
• Citation: 83 F. Supp. 156
• Parties: In re HELTMAN-THOMPSON CO.
• Court: U.S. District Court — Western District of Michigan

83 F. Supp. 156

In re HELTMAN-THOMPSON CO.

No. 1369.

United States District Court W. D. Michigan. N. D.

February 4, 1949.

Johnson & Johnson and Merrill N. Johnson, all of Manistique, Mich., for petitioning creditor Frank LeMaire.

Herbert & Wood and J. Joseph Herbert, all of Manistique, Mich., for debtor, Heltman-Thompson Co.

STARR, District Judge.

On November 26, 1948, Frank LeMaire, trustee for the assets of the Manistique Tool and Manufacturing Company of Manistique, Michigan, filed a creditor's petition praying that the Heltman-Thompson Company be adjudged a bankrupt. Paragraph 4 of the petition alleged in part:

That "within four months next preceding the filing of this petition, the said The Heltman-Thompson Company committed an act of bankruptcy, in that it did heretofore transfer, while insolvent, a portion of its property to one of its creditors with intent to prefer such creditor over its other creditors, and also it did heretofore convey, transfer, conceal and remove a part of its property with intent to hinder, delay and defraud its creditors, to-wit: it did, from August 1, 1948 to November 20, 1948, sell certain tools, machinery, dies and fixtures, including one Reliance 45 ton punch press, serial #201, one Rockford 37 ton punch press, serial #4633, one Bliss 32 ton punch press, serial #115639, one Bliss 32 ton punch press, serial #115637, and other presses, drills, lathes, and machine tools, to various parties, whose names and addresses are unknown to your petitioner, for cash, and not in the usual course of trade, which sales stripped said company of its operating equipment and rendered it unable to transact further business, and that some of the cash realized from said sales has been used to effect preferential payments to First National Bank at Manistique, a Michigan banking corporation, of Manistique, Michigan, one of the creditors of said company, and the balance of said cash has been transferred or concealed with intent to hinder, delay, and defraud your petitioner as a creditor."

On December 14th the Heltman-Thompson Company filed motion to dismiss this petition for the following reasons:

"(a) That said petition is not properly verified under oath as required by law.

"(b) That the form and substance of said petition is insufficient to invoke the jurisdiction of this court for the purposes prayed for therein.

"(c) That the averments in said petition contained fail to set forth jurisdictional requisites with the certainty, particularity and precision demanded by law.

"(d) That said petition lacks sufficient averments of specific facts and circumstances constituting a prima facie act of bankruptcy.

"(e) That the averments of preference, concealment, transfers, fraud and other essential elements of acts of bankruptcy are so vague, general and uncertain that the alleged bankrupt cannot ascertain therefrom the charges made against it and cannot properly and intelligently answer the same and cannot prepare to meet the same at the hearing thereof."

The Bankruptcy Act, 11 U.S.C.A. § 1 et seq., requires that the petition be verified. Order 38 of the General Orders in Bankruptcy, 11 U.S.C.A. following section 53 provides that "The several forms annexed to these general orders shall be observed and used, with such alterations as may be necessary to suit the circumstances of any particular case." The official form of verification to an involuntary petition, Form 5, 11 U.S.C.A. following section 53, provides for an oath by the petitioners "* * * that the statements contained in the foregoing petition, subscribed by them, are true."

The petition here in question is verified in the following form: "I, Frank LeMaire, the petitioner named in the foregoing petition, do hereby make solemn oath that the statements contained therein are true according to the best of my knowledge, information and belief." This verification on "information and belief" is not in the required form and is insufficient. In 2 Collier on Bankruptcy, 14th Ed., § 18.36, p. 80, it is stated: "The verification of an involuntary petition, however, must be unqualified and positive, and is insufficient if made on information and belief." See authorities cited.

However, under order 11 of the General Orders in Bankruptcy and Rule 15(a) of the Federal Rules of Civil Procedure, 28 U.S.C.A., an involuntary petition...